Stabilized noi calculation11/5/2022 If you look around online, you will see many different approaches to the net asset value model. We will also look at the fair market value of the debt and some of the subsidies on the debt in more detail here.Īnd we’ll have to make more of a realistic calculation for the net asset value per share, factoring in the diluted shares outstanding and some of the circular references that could come up. One is that we’re going to look at this region-by-region and business-segment-by-business-segment, we’re also going to have to pay a lot more attention to the equity investments, the unconsolidated real estate, which is something that Park Hotels didn’t have. However, there are a few differences here. And then, we add up everything on the assets side, we move to the liabilities side, and do something similar there, and then, we subtract the market value of the liabilities from the market value of the assets to get to the net asset value. If we have goodwill and intangibles, we take those to zero. We’re still going through the same basic process here, where we take the forward NOI from the REIT, we apply an assumed cap rate to it to get to the market value of the gross real estate operating assets, and then, we value some of the other assets, like the construction progress, the cash, and the accounts receivable. Now, to start with, I would note that this is really just an extension of what you already learned in the simplified model on Park Hotels and Resorts. Then, in the next lesson, we’ll go to the liabilities and equity side and fill out everything there, calculate the net asset value per share, and set up some sensitivity tables at the end. That will take us to the end of the asset side of this model, and we’ll build up to the total market value of the assets. And then, in part three, we’ll look at some of the REITs other assets like construction progress, and land, and a few others, and learn how those factor into the net asset value model. STABILIZED NOI CALCULATION HOW TOThen, in part two, we’ll go through AvalonBay’s operating real estate assets and learn how to value those assets using a combination of cap rates and other factors. And in part one, I’ll explain our approach and how it differs from what you might see in other sources, and equity research reports, and other sources online. We are going to start looking at the net asset value model for AvalonBay in this lesson. Welcome to our next video in this REIT valuation case study. REIT NAV Model: Market Value of Assets (Excerpt from 4-Hour REIT Valuation Case Study) 5:40: Part 2: Operating Real Estate Assets.0:58: Part 1: Our Approach and Why It Differs from Others.
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