Nareit FFO

As the market for real estate investment trusts continues to grow, it is critical that individuals have access to accurate and impartial data to make informed investment decisions. One important non-GAAP measure is Nareit Funds from Operations (FFO), which is used by REITs as a supplemental measure of operating performance. Nareit FFO is generally calculated by adding depreciation and amortization related to real estate to GAAP net income and excluding gains and losses from real estate sales. For the full definition of Nareit FFO, please refer to the Nareit FFO Whitepaper and related implementation guidance.

The Securities and Exchange Commission recognizes Nareit FFO as the standard non-GAAP measure for the real estate industry, and requires companies that report different forms of FFO (e.g., adjusted FFO, normalized FFO, company FFO, etc.) to reconcile those measures to Nareit FFO in addition to net income.

FFO is not intended to be used as a measure of the cash generated by a REIT nor of its dividend paying capacity. Nareit believes that statements of cash flows provided for by GAAP financial statements are adequate for analysts to assess the cash generated and used by REITs.

Nareit is committed to increasing the use of  Nareit-defined FFO and improving the understandability and uniformity of FFO estimates. In recent years, Nareit has urged member companies that provide FFO guidance related to a company-defined version of FFO to provide guidance on Nareit-defined FFO as well. 

STATUS: Not a legislative issue.


White Paper:
Related Implementation Guidance:


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