EOP Becomes First REIT Added to S&P 500 Index

SAN FRANCISCO-Equity Office Properties this month became the first real estate investment trust included in the Standard & Poor 500 index.

In July, EOP closed the $7.3 billion merger of Spieker Properties, Inc. into Equity Office, creating a combined portfolio of 670 office building totaling 124.8 million sf of office space nationwide. EOP also acquired Spieker’s industrial and R&D portfolio of approximately 12.3 million sf. The deal gained the firm recognition as the Bay Area’s largest commercial building owner.

Equity Office Properties replaces Texaco in the index. Texaco was recently acquired by S&P 500 component Chevron. EOP became part of the S&P 500 index on Oct. 9 and has seen an increase of more than 50% in its trading volume since.

For many years, REITs were not eligible for the Standard & Poor indices because the old policy reflected REITs as passive investment vehicles. However, a more recent review revealed that the majority of REITs are now operating companies that purchase, manage, invest in and market real estate. Still, S&P indices may not include REITs that are principally passive investment companies and do not actively manage and operate real estate properties.