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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (207874)	6/23/2009 2:08:18 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 306849

bc, the trend i'm keying on now is that the fed has realized high stock / commodity prices is bad for bond yields. given that the government needs $4.5 trillion in debt at low interest rates, i think they have had second thoughts about an elevated stock and commodity market (ie, time to pull in liquidity). that and all the suckers are in and not many people are left to fleece. having said that, they don't want a stock market crash, either. the next few months will be interesting.

To: Perspective who wrote (207874)	6/23/2009 4:40:53 AM
From: RockyBalboa	Respond to of 306849

Like in the Residential RE "ATM" system this would work if and as long property values would go up and a lender sees no qualms in borrowing them their dividend payable against their rising (or at least stable) asset value. Since this is no longer true in the current environment - except for the recent burp of hope, I agree with you that the concept of FFO is unsuitable. It is a far cry from "fundamentally flawed" but since the dividend payment is so high it is clearly unsustainable. Not long back: Message 25275675

To: Perspective who wrote (207874)	7/4/2009 6:28:45 PM
From: Perspective	Respond to of 306849

How 'bout that, tripped across that paragraph on FFO in the Tanger Factory Outlets 10Q: yahoo.brand.edgar-online.com Funds From Operations Funds from Operations, or FFO, represents income before extraordinary items and gains (losses) on sale or disposal of depreciable operating properties, plus depreciation and amortization uniquely significant to real estate and after adjustments for unconsolidated partnerships and joint ventures. FFO is intended to exclude historical cost depreciation of real estate as required by Generally Accepted Accounting Principles, or GAAP, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is widely used by us and others in our industry to evaluate and price potential acquisition candidates. The National Association of Real Estate Investment Trusts, Inc., of which we are a member, has encouraged its member companies to report their FFO as a supplemental, industry-wide standard measure of REIT operating performance. In addition, a percentage of bonus compensation to certain members of management is based on our FFO performance. BC