REIT Valuation

In REIT valuation, while calculating the NAVPS, we do certain adjustments to current yeat NOI like deducting non cash rent. However, why do we take the impact of full year acquisition? In this way, are we not overstating this year’s NOI?

Are you referring to a specific question? I believe that the impact of the full year acquistion is done when the property has been acquired in the middle of the year.

Yes, but why do we have to do that? Say, I acquired the property in June and I got the rent till Dec, of a $100. But when calculating the NAVPS, I will add another $100 to account for the full year impact, right? Why is this done?

Lets say you have to calculate next year’s NoI, if u do not adjust NOI to reflect full year earning potential, u will be understating next year’s NOI. Imp to note tht u calculate NAVPS based on next year’s NoI and not last 12 months NoI

Ok, got that…Thanks a lot :slight_smile: