Industry Specific · Real Estate (REIT)
AFFO vs FFO
This problem asks how Adjusted Funds from Operations differs from Funds from Operations in a REIT context.
Interview question
- Difficulty
- Easy
- Topic
- Industry Specific
- Subtopic
- Real Estate (REIT)
What this question trains
This question tests whether you understand the key cash flow metrics used to value and analyze real estate investment trusts. Candidates need to know how FFO is used as a starting point and how additional adjustments are made to move closer to a measure of distributable cash flow by accounting for items that are non recurring and for ongoing capital spending. Interviewers ask this because REIT valuation often depends on judging earnings quality, maintenance needs, and the cash a property portfolio can actually generate for investors.