When the Roof Falls

摘要

If you're ready to join the bull market in real estate investment trust stocks, you won't hear about earnings. The term of art is "funds from operations." But too often you can't trust it. FFO-figured profitability looks better than it actually is. The wacky accounting that goes into calculating earnings per share lets REIT sponsors gull investors. Why can't REITs, which own collections of buildings, use traditional net income like everybody else? Because of the outsized role depreciation plays in real estate accounting.