Problem $21-1$

You have been presented with the following set of financial statements for National Property Trust, a REIT that is about to make an

initial stock offering to the public. This REIT specializes in the acquisition and management of warehouses. Your firm, Blue Street

Advisors, is an investment management company that is considering the purchase of National Property Trust shares. You have been

asked to prepare a financial analysis of the REIT.

${?}^{**}$ At $8\%$ interest only.

${?}^{**}$ At $8\%$ interest only.

$10,000,000$ shares outstanding.

Required:

a$.$ Develop a set of financial ratios that will provide Blue Street Advisors with useful information in the evaluation and comparison of

National Property Trust with other REITs.

b$.$ Your research also indicates that the shares of comparable REITs specializing in warehouse acquisitions in the same regions are

selling at dividend yields in the range of $8$ percent. Price multiples for these REITs are about $12$ current FFO. What price range does

this suggest for National shares?

c$.$ What is the NAV for National Property Trust assuming that a blended capitalization rate of $10$ percent would be applicable for the

properties owned by Blue Street Advisors?