E475 - Why REIT Dividend Payout Ratios Look Impossible

Why REIT Dividend Payout Ratios Look Impossible

REIT Valuation: FFO and AFFO Analysis Guide

Breaks down why REIT dividend payout ratios calculated on GAAP net income routinely look "impossible" (well over 100%, sometimes 300%+) even for perfectly healthy REITs — because depreciation, a massive non-cash accounting expense for real estate, crushes reported earnings without ever touching actual cash in the bank. Covers FFO and AFFO as the real industry-standard cash metrics, occupancy and WALE (weighted average lease expiry) as portfolio-quality signals, gearing ratios and the 50% regulatory buffer, and the "80–95 Rule" heuristic for sector-level payout sanity checks.

REIT...