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REIT Glossary

AFFO (Adjusted Funds From Operations)

A refinement of FFO which subtracts capital expenditures and other non-cash items.

Cap Rate (Capitalization Rate)

A ratio that measures the annual net operating income of a property to its purchase price or market value.

Capital Stack

The combination of various financing sources that are used to fund the operations and development of a real estate project.

Debt to EBITDA

A leverage ratio that indicates how many years it would take for a company to pay back its debt if its EBITDA remains constant.

Development Yield

The expected annual income of a property development project as a percentage of its total costs.


The payment made to REIT shareholders from the income generated by the trust.

Diversified REIT

A REIT that holds a mix of types of properties, such as both office and retail spaces.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

A measure used to analyze and compare profitability.

Equity REIT

Primarily owns and operates income-producing real estate.

Externally Managed REITs

REITs that contract with an outside company to manage and oversee their assets and operations.

FFO (Funds From Operations)

A measure of the cash generated by a REIT, adding depreciation back to net income.

Gross Leasable Area (GLA)

The amount of space available to be rented out to tenants.

Hybrid REIT

Combines the investment strategies of equity REITs and mREITs.

Internally Managed REITs

REITs that have their own employees and internal structures to manage and oversee their assets.


The ability to quickly convert assets into cash.

LTV (Loan-to-Value)

A metric that compares the size of a loan to the value of a property.

Mortgage REIT (mREIT)

Provides money either directly in the form of mortgages or other types of loans, or indirectly through the acquisition of mortgage-backed securities.

NAREIT (National Association of Real Estate Investment Trusts)

The industry association for REITs in the US.

NAV (Net Asset Value)

Represents the total value of the REIT’s assets minus its liabilities.

NOI (Net Operating Income)

The total income from a property after operating expenses but before deducting taxes and interest payments.

Occupancy Rate

The percentage of all rental units that are currently rented.

Operating Partnership (OP) Units

Units of interest issued by the operating partnership subsidiary of a REIT.

Price to FFO Multiple

A valuation metric that compares a REIT’s current share price to its FFO per share.

REIT (Real Estate Investment Trust)

A company that owns, operates, or finances income-producing real estate.

REIT ETF (Real Estate Investment Trust Exchange-Traded Fund)

An investment fund traded on stock exchanges that holds REIT stocks.

REIT Index

A benchmark that tracks the performance of a defined list of REITs.

REIT Qualification

Standards a company must adhere to in order to qualify as a REIT.

Rights Offering

An offer made by a company to its existing shareholders to purchase additional shares.

Same Store NOI

Represents the net operating income from properties operational for the entirety of two comparison periods.

Sector-Specific REIT

A REIT that focuses on one type of property, such as healthcare facilities.


The main entity or individual responsible for the creation, design, and overall operation of a REIT.

Straight-Line Rent

An accounting method where rental income and expenses are recognized evenly over the term of the lease.

TIC (Tenants in Common)

An ownership structure where multiple parties can hold an interest in the same property.

Triple Net Lease

A lease agreement where the tenant is responsible for paying the property’s real estate taxes, building insurance, and maintenance costs.

UPREIT (Umbrella Partnership REIT)

Allows property owners to contribute their assets to a partnership in exchange for operating partnership units.


The annual dividend paid by a REIT divided by its current share price.