4. NAV for each REIT at year end 2023. In

Question

4. NAV for each REIT at year end 2023. In the NAV calculation, assume that NOI is expected to grow at 3% for both REITs over the next year, and use a private market cap of 5.5% for EQR and 5.8% for MAA (these are the private market cap rates used by GreenStreet in their most recent NAV analyses; they are nominal cap rates). In our NAV calculations, you need to include mark-to-market adjustments for the value of longterm debt. Greenstreet estimates an adjustment of -669,832 thousand dollars for EQR and -397,135 thousand dollars for MAA. Briefly explain why we need to account for these adjustments in your answer, and why the adjustments are negative. 5. NAV/share for both REITs at year-end 2023. Using the year-end 2023 share prices from question 2, calculate the NAV premium or discount for both REITs at year-end 2023. 6. Implied cap rates for both REITs at year-end 2023.