Heard on the Beach: Valuation Reality Check
Published July 31, 2017 from the Heard on the Beach series
Low interest rates and heavy foreign capital flows have caused NAV signals to be harder to interpret in recent years. An IRR approach to valuing each REITs property portfolio helps to spot instances where private-market pricing and, therefore, NAV may be amiss. Adding this new approach to the toolkit should enhance the output of our NAV-based work. The recent introduction by our Real Estate Analytics team of a broad and thoughtful set of long-term, market-level growth rates affords the opportunity to produce implied IRRs for the portfolio of each REIT.