REIT

A REIT, short for real estate investment trust, is a company that owns, operates, or finances income producing real estate, structured so it avoids corporate income tax as long as it distributes nearly all of its taxable income to shareholders as dividends. Most REITs hold physical property, offices, apartments, shopping centers, warehouses, or data centers, and collect rent as their main source of revenue.

Because a REIT's value sits mostly in the real estate it owns rather than in operations it has to run, asset based approaches suit this kind of business better than they would a company whose value comes mainly from brand, software, or talent. Book value itself tends to understate what the properties are worth, since depreciation keeps writing buildings down even as the properties often gain value, so analysts estimate net asset value (NAV) from current property values instead, and track performance with funds from operations, which adds that depreciation back.