NAVPS

CFA Level II Alternative Investments
#1

how do we get from market value of property to their NAV?

#2

I think you need:

  1. NOI 1 (=expected net operating income in the coming year)

  2. devide NOI 1 by cap rate (=market required rate of return) > you get the estimated value of operating real estate

  3. add other tangible assets (cash&equiv., land, A/R, prepaid/other assets)

Note: INtangible assets (goodwill, deferred financing expenses, deferred taxes) are ignored!

  1. subtract liabilities (debt, other liabilities)

= NAV

#3

Addendum: NAVPS = NAV/shares outstanding