A broad measure of the performance of publicly traded U.S. real estate securities, such as Real Estate Investment Trusts (REITs) and Real Estate Operating Companies (REOCs). The index is capitalization-weighted. The beginning date, January 1, 1978, was selected because it coincides with the Russell/NCREIF Property Index start date. The Index is rebalanced monthly, and returns are calculated on a buy and hold basis.
- The company must be an equity owner and operator of commercial (or residential) real estate. Security types excluded from consideration for inclusion in the Wilshire Real Estate Indexes include: mortgage REITs, net-lease REITs, real estate finance companies, home builders, large landowners and sub-dividers, and hybrid REITs. Companies that have more than 25% of their assets in direct mortgage investments will not be included in the indexes.
- Healthcare REITs were excluded until September 14th, 2007.
- The company must have a minimum total market capitalization of at least $200 million at the time of its inclusion.
- At least 75% of the company's total revenue must be derived from the ownership and operation of real estate assets.
- The liquidity of the company's stock must be commensurate with that of other institutionally held real estate securities.
- The indexes are weighted by float-adjusted market capitalization.
Adjustments and Maintenance
- Routine additions and deletions to the index, as well as shares updates, are made after the close of trading on the third Friday of March, June September, and December. The changes become effective at the opening of trading on the next business day.
- During the quarter, a component company's shares outstanding will be adjusted whenever and at the same time a change in that company is made in the Wilshire 5000 Total Market Index.
- A company will be removed from the index if direct mortgage investments represent more than 25% of the company's assets for two consecutive quarters, or if the National Association of Real Estate Investment Trusts (NAREIT) reclassifies the company as a mortgage REIT.
- A REIT that elects to drop its REIT status and become taxed as a "C" corporation will be removed from the REIT index but will remain in the Real Estate Index if it continues to meet the qualifications for a real estate company.
- A company will be removed if less than 50% of its total revenue is generated from the ownership and operation of real estate assets for two consecutive quarters.
- A company will be removed from the index if its stock becomes illiquid, or has more than 10 nontrading days during the previous quarter.
- If an index component is delisted by its primary market due to failure to meet financial or regulatory requirements, it will be removed from the index.
- If a company's total market capitalization falls below $100 million and remains at that level for two consecutive quarters, it will be removed from the index.
- If an index component enters bankruptcy proceedings, it will be removed from the index and will remain ineligible for re-inclusion until it has emerged from bankruptcy. However, the Wilshire Index Oversight Committee may, following a review of the bankrupt company and the issues involved in the filing, decide to keep the company in the index.
- The Wilshire Index Oversight Committee may, at its discretion, remove a company it has determined to be in extreme financial distress from any Wilshire Index to which it belongs, if the committee deems the removal necessary to protect the integrity of the index and the interests of investors in products linked to that index.