Lesson 1Property-level due diligence inputs: rents, expense ratios, lease expirations, tenant concentration, and geographic diversificationThis section focuses on property-level underwriting inputs that feed REIT valuation. You will analyze rents, operating expenses, lease expiries, tenant mix, and geographic spread to assess cash flow durability and concentration risks.
Market rents, in-place rents, and mark-to-marketOperating expense ratios and recoveriesLease rollover schedules and downtimeTenant credit quality and concentration riskGeographic and asset-class diversificationLesson 2NAV and asset-based valuation: estimating property-level values, cap rates, and discounting residual land/value adjustmentsThis section develops NAV and asset-based valuation for REITs. You will estimate property values using NOI and cap rates, adjust for development and land, and reconcile gross asset value to equity NAV per share with appropriate discounts.
Property-level NOI and market cap rate selectionStabilized versus in-place income assumptionsValuing development, land, and air rightsReconciling GAV to equity NAV per shareNAV premiums, discounts, and catalystsLesson 3Valuation adjustments for taxes, preferred equity, minority interests, and non-core assetsHere we refine equity value by incorporating structural adjustments. You will learn to treat taxes, preferred equity, minority interests, and non-core assets so that enterprise value and NAV properly reflect common shareholder claims.
Adjusting for deferred and contingent tax liabilitiesValuing and subtracting preferred equity claimsAccounting for noncontrolling interests in NAVTreatment of non-core and held-for-sale assetsBridging enterprise value to equity per shareLesson 4Income-based approaches: dividend discount models for REITs and cash flow available for distributionYou will apply income-based valuation tailored to REITs. The section covers dividend discount and cash flow models, forecasting cash available for distribution, and aligning payout, reinvestment, and leverage assumptions with growth and risk.
Dividend discount models for REIT equitiesModeling cash available for distributionPayout ratios, retention, and growth linksTerminal value and cost of equity estimationComparing DDM and discounted cash flow outputsLesson 5Macro and sector drivers: interest rate sensitivity, cap rate compression/expansion, occupancy, rental growth, and lease structuresHere we link REIT performance to macro and sector forces. You will study interest rate sensitivity, cap rate moves, occupancy and rent trends, and how lease structures shift risk between landlords, tenants, and lenders across property types.
Interest rate channels and REIT pricingCap rate compression and expansion dynamicsOccupancy, rent growth, and NOI resilienceLease term, indexation, and escalation clausesSector-specific demand and supply conditionsLesson 6Stress testing REIT valuations: recession scenarios, rising rates, and liquidity constraintsYou will learn to stress test REIT valuations under adverse conditions. We build recession, rate shock, and liquidity squeeze scenarios, modelling impacts on NOI, cap rates, funding access, and equity value to gauge downside risk and resilience.
Designing macro and property stress scenariosModeling NOI declines and higher cap ratesRefinancing risk and liquidity crunch analysisCovenant breach and dilution risk assessmentInterpreting stress test outputs for investorsLesson 7Funds from operations (FFO) and adjusted FFO (AFFO): calculation, normalization, and limitationsThis section defines FFO and AFFO, shows how to calculate and normalize them, and highlights adjustments for recurring versus nonrecurring items. It also examines key limitations when using FFO and AFFO as valuation and payout metrics.
GAAP net income to FFO reconciliation stepsCommon FFO and AFFO adjustment categoriesNormalizing one-time and nonrecurring itemsAFFO as a proxy for sustainable cash flowsPitfalls of using FFO and AFFO in valuationLesson 8Relative valuation for REITs: FFO multiples, AFFO multiples, and peer/sector benchmarkingThis section covers relative valuation tools tailored to REITs. You will apply FFO and AFFO multiples, compare issuers within sectors, adjust for growth and risk, and interpret valuation spreads versus peers, indices, and private market metrics.
Selecting peer groups and sector benchmarksFFO and AFFO multiple constructionGrowth, risk, and quality multiple adjustmentsPremium and discount analysis versus peersLinking public multiples to private market dataLesson 9Balance sheet and financing: leverage metrics (debt/EBITDA, loan-to-value), covenant analysis, and maturity schedule implicationsThis section analyzes REIT balance sheets and financing choices. You will interpret leverage ratios, loan-to-value, and debt service metrics, review covenant packages, and assess how maturity ladders and refinancing risk affect equity valuation.
Debt/EBITDA, LTV, and fixed-charge coverageSecured versus unsecured debt structuresKey financial and operational covenantsDebt maturity ladders and refinancing cliffsHedging interest rate and currency exposuresLesson 10REIT fundamentals: REIT structure, tax rules, distribution requirements, and types of equity REITsHere we review core REIT fundamentals that underpin valuation. You will examine legal structure, tax treatment, distribution rules, and the main equity REIT categories, linking each to cash flow stability, growth prospects, and risk profile.
Legal definition and qualification testsPass-through taxation and investor impactsDistribution requirements and payout policyEquity REIT property-type classificationsImplications for growth, leverage, and risk
