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.

National Property Trust
Panel A. Operating Statement Summary
Net revenue ......................................................  $100,000,000
Less:
Operating expenses ............................................. 40,000,000
Depreciation and amortization .......................... 22,000,000
General and administrative expenses ................. 6,000,000
Management expense ........................................... 3,000,000
Income from operations ..................................... 29,000,000
Less:
Interest expense* .................................................. 6,400,000
Net income (loss) .............................................  $ 22,600,000

Panel B. Balance Sheet Summary
Assets
Cash ..................................................................  $ 51,500,000
Rents receivable .................................................... 2,500,000
Properties @ cost .............................................. 700,000,000
Less: Accumulated depreciation ..................... 450,000,000
Properties—net ................................................. 250,000,000
Total net assets ..............................................  $304,000,000
Liabilities
Short term ........................................................  $ 12,000,000
Mortgage debt* ..................................................  80,000,000
Total ...................................................................... 92,000,000
Shareholder equity .......................................  $ 212,000,000
Total liabilities and equity .............................. $304,000,000

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? What does this price range imply about the amount of dividend that National would have to pay to be in line with comparable REITs?

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?