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Our Methodology

Definitive leaders in real estate
research for over 30 years

Expert Insights and Trusted REIT Valuation Estimates

Find the Best REIT

To determine the best REITs, we employ a multi-step process of REIT valuation. Our company-level analytical work includes the following:

  • Extensive quantitative and qualitative analyses to assess the current market value of each company’s assets and liabilities. This is distilled into an NAV/sh estimate.
  • A systematic approach to evaluating the best REITs on a variety of critical factors to determine its merits relative to its peers. This then translates into a premium/discount to asset value at which the REIT’s shares should be valued. Applying the warranted premium/discount to the NAV estimate leads to our warranted share price.
  • The warranted share price is then compared to the current stock price to form our BUY/HOLD/SELL recommendations for REIT stocks.

It is important to note that we employ a relative pricing model when conducting our REIT analysis and making our company-specific BUY/HOLD/SELL recommendations (we discuss the overall pricing of REITs in our RMZ Forecasting Tool). We generally have an equal number of Buy-rated stocks and Sell-rated stocks within each property sector. In essence, we answer the question of which REIT stocks are overpriced and which stocks are underpriced at any point in time.

The effectiveness of our REIT analysis methodology is demonstrated through the impressive performance of our investment recommendations (View Track Record). The strength of our research is rooted in the focus that we place on property-level analysis through our published reports. Green Street analysts focus solely on their analytical work, and providing support to our clients – we are not distracted by obligations faced by typical Wall Street analysts, such as supporting investment banking activities.

REIT Valuation: Our NAV-Based Pricing Model

Our NAV-based pricing model has served as our primary tool for valuing REITs since 1989. The model is based on the logic that REIT valuation can best be assessed by analyzing separately the two key components of value:

  1. The market value of assets and liabilities
  2. The present value of future investment opportunities.