Learning Outcome Statements

1. Overview

a. describe types of publicly traded real estate securities;

b. explain advantages and disadvantages of investing in real estate through publicly traded securities;

c. explain economic value determinants, investment characteristics, principal risks, and due diligence considerations for real estate investment trust (REIT) shares;

d. describe types of REITs;

2. Net asset value approach

e. justify the use of net asset value per share (NAVPS) in REIT valuation and estimate NAVPS based on forecasted cash net operating income;

3. Relative value (price multiple) approach

f. describe the use of funds from operations (FFO) and adjusted funds from operations (AFFO) in REIT valuation;

g. compare the net asset value, relative value (price-to-FFO and price-to-AFFO), and discounted cash flow approaches to REIT valuation;

h. calculate the value of a REIT share using net asset value, price-to-FFO and price-to-AFFO, and discounted cash flow approaches.

4. Discount cash flow approach

f. describe the use of funds from operations (FFO) and adjusted funds from operations (AFFO) in REIT valuation;

g. compare the net asset value, relative value (price-to-FFO and price-to-AFFO), and discounted cash flow approaches to REIT valuation;

h. calculate the value of a REIT share using net asset value, price-to-FFO and price-to-AFFO, and discounted cash flow approaches.