Nancy Anderson, CFO and vice president of the Real Property Association of Canada (REALPAC), joined REIT.com for a video interview at REITWise 2017: NAREIT’s Law, Accounting & Finance Conference in La Quinta, California.
Anderson discussed the health of Canada’s real estate investment market. She noted that Canadian total returns outpaced the global marketplace in 2016, while 2017 has been marked by “very strong” investor demand, particularly from foreign investors. Property fundamentals are “pretty healthy” across most regions and asset classes, according to Anderson.
Meanwhile, Anderson said REALpac has published two white papers that define adjusted funds from operations (AFFO) and establish a new metric, adjusted cash flow from operations (ACFO). The move is intended to deflect criticism of non-Generally Accepted Accounting Principles (GAAP) reporting, especially data used to determine capital expenditure reserves.
Anderson said AFFO is intended to be a recurring economic earnings measure and ACFO is intended to be a sustaining economic cash flow measure.
“We’ve tried to get some structure to that non-GAAP reporting, hoping to decrease the criticism around it and come up with better transparency and consistency,” Anderson said.