Real Estate
Today’s price sits at the 48.0th percentile of modeled fair value — 46% of modeled scenarios put fair value above the market.
- Median fair value
- 100.6
- Upside to median
- +0.6%
- Last close
- $90.53
- Confidence
- moderate-high
Return distributions, not point forecasts
Percentiles describe the spread of scenario outcomes under the stated method. The width of the range carries as much information as the midpoint.
One year
modeled- P90
- +22.0%
- P75
- +14.5%
- Median
- +6.5%
- P25
- -1.0%
- P10
- -14.0%
64% of modeled scenarios end positive.
Distribution yield of roughly 4.1% plus AFFO growth of about 3% (same-store NOI of 4.1% less an annual refinancing drag from resetting 4.2% average debt toward a roughly 6.1% marginal cost across one fifth of the fixed-rate book) plus 30% of the modeled +0.6% fair-value gap converging within the year. The scenario-implied beat probability is diagnostic only and is read against the 4.58% one-year Treasury par hurdle.
Three years, annualised
modeled- P90
- +14.0%
- P75
- +10.5%
- Median
- +6.5%
- P25
- +2.5%
- P10
- -1.5%
Three-year explicit model: same-store NOI growth of about 3% per year, distribution yield, per-share accretion from repurchases executed at net-asset-value discounts, and a terminal capitalisation rate of 6.0%, discounted at the one-year Treasury hurdle plus a 4.5% real-estate risk premium.
Against the Treasury hurdle
- 1y Treasury
- 4.58%
- Expected excess
- +1.9%
- Basis
- proxy
A modeled 1.92 percentage point edge over the 4.58% one-year Treasury par yield is thin compensation for property cycle, leverage and refinancing risk. On the capitalisation-weighted implied cap rate of 5.7% the sector yields only 44 basis points more than the ten-year Treasury, which is the sharpest statement of the same point.
6 in this asset class
| Symbol | Valuation | Fair value | Last close | 1y modeled |
|---|---|---|---|---|
| REET Global Real Estate | +0.4Somewhat cheap | 102.0 | $25.98 | +6.9% |
| REM Mortgage Real Estate | +0.8Somewhat cheap | 104.0 | $18.69 | +7.4% |
| REZ Residential and Specialized REITs | +0.2Fair | 101.0 | $89.22 | +6.6% |
| SRVR Data Center and Digital REITs | -2.5Exceptionally expensive | 88.0 | $28.52 | +3.4% |
| VNQ US Real Estate | +0.1Fair | 100.6 | $90.53 | +6.5% |
| XLRE US Real Estate Sector | -0.6Somewhat expensive | 97.0 | $41.34 | +5.6% |