Real Estate Investment Trusts (REITs). What is it?. Securitized real estate investment Ownership form created by IRS code. Requirements. Assets 75% of assets must be real estate, cash, and govt. securities other REIT shares are considered real estate assets
= NET INCOME (GAAP)
Net Income minus:
= Adjusted FFO (AFFO)
FFO Growth = Internal Growth + External Growth
Q: Are REITs real estate or stocks?
A: REIT returns lag real estate cap rates
REIT returns and unsecured real estate returns share a common component that reflects real estate fundamentals
REIT returns are noisy.