REITs and Transparency

Stock exchange traded U.S. REITs give investors access to income-producing real estate combined with the transparency of public markets.

REITs must disclose financial information to investors and report on material business developments and risks. This transparency enables investors to analyze and value REIT assets independently. The financial markets put a value on the stock prices of REIT companies on a real-time basis as investors analyze and make investment decisions based on their evaluation of future prospects. 

Market transparency allows investors to easily identify and evaluate REIT assets.

Stock exchange-listed REITs are held to the same standards and requirements as other publicly traded companies. Listed REIT reporting is governed by the Securities & Exchange Commission, Generally Accepted Accounting Principles, and the various stock exchanges on which their shares trade.

Listed Equity REITs also report Funds from Operations (FFO) as a supplemental earnings measure in their financial statements. FFO is considered by many to be the most reliable metric by which to value property-owning real estate companies, and provides a good indication of the dividend-paying capacity of REITs.

PREVIOUS: Liquidity

NEXT: Diversification