REIT net asset value
NAV per share, the premium or discount, the implied cap rate.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: reit net asset value.Updated 2 October 2026
Part of real estate models, with the models, labs and guides around it.
What it does
What a REIT would be worth if its buildings were sold one by one. Forward NOI is capitalised at the cap rate private buyers pay; other assets (land, development, joint ventures) are added at book; net debt is deducted; the result is divided by shares. The share price against NAV is the market’s verdict on management and on the cost of its equity: a premium means new shares buy more property than they cost, a discount means the opposite. The implied cap rate turns the share price back into a cap rate, so it can be compared with what buildings trade at privately.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 42–45: Cap rate the portfolio is valued at, Growth from year-end run-rate to forward NOI, Other assets at book: land, development, joint ventures, NAV cap rate sensitivity step
- NAV, rows 6–11: Forward cash NOI: year-end run-rate grown one year, Value of the real estate: forward NOI / cap rate, Plus other assets at book, Less net debt…
- NAV, rows 14–16: Premium (discount) to FY0 NAV at today’s share price, Equity market value, FY0, Implied cap rate: forward NOI / (market value + net debt - other assets)
- NAV, rows 19–20: NAV per share at the cap rate less one step, NAV per share at the cap rate plus one step
- Valuation, rows 6–8: Price / FFO per share, Price / AFFO per share, Dividend yield
What a reviewer looks for
- Capitalising trailing NOI.
- Dividing by the weighted average share count rather than shares outstanding at the date.
- One cap rate for a portfolio of very different assets, without saying so.
Learn it, then build it
Vocabulary: REIT Net Asset Value (NAV), Implied Cap Rate, Cap Rate (Capitalisation Rate).