Equity REIT A REIT which owns, or has an 'equity interest' in, rental real estate (rather than making loans secured by real estate collateral).

Equity Market Cap The market value of all outstanding common stock of a company. Equitization The process by which the economic benefits of ownership of a tangible asset, such as real estate, are divided among numerous investors and represented in the form of publicly-traded securities. Under IRS Revenue Procedure 2008-68, so long as a REIT provides its shareholders with a choice between cash or stock (and so long as at least 10 percent of the total dividend is available in cash), the entire dividend distribution is treated as a distribution of cash for purposes of the tax rules to qualify as a REIT. Plus, impairment write-downs of depreciable property and of investments in unconsolidated affiliates caused by a decrease in value of depreciable property in the affiliateĪdjustments to reflect the entity’s share of EBITDA re of unconsolidated affiliates and consolidated affiliates with non-controlling interests Elective Stock Dividend Elective stock dividends are dividends comprised of a combination of cash and stock. Plus, or minus losses and gains on the disposition of depreciable property, including losses/gains on change of control EBITDA re Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate EBITDAre is calculated as follows: EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization. DownREIT A downREIT is structured much like an UPREIT, but the REIT owns and operates properties other than its interest in a controlled partnership that owns and operates separate properties. The cost of debt capital is merely the interest expense on the debt incurred. The cost of equity capital generally is considered to include both the dividend rate as well as the expected equity growth either by higher dividends or growth in stock prices. Cost of Capital The cost to a company, such as a REIT, of raising capital in the form of equity (common or preferred stock) or debt. There is no standardized definition of CAD or FAD therefore, financial statement users should understand how the measure is defined by the company. CAD or FAD is generally calculated by subtracting from AFFO major non-cash items.

Cash (or Funds) Available for Distribution Cash (or Funds) available for distribution (CAD or FAD) is a measure of a REIT's ability to generate cash and to distribute dividends to its shareholders. Generally, high cap rates indicate higher returns and greater perceived risk. Capitalization Rate The capitalization rate (or 'cap' rate) for a property is determined by dividing the property's net operating income by its purchase price. There is no standardized definition of AFFO therefore, financial statement users should understand how the measure is defined by the company. AFFO is usually calculated by subtracting from Funds from Operations (FFO) both (1) normalized recurring expenditures that are capitalized by the REIT and then amortized, but which are necessary to maintain a REIT's properties and its revenue stream (e.g., new carpeting and drapes in apartment units, leasing expenses and tenant improvement allowances) and (2) the adjustment to GAAP revenue to 'straight-line' rents. Adjusted Funds From Operations (AFFO) This term refers to a computation made by analysts and investors to measure a real estate company's recurring/normalized FFO after deducting capital improvement funding.

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