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Seven money managers examine portfolio management strategies in the latest issue of The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info505.htm

TWST: Could you briefly tell us about Delaware Investments and your responsibilities there?

Mr. Andres: Delaware Investments is a global investment management firm. We manage money in equity, fixed income and international asset classes. Within each asset class we have multiple products, so we’re represented in all areas of the investment spectrum. Total assets are about 80 billion under management. One of the sleeves we have in that investment spectrum is the real estate equities asset class. My responsibilities at Delaware are in real estate equities. Delaware has about 300 million in a dedicated REIT product where I am a Co-Portfolio Manager and Analyst.

TWST: What’s the REIT market been like over this very difficult year?

Mr. Andres: 2001 closes the second year of very strong relative performance for the REITs. The REIT asset class was up around 11% for the year, and the year before that it was about 26%. That makes two years in a row now REITs have posted strong performance relative to the other major market indexes such as the NASDAQ, the Russell 2000, and the S&P 500. As a result, REITs and real estate have really caught investors’ interest, both institutionally and from the retail side. The main reason for the good performance in 2000 and 2001 was their stability of income generation and visibility of earnings. Yes, there have been downward revisions to REIT earnings, but there haven’t been major shocks, just modest and controlled changes. In addition, REITs offer high current yields, growth of dividends, and asset diversification. In light of two very tumultuous years in the stock market and the overall economic climate, REITs really shined.

TWST: What makes REITs such a good investment compared with growth stocks?

Mr. Andres: There are a few virtues that make REITs attractive. First is high current income. REITs by law have to pay out 90% of taxable income. This income goes directly back to the shareholder in the form of dividends. Currently, that translates into about a 7% dividend yield for the industry. So, assuming no price change, you’re getting a 7% return right off the bat. Another benefit of investing in REITs is predictability. Most of a REIT’s income is generated through contractual leases. For instance, an office building, on average, might have a weighted average lease of seven years. If one is comfortable with the credit worthiness of these leases, the predictability of cash flow generation over the next few years is very high. This predictability of cash flow generation is a very attractive characteristic, especially when the economy is softening or corporate earnings are volatile. Finally, there is the diversification and low volatility argument. Real estate is a separate asset class and REITs in general track real estate fundamentals. Ultimately, what this means is by adding REITs to a portfolio, either institutional or individual, volatility significantly decreases and long-term total return expectations remain the same. In other words, the amount of money one can make over the long term stays the same, while limiting the amount of money one might lose in any given year.

TWST: Let’s talk about specific REIT investments. What are your largest holdings? What are the reasons for them?

Mr. Andres: The largest holding is Equity Office Properties (NYSE:EOP). Another large holding we have is Vornado Realty (NYSE:VNO). This is a company we feel is very opportunistic. It has a lot of room for upside in some of their current ventures in New York City. It has an opportunistic management team with a track record of doing value-added transactions. So we have a lot of confidence there.

This special Investing Strategies Report includes:

1) Investing in REITS - William K. Morrill, Jr. and Keith R. Pauley, both Managing Directors at LaSalle Investment Management, examine portfolio management strategies in this timely and deeply informative 6,800-word interview from The Wall Street Transcript.

2) Investing in REITS - Damon J. Andres, Vice President at Delaware Investments, examines portfolio management strategies in this timely and deeply informative 2,800-word interview from The Wall Street Transcript.

3) Investing in REITS - Kenneth T. Rosen, Chief Executive Officer and Michael A. Torres, President, both respectively at Lend Lease Rosen Real Estate Securities, examine portfolio management strategies in this timely and deeply informative 4,600-word interview from The Wall Street Transcript.

4) Kyle Prechtl Legg, President at Legg Mason Capital Management, examines portfolio management strategies in this timely and deeply informative 3,900-word interview from The Wall Street Transcript.

5) Richard D. Steinberg, President at Steinberg Global Asset Management, Ltd., examines portfolio management strategies in this timely and deeply informative 3,900-word interview from The Wall Street Transcript.