Skip to main content
No. of Recommendations: 7

The site you linked to gives an example of a NAV calculation done by Barclays Equity Research on UDR (an apartment REIT) based on UDR's Q4 FY2010 data. The NAV calculation is on page 8 of the PDF:

Here is the UDR 10-K for 2010:

If you compare the NAV calculation to the numbers in the 10-K it's pretty clear what's going on. Barclay's is using forward-looking NOI and Cap Rate to determine the *market value* of the real estate operations ($7.3B). They are not using the depreciated cost basis ($5.1B) anywhere in the calculation. They add in other real estate (construction in progress and land held for development) and other assets (cash, etc.) -- all at cost basis -- to get Gross Market Value of Assets, and then they subtract debt and other claims to get NAV.

It makes sense to use a market value calculation rather than the depreciated cost basis for the real estate operations because you would expect these assets to appreciate in value.

Hope this helps.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.