This REIT financial model template acts as a guideline for modeling a real estate investment trust (REIT). This model will help you get an understanding of the financial workings of a REIT.
This template is part of CFI's premium template library and is an advanced business-case financial model. For more financial models like this, check out CFI's bank financial model template, TMT company financial model template, and restructuring financial model.
Full-Immersion students of any of CFI's programs such as the Financial Modeling and Valuation Analyst (FMVA®) Certification Program get these premium templates completely for free!
Contents in this REIT Financial Model Template
- Industry-specific Financial Model for REITs
- Historical Financial Statements
- Projected 3-Statement Model
- Interest Rate Projections
- Ratio Analysis
- Discounted Cash Flow (DCF) Analysis
Real Estate Investment Trust
Real estate investment trusts (REIT) are firms that specialize in managing real estate to generate cash flow and income. The aim of a REIT is to invest in real estate and use the rental income and cash flows to distribute dividends to shareholders. Since directly investing in real estate requires huge amounts of capital, REITs provide an investor the opportunity to invest in real estate even if they lack the ordinarily required funds.
Generally, REITs have shown to have a low correlation with other asset classes. This makes a REIT a great diversification tool for any investor's portfolio. Since income from REITs is based on long-standing dividends and capital appreciation, REITs are a great investment for people investing for retirement savings. Additionally, the dividends on REITs are often substantial as they are required by law to disburse at least 90 percent of their taxable income to their shareholders every year.
Investing in a REIT allows an investor to gain the advantages of investing in an equity asset and simultaneously diversify their portfolio from equity assets. These benefits include liquidity from actively traded equity markets and transparency due to the regulation of these markets. Use this REIT financial model template to learn how to properly value a REIT!