Knowledge Base: REIT Modeling Tutorials

Real estate investment trusts (REITs) are entities that acquire, operate, develop, renovate, and sell properties, such as apartment, office, and industrial buildings.

REIT Modeling or REIT Financial Modeling refers to the process of building projection models, valuations, and transactional models, such as for mergers, acquisitions, and leveraged buyouts, for these companies.

REITs are quite different normal companies because they are required to distribute a high percentage of their Net Income as Dividends to be exempt from corporate-level taxes (90% of Net Income must be distributed in the U.S.).

They also issue Equity and Debt constantly to support their property acquisitions and developments, and they must maintain high percentages of real estate-related revenue and assets (the exact percentages vary by country).

Due to these requirements, building a REIT model means that you need to make many assumptions about Debt, Equity, Dividends, and REIT-specific metrics such as Funds from Operations (FFO) to make sure the REIT complies with everything.

We present below a series of samples and excerpts from our full REIT Modeling course: