Standard & Poor's has announced that Boston Properties (NYSE:BXP) and Kimco Realty (NYSE:KIM) are being added to the S&P 500 index to replace Cinergy (NYSE:CIN) and Jefferson-Pilot (NYSE:JP), which are being acquired. Boston Properties is set to join the index this Friday and Kimco next Monday.

With their addition to the S&P 500, Boston Properties and Kimco join nine other real estate investment trusts, or REITS, in the S&P 500, including Equity Office Properties (NYSE:EOP), Simon Properties Group (NYSE:SPG), and VornadoRealty Trust (NYSE:VNO).

There are a few things that we can take away from the addition of two more REITs to the S&P 500, but the most important item is that REITs continue to become more accepted as mainstream investments. Arguments can ensue as to whether REITs are good values now, but the National Association of Real Estate Investment Trusts has data from Ibbottson Associates showing that a stock portfolio with a 10%-20% allocation to REITs outperformed an S&P 500-only stock portfolio from 1972 to 2004 and did so with less risk. For this reason, REITs deserve consideration in most portfolios.

I'm glad to see that two of the REITs that I think are among the best-run in the industry are being added to the S&P 500. However, I'm a bit disappointed, because I had been eyeing Kimco for a possible spot in my own portfolio. The 10% run-up in price over the last couple of weeks and now an additional 7% increase with last night's announcement by the S&P have taken the shares outside where I feel comfortable starting a position. Still, these are two well-run companies, and for investors considering REITs, both belong on a watch list.

For more REIT-related Foolishness:

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Nathan Parmelee has no financial interest in any of the other companies mentioned. The Motley Fool has a disclosure policy.