REITs Added to S&P 500

Standard & Poors, New York, said it is adding a pair of REITs to its S&P 500 index, replacing companies in other sectors that are being acquired.Boston Properties Inc., will join the index after the close of trading on March 31. It is replacing energy firm Cinergy Corp. Kimco Realty Corp., will join the index after the close of trading on April 3. It will replace insurance holding company Jefferson-Pilot Corp. Both Boston Properties and Kimco are in the S&P REIT Composite index. Boston Properties is a Boston-based office real estate investment trust and Kimco Realty is a New Hyde Park, N.Y.-based retail REIT. The J.P. Morgan equity REIT research group estimates that this development is going to generate about $1.7 billion of demand from index funds for the stocks of these REITs (since the equity holdings of index funds modeled on the S&P 500 will have to reflect the makeup of this index). Kimco will have about a 0.07% weighting in the index, and index fund demand for Kimco stock should be over $800 million, according to J.P. Morgan. And Boston Properties should have about a 0.1% weighting in the S&P 500, making for about $900 million of demand. Both Kimco and Boston will be added to the REIT sub-industry component of the S&P 500, S&P reports. With these additions, 11 REITs are on the S&P 500, comprising about 1% of the index, according to J.P. Morgan. S&P's website is http://www.standardandpoors.com.