AFFO is cash flow generated by operations.

Interim calculation in computing income tax liability
It is computed by subtracting certain allowable adjustments from gross income.

Interim calculation in computing income tax liability

It is computed by subtracting certain allowable adjustments from gross income.

A way to calculate income tax that disallows certain deductions, credits, and exclusions

This was intended to ensure that individuals, trusts, and estates that benefit from tax preferences do not escape all federal income tax liability. People must calculate their taxes both ways and pay the greater of the two.

or "cap" rate, determined by dividing the property's net operating income by its purchase price

Generally, high cap rates indicate higher returns and greater perceived risk.

CAD or FAD measures a REIT’s ability to generate cash and distribute dividends to shareholders.

The cost of raising capital in the form of equity (common or preferred stock) or debt
The cost of equity capital generally includes both the dividend rate and the expected equity growth either by higher dividends or growth in stock prices. The cost of debt capital is merely the interest expense on the debt incurred.

Funds from Operation (FFO) dividend by dividends paid to shareholders and unit holders.

Earnings Before Interest, Taxes, Depreciation, and Amortization
Also referred to as Net Operating Income (NOI)

The market value of all a company’s outstanding common stock

A REIT that owns or has an "equity interest" in rental real estate (rather than making loans secured by real estate collateral)

FFO is Generally Accepted Accounting Principles (GAAP) net income plus amortization and depreciation, less any gains from the sale of real estate.

The most commonly accepted and reported measure of REIT operating performance. Equal to a REIT's net income, excluding gains or losses from sales of property, and adding back real estate depreciation.

Combines the investment strategies of both equity REITs and mortgage REITs.

The market value of all outstanding common stock of a company plus the value of all UPREIT partnership units as if they were converted into the REIT's stock. It excludes convertible preferred stock, convertible debentures and warrants.

A REIT is a company dedicated to owning, and in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses.

The amount of debt in relation to either equity capital or total capital.

A REIT that makes or owns loans and other obligations that are secured by real estate collateral.

The net "market value" of all a company's assets, including properties, after subtracting all its liabilities and obligations.

The ability to raise funds (both equity and debt) at a cost significantly less than the initial returns that can be obtained on real estate transactions.

A REIT is a company dedicated to owning, and in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also finance real estate.

The federal law that authorized REITs. Its purpose was to allow small investors to pool real estate investments to get the same benefits of direct ownership, while also diversifying risks and obtaining professional management.

Federal tax law change that allows a REIT to own up to 100% of stock of a taxable REIT subsidiary that can provide services to REIT tenants and others. The law also changed the minimum distribution requirement from 95 percent to 90 percent of a REIT's taxable income—consistent with the rules for REITs from 1960 to 1980.

Averages tenant’s rent payments over the life of the lease. Real estate companies such as REITs "straight line" rents as required by generally accepted accounting principles.

Federal law that altered the real estate investment landscape by allowing REITs to own, operate and manage most types of income-producing commercial properties. It also stopped real estate "tax shelters" that had attracted capital from investors based on the amount of losses that could be created.

The total market value of a REIT's outstanding common stock and indebtedness.

A stock's dividend income plus capital appreciation, before taxes and commissions.

The partners of the Existing Partnerships and a newly formed REIT become partners in a new partnership termed the Operating Partnership. For their respective interests in the Operating Partnership ("Units"), the partners contribute the properties from the Existing Partnership and the REIT contributes the cash proceeds from its public offering. The REIT typically is the general partner and the majority owner of the Operating Partnership Units.

After a period of time (often one year), the partners may enjoy the same liquidity of the REIT shareholders by tendering their Units for either cash or REIT shares (at the option of the REIT or Operating Partnership). This conversion may result in the partners incurring the tax deferred at the UPREIT's formation. The Unitholders may tender their Units over a period of time, thereby spreading out such tax. In addition, when a partner holds the Units until death, the estate tax rules provide that the beneficiaries may tender the Units for cash or REIT shares without paying income taxes.