On the Quality of Ffo Forecasts

18 Pages Posted: 13 Dec 2006

See all articles by David H. Downs

David H. Downs

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate; The Kornblau Institute

Z. Nuray Guner

Middle East Technical University (METU)

Abstract

This paper is the first attempt to provide an objective assessment of the quality of real estate funds from operations (FFO) forecasts. The work, which looks past the more primitive question concerning the appropriate measure for real estate earnings, quantifies and tests the quality of real estate investment trust (REIT) FFO forecasts relative to the net income forecasts of several comparison groups. The results show the high quality of REIT forecasts are remarkably robust and are not driven by the level of analyst attention. Investors in a post-Enron and Sarbanes-Oxley era may find the implications for high quality forecasts of real estate earning to be an appealing investment concept.

Keywords: real estate, funds from operations, REIT, forecasts

JEL Classification: M41, M49, L85, L11, L14, K20, K22, K23, G34, G38

Suggested Citation

Downs, David H. and Guner, Z. Nuray, On the Quality of Ffo Forecasts. Journal of Real Estate Research, Vol. 28, No. 3, 2006, Available at SSRN: https://ssrn.com/abstract=951512

David H. Downs (Contact Author)

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate ( email )

Richmond, VA 23284-4000
United States

The Kornblau Institute ( email )

Richmond, VA 23284-4000
United States

Z. Nuray Guner

Middle East Technical University (METU) ( email )

Ankara, 06531
Turkey

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