REIT valuation教程

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1、REITvaluationRealestatecapitalmarkets(RE740)(a)BasicsBasicsRealEstateInvestmentTrusts1.buy,sellandholdrealestateassetsonbehalfofadiffuseshareholderbase2.managetheseandotherassets3.arenottaxedatthecorporatelevelThreebasictypes:equity,mortgage,hybridCanbepublicorprivateUP

2、REITs(Ufor“umbrella”)holdpositionsincorporationsthatinvestinrealestate,includingotherREITsBriefhistoryREITact,1960:REITsmaybetreatedasuntaxed,pass-throughentitiesprovidedtheysatisfyanumberofrequirementsCurrentrequirementsinclude:1.75%ofholdingsinRE,cash,orUSpaper2.75%ofin

3、comemustcomefromrents,dividends,mortgageinterest,gainsfromthesaleofqualifyingassetsorholdingsinotherREITs3.90%oftaxableincomemustbedistributedtoshareholders*4.Atleast100shareholders5.Top5holderscannotholdmorethan50%ofshares1986taxreformremovedtwobigdownsidesofREITstructure

4、:1.Managementactivitieswereseverelyrestricted2.Otherformsofincorporations(LPs,especially)enjoyedpreferentialdepreciationrules1991KimcoRealtyIPOusheredinaneweraforREITsMarketcapitalizationofPublicREITsHistorical12-monthreturns(e-REITs)(a)FinancialmetricsStandardratiosREITs

5、preparethesameaccountingstatementsasallcorporationshencestandardfinancialmanagementprinciplesapplyAsusual,aquicksnapshotoffinancialsituationshouldcenteron:1.Profitabilityandmarketratios(EPS,ROIC,operatingmargin…)2.SG&A/Revenues(!!!!!=thecostofoperatingasaREIT)3.Leveragerat

6、ios(D/E,DCR…)4.PayoutratiosanddividendyieldsPrinciplesofvaluationFirmvalue=ValueofOperatingAssets+ValueofNon-OperatingAssetsREITValue=ValueofRevenueGeneratingProperties+ValueofManagementServices+ValueofLandandPropertiesunderdevelopment+Valueofotheridleassets(cash,e.g.)Val

7、uingoperatingassets(alaMcKinsey)ValueofOperatingAssets=PVofFCFFatWACCReturnonInvestedCapital(ROIC)=(NOI*–Depreciation)/(InvestedCapital)=Netoperatingprofits/ICNetInvestment(NI)=NOPxInvestmentRate=GrossInvestment–Depreciation=AdditiontoICNote:FCFF=NOP–NINote:analysisusu

8、allyusesNOPATratherthanNOP,butT=0forREITs,exceptforoperatingtaxesalreadyincludedin