REIT Valuation: Net Asset Value Approach

The market value per share of a REIT or REOC will be:

No. A REIT or REOC provides investors with liquidity and professional management, which adds value to the properties themselves.

Not so. Consider that the property values are private values, and investors in public equity shares like REITs and REOCs may have a lower value for these net assets.

Correct! Based on market conditions, management ability, and other factors, REITs and REOCs have been observed to trade up to a 25% premium or a 25% discount to NAVPS.

always at a discount to net asset value per share (NAVPS).

always at a premium to net asset value per share (NAVPS).

either at a discount or premium to net asset value per share (NAVPS).