Argue why NAVPS, the net asset value per share, suits the valuation of listed real estate securities, and use forecast cash net operating income to estimate it

Net asset value per share estimates what a REIT's properties and other assets would fetch, less its liabilities, per share. It suits REITs because their assets are marketable buildings with observable private-market prices and cap rates, and it shows whether the shares trade at a premium or discount to what the portfolio could be sold for. To estimate it, take cash NOI for the last twelve months, add a full year's income from recent acquisitions, grow it to next year and divide by the market cap rate to value the property. Add cash, land, receivables and prepaid items; subtract debt and other liabilities; divide by shares outstanding. The trap is using balance-sheet book values, which ignore years of property appreciation.