Nareit Funds From Operations (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. For the full definition of Nareit FFO, please refer to the Nareit FFO White Paper - 2018 Restatement.

The Securities and Exchange Commission recognizes Nareit FFO as a standard non-GAAP measure for the real estate industry, and encourages 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 flow information provided 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: The Nareit FFO White Paper - 2018 Restatement is effective for annual periods beginning after Dec. 15, 2018 and interim periods reported within those periods. Early application is permitted in any interim or annual period after issuance of the Nareit FFO White Paper - 2018 Restatement. The Nareit Funds From Operations White Paper - 2018 Restatement supercedes Nareit's 2002 White Paper on Funds From Operations and its ensuing guidance issued by Nareit. The 2018 Nareit FFO White Paper Restatement is intended to serve as a useful distillation and consolidation of previous Nareit guidance and is not meant to alter the fundamental definition of FFO.

White Paper:

Nareit Funds From Operations White Paper - 2018 Restatement - 12/3/2018


Nareit FFO 2002 White Paper and Related Guidance