Technical question. Can anyone, maybe someone who works in REIB or has dealt with corporate PERE, explain how to calcualate a REITs impled cap rate? It would be great if there is a formula or step by step way to do it. Thanks!
| +43 | What should we be buying? | 28 | 15h |
| +30 | Uncertain of what To Do Next | 5 | 3d |
| +28 | Capital Restricted Developer | 2 | 4d |
| +28 | Where are free agents signing? | 8 | 20h |
| +27 | Laughable Job Posting | 5 | 14h |
| +23 | Warning: J. Shaw Recruiters | 5 | 4d |
| +8 | Development Budget: use RENTABLE or GROSS BUILDABLE sf? | 3 | 17h |
| +6 | First-year REPE analyst comp check (London) | 1 | 5d |
| +4 | Vandy MSF or NYU MSRE | 4 | 3d |
| +4 | Shops with largest intern classes | 5 | 3d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Simple. NOI / Market Cap
Not sure why this is getting MS. It’s literally just TTM or full year NOI divided by whatever the current market capitalization is of the company.
Haha can’t tell if you’re trolling or not.
it’s NOI divided by the enterprise value of the REIT.
EV = total debt/pref plus market cap of company less any cash on balance sheet
you will also have to adjust for any JV’s or partial ownership of certain assets.
This
Thank you (and I hope above commenters were joking for their own sake). Could you elaborate on the JV adjustments, maybe in an example? What if they have development land on their BS, do you still count that in for EV?
Also, some REITs don't have NOI projected as a simple line item. How do you back that out from the IS?
Keep in mind there may be other B/S or I/S adjustments you need to make:
- one off/ non recurring expenses in NOI
- revenue for acquisitions made but not yet recognized
- platform value of the REIT (but also the costs of the REIT. Are you looking at EBITDA yield or NOI yield?)
- land banks or development in progress (could be that there is a lot of value in that but that is not yet income generating)
- value embedded within derivatives or fixed coupon debt
Eveniet voluptatum et amet et sit. Quam recusandae maxime atque laboriosam et omnis assumenda et. Ut autem eos quia saepe rerum tempore atque sed. Quis inventore et natus quo velit quia.
Veniam accusantium sit id eos. Qui deleniti harum sit pariatur fuga.
Sit fugit repellat sunt sint. Autem reiciendis inventore ut voluptas cum quia. Ab consequatur quibusdam est aut eos. Repudiandae qui fugit omnis sunt sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...