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REIT University

Canadian REIT glossary

Search 130 terms from the Beginner, Intermediate and Advanced tracks, with a direct link back to every course that introduces them.

A

ACB (adjusted cost base)
Your tax cost for the units; reduced by every ROC dollar. You track it — your broker often doesn't, correctly.
From Course 5
Accretion
Increase in per-unit FFO from a transaction; a financing artifact, not proof of value creation.
From Course I-3
Adjusted book equity
Reported equity + exchangeable-unit liability; the comparable equity base across structures.
From Course I-3
AFFO
FFO minus sustaining capex, leasing costs, tenant improvements, and straight-line rent — a proxy for distributable cash.
From Course 3From Course I-2
AIF
Annual Information Form. Annual reference document: business description, portfolio, risk factors, material contracts.
From Course I-1
Appraisal mix
Share of portfolio externally vs internally valued in the period; a credibility signal, not a guarantee.
From Course I-4

B

Back-testing
Running the model against known history with as-of information; the price of admission for trusting any forward output.
From Course A-2
Bought deal
Underwritten equity raise priced at a discount to market; the fastest way REITs issue units below Reported NAV.
From Course I-3

C

Cap rate
NOI ÷ value. The yield used to convert a property's income into a valuation; lower cap rate = higher value.
From Course 2
Cap rate spread
Cap rate minus the 10-year GoC yield; real estate's risk premium and the anchor of staleness Test 2.
From Course I-4
Cap-rate sensitivity
Small cap-rate changes produce large NAV swings because leverage concentrates the entire GAV change in equity.
From Course 4
Capitalized-interest flip
The migration of a project's interest from capitalized (invisible to FFO) to expensed at completion.
From Course A-2
Cash flow hedge / OCI
Hedge-accounting treatment that parks the unrealized effective derivative mark in other comprehensive income rather than net income; when the hedged cash flows occur, the accumulated amount recycles from OCI into interest expense (or the relevant P&L line), so it does reach profit or loss.
From Course A-1
Cash-basis SPNOI
SPNOI excluding straight-line rent and similar non-cash lease items; the collections lens.
From Course I-5
Catalyst
An event (asset sales, buyback, privatization) that forces price and NAV toward each other. Discounts without catalysts can persist for years.
From Course 4
Certificate of Insurance (COI)
The CMHC coverage attached to an insured loan — runs for the full amortization period (25–40 years), transferable between approved lenders, surviving renewals.
From Course A-1
Class B exchangeable LP unit
Operating-partnership unit exchangeable 1:1 into trust units; economically identical, but a financial liability at FVTPL because it fails the puttable exemption.
From Course I-3
CMHC-insured mortgage
Multi-family mortgage carrying federal default insurance under the National Housing Act program; the cheapest term debt in Canadian real estate.
From Course A-1
Column coherence
The test that each REIT's metrics describe one consistent economic machine; incoherence flags an error or a thesis.
From Course I-6
Committed occupancy
In-place plus signed-but-not-yet-paying leases; runs higher, headlines often.
From Course I-5
Comparable set
Peers matched on property economics (type, format, geography) so residual differences are interpretable.
From Course I-6
Covenant / DoT cap
Contractual leverage limits (Declaration of Trust, debenture indentures, bank lines) — usually 60–65% of GBV.
From Course 6
Covenant headroom
The distance to breach expressed in the shocked variable's own units (e.g., "assets can fall 32.5%") — computed, never asserted.
From Course A-1
Covenant vs management metric
A covenant is a contractual test with a breach consequence; a management metric is a look-alike ratio with none. The MD&A table mixes them.
From Course A-1
Coverage (of SPNOI pool)
Same-property NOI as a share of total NOI; a pool-quality test that must pass before the SPNOI row is trusted (I-5).
From Course I-6

D

Debt-to-EBITDAFV
Debt ÷ EBITDA excluding fair value adjustments — years of earnings to repay debt; mark-immune.
From Course 6
Debt-to-total-assets / GBV
Total debt ÷ total (fair value) assets. The headline leverage ratio; denominator moves with property marks.
From Course 6
Declaration of Trust
The trust's governing document; sets unitholder rights and operating limits (e.g., maximum leverage).
From Course 1
Decomposition (of a gap)
Splitting a valuation gap into definition artifact + structural discount + residual; only the residual is a thesis.
From Course I-6
Dilution module
The projected unit-count machinery (DRIP, issuance, unit comp, NCIB) — built even when every switch is off (I-3, projected).
From Course A-2
Direct capitalization
Valuation as stabilized NOI ÷ capitalization rate; the workhorse method for stable income properties.
From Course I-4
Distribution
Cash paid to unitholders, usually monthly. Not a dividend — different tax treatment (Course 5).
From Course 1From Course 5
Distribution policy constraint
Modelling distributions as observed policy and reading implied payout ratios as outputs; payout >100% is a finding, not a forecast.
From Course A-2
Distribution safety verdict
REIT Stack's Covered / Watch / Elevated risk / Insufficient data output, driven by AFFO payout plus one-way risk escalators.
From Course 5
DRIP
Distribution reinvestment plan — distributions auto-buy new units, sometimes at a discount.
From Course 5From Course I-3
DSCR
Debt service coverage ratio: earnings against interest plus scheduled principal amortization. A coverage test that is often the binding constraint for an amortizing mortgage borrower (as it is among CAPREIT's coverage covenants here) — but which covenant actually breaches first depends on the stress path (§1.6): a leverage covenant can bind earlier when asset values fall faster than earnings.
From Course A-1

E

Error attribution
Assigning forecast misses to operations, financing, or analyst override — the third bin kept in writing.
From Course A-2
Escalator inference
Estimating undisclosed contractual rent steps as the residual of the same-asset bridge; legitimate, provided it is labelled.
From Course A-2
Exchangeable units
LP units held by a vendor (often the REIT's anchor tenant's parent), exchangeable 1-for-1 into trust units; received in tax-deferred property contributions.
From Course 1
Expiry ladder
Leased area and expiring rent scheduled by year; bounds the roll's contribution to any year's growth.
From Course A-2

F

Fair value model
Property remeasured to estimated market value each period; changes flow through profit or loss; no depreciation.
From Course 2
Fair value of debt
Disclosed economic value of debt vs its amortized-cost carrying value; below-market debt is an economic asset in your Real Estate NAV.
From Course I-4
FFO
Funds From Operations: net income with fair value swings, disposition gains, and other non-operating items reversed. The Canadian REIT earnings yardstick (REALPAC, Jan 2022).
From Course 3From Course I-2
First-year vs long-term spread
Renewal rate uplift measured in year one vs averaged over the renewal term; use first-year for near-term NOI, long-term for value.
From Course A-2
Forecast decay
The shift of forecast content from contract to assumption as the horizon extends; implemented as scenario cells replacing point estimates in outer years.
From Course A-2
Fully-exchanged basis
Unit count assuming all exchangeable units convert. The correct denominator for per-unit metrics.
From Course 1From Course I-2From Course I-3
Funding equation
The quarterly reconciliation of retained cash, disposals, and capital spend to facility draws or issuance; where model inconsistency surfaces.
From Course A-2
FVTPL
Fair value through profit or loss — how exchangeable units are measured; the source of the price-up-equals-loss effect.
From Course 2
FVTPL derivative
A derivative carried at fair value through profit or loss (no hedge accounting); its marks hit net income and are REALPAC-standard FFO reversals.
From Course A-1
FVTPL investment
Financial asset (e.g., units of another REIT) carried at fair value through profit or loss; remeasurements are REALPAC-standard FFO reversals.
From Course I-2

G

GAV
Gross asset value: the value of the property portfolio before deducting debt.
From Course 4

I

IAS 32 / puttable exemption
The rule that classifies redeemable units as liabilities, with an exemption that keeps the most subordinate class (trust units) in equity.
From Course 2
IAS 40
The IFRS standard for investment property; offers the fair value or cost model. Canadian REITs almost universally use fair value.
From Course 2
IFRS 13 / Level 3
Fair value measurement standard and its hierarchy; investment property sits at Level 3 — significant unobservable inputs.
From Course I-4
Implied-vs-disclosed spread
Gap between market-implied and disclosed cap rates per name (I-4); the market's mark-skepticism, comparable across a peer set.
From Course I-6
In-place occupancy
Space with tenants paying rent today.
From Course I-5
Information circular
Proxy document for the unitholder meeting; contains governance and executive compensation detail.
From Course I-1
Interest coverage
EBITDA ÷ interest expense. The rate-cycle stress gauge.
From Course 6
Interim statements
Unaudited condensed quarterly statements and MD&A; where new information usually appears first.
From Course I-1
Investment property
Property held to earn rent or for capital appreciation — the main asset line on a REIT balance sheet.
From Course 2

K

Key audit matter (KAM)
Matter the auditor judged most significant in the audit, described in the auditor's report. For REITs, typically investment property valuation.
From Course I-1

L

Leasing costs
Tenant improvements, inducements, and commissions to attract or retain tenants; deducted in AFFO.
From Course I-2
Leasing spread
Rent change on new/renewed leases vs expiring rent on the same space; the mark-to-market read.
From Course I-5
Level 3 inputs
Fair value inputs that are unobservable (management estimates) — where all property valuations live.
From Course 2
Leverage amplification
Division of asset-value moves by the equity share (1 − debt/GBV); converts portfolio risk into unitholder risk.
From Course I-4
Liability stack
The full inventory of a REIT's debt instruments ranked by priority of claim: insured and conventional mortgages, unsecured debentures, credit facilities, construction loans.
From Course A-1
Loss-to-lease
Gap between in-place rents and market rents across a portfolio; stored future growth (or, if negative, stored pain).
From Course I-5

M

Marginal refinancing rate
The rate on the issuer's next dollar of term debt, evidenced by its most recent prints — not the portfolio's weighted average.
From Course A-1
Market-implied cap rate
The cap rate that reconciles the current unit price to portfolio NOI; the market's verdict on the marks.
From Course I-4
Market-Implied NAV
The valuation backsolved from the live unit price — what the market is actually paying for.
From Course 4
Maturity ladder
The schedule of principal due by year; concentration and rate-gap risk live here.
From Course 6From Course A-1
MD&A
Management's Discussion & Analysis. Unaudited narrative filed with the statements; home of FFO, AFFO, same-property NOI, and the debt ladder.
From Course I-1
Memory row
The multi-year per-unit CAGR — the one comp-table row that records capital-allocation behavior across a cycle.
From Course I-6

N

NI 52-112
Canadian rule governing non-GAAP disclosure: label, define, reconcile, no undue prominence, consistency across periods.
From Course I-1
NOI
Net operating income: rental revenue minus property-level operating expenses. The cleanest measure of what the buildings earn.
From Course 2
Non-GAAP measure / NI 52-112
FFO/AFFO aren't IFRS-defined; securities rules require labelling and reconciliation to net income in the MD&A.
From Course 3
Normalization adjustment
Issuer add-back for claimed one-time items; defensible only if it doesn't recur.
From Course I-2
Normalization pass
Restating every input — earnings, units, valuation basis, leverage — to common definitions (one NAV variant, one AFFO recipe) before comparison.
From Course I-6

O

Other income
The rental-income component; taxed at your full marginal rate, no dividend tax credit.
From Course 5

P

P/FFO, FFO yield
Price ÷ FFO per unit, and its inverse — the REIT world's P/E and earnings yield.
From Course 3
P/NAV
Price ÷ NAV. Premium >1.0×, discount <1.0×. Always ask which NAV is the denominator.
From Course 4
Payout ratio
Distributions ÷ FFO or AFFO. AFFO payout is the stricter, more meaningful test.
From Course 3
Prepaid CMHC premium
The capitalized insurance premium, netted against mortgages payable and amortized through interest expense over the mortgage's amortization period.
From Course A-1
Proportionate share basis
Non-GAAP presentation adding the REIT's share of equity-accounted JV assets and debt — where off-balance-sheet construction loans surface.
From Course A-1
Puttable exemption (IAS 32.16A–B)
Narrow carve-out keeping the most subordinate class of the reporting entity in equity; the reason trust units are equity and subsidiary-LP units are not.
From Course I-3

R

Real Estate NAV
Independently rebuilt NAV using market cap rates per market × sector cell. Comparable across the universe.
From Course 4From Course I-4
REALPAC
Industry association whose white paper standardizes Canadian FFO/AFFO definitions under IFRS.
From Course 3
REALPAC White Paper
Industry-standard definitions of FFO and AFFO for IFRS reporters (current version January 2022); the benchmark against which issuer definitions are graded.
From Course I-2
Reconciliation
The line-by-line bridge from an IFRS measure (net income) to a non-GAAP measure (FFO/AFFO). Your primary quality screen.
From Course I-1
Refinancing erosion
The scheduled FFO cost of rolling below-market debt: principal × (marginal − in-place rate), cumulating year by year.
From Course A-1
REIT
A trust that owns income-producing real estate and qualifies for the REIT exception, making it effectively non-taxable on distributed income.
From Course 1
REIT exception
The s.122.1 tests (property, revenue, equity-value, listing) a trust must pass to stay flow-through.
From Course 1
Reported NAV
NAV as published by the issuer under its IFRS fair-value marks. Consistent within an issuer; not comparable across issuers.
From Course 4
Reported NAV roll-forward
Reported NAV(t) + retained FFO − non-mark FFO add-backs (transaction costs, deferred tax) + development value creation ± property cap-rate marks ± non-property (FVTPL/OCI) marks — the bridge from the FFO forecast to the Reported NAV forecast (per-unit at a constant unit count; roll total equity through sources and uses once units change).
From Course A-2
Reserve-based capex
AFFO deduction using a normalized allowance rather than actual spend; smooth, but only as honest as the reserve level.
From Course I-2
Residual
What remains of a valuation gap after artifacts and structure are removed — the only part worth arguing about.
From Course I-6
Retained FFO
FFO less distributions declared — the manufactured, forecastable term of Reported NAV growth. Not retained AFFO: AFFO's sustaining-capex and straight-line-rent deductions are cash-timing/non-cash items that don't reduce IFRS equity, so retained AFFO is the cash figure the funding equation uses, not the equity-growth term.
From Course A-2
Retention
Percentage of expiring GLA renewed; high retention avoids downtime, TI, and commissions.
From Course I-5
Return of capital (ROC)
The excess-over-taxable-income component; untaxed now, reduces your ACB, resurfaces later as capital gain.
From Course 5

S

Same-asset (same-property) pool
Properties owned and operated across both comparison periods; the issuer-defined perimeter of organic growth (I-5), and the model's first block.
From Course A-2
Same-property NOI (SPNOI)
NOI from assets owned and operating throughout both comparison periods; the organic-growth measure. Non-GAAP — the pool is issuer-defined.
From Course I-5
Same-property pool
The set of assets inside the SPNOI calculation; its coverage of total NOI and its stability across periods are quality tests.
From Course I-5
Scenario layer / module
A switchable block modelling a discrete event (the FCR transaction) kept out of the base case until terms are real.
From Course A-2
Secured vs. unsecured debt
Mortgages on specific properties vs. debentures against the whole entity; unsecured-heavy = more flexibility, needs investment-grade access.
From Course 6
SEDAR+
The CSA's public filing system for Canadian issuers; successor to SEDAR (2023). All required disclosure lives here, free.
From Course I-1
Sensitivity table
Required disclosure of fair value response to input changes; convertible into Reported NAV-per-unit risk with the leverage adjustment.
From Course I-4
SIFT rules
2006 rules taxing publicly traded trusts at corporate-like rates; the reason non-REIT income trusts disappeared.
From Course 1
Special distribution
One-time (often non-cash) year-end distribution pushing out excess taxable income; taxable despite no cash arriving.
From Course 5
Special voting unit
Non-economic voting shell paired with exchangeables; excluded from all per-unit math.
From Course I-3
Straight-line rent
IFRS levelling of contractual rent escalations; reversed in AFFO to reflect cash rent.
From Course 3From Course I-2
Structural discount
Persistent, rational valuation charge for concentration, control, leverage, or liquidity — to be sized, not "discovered" as mispricing.
From Course I-6
Subsequent events note
Disclosure of material events after the balance sheet date but before filing. The freshest information in the package.
From Course I-1
Supplemental package
Voluntary, unregulated investor package on the issuer's website; property-level detail with no prescribed standards.
From Course I-1
Sustaining capex
Capex that maintains existing income (vs. value-add/development capex). Management-classified — scrutinize it.
From Course 3From Course I-2

T

T3 slip
The tax slip trusts issue (vs. T5 for dividends), showing the character breakdown of the year's distributions.
From Course 5
Terminal cap rate
Cap rate applied to exit-year NOI in a DCF; typically set above today's cap rate to reflect asset aging.
From Course I-4
Transactions NOI
NOI from assets outside the same-asset pool — acquisitions, dispositions, developments; the issuer's own disclosure of the model's second block.
From Course A-2
Trust indenture
The contract governing a debenture series; the primary source for covenant definitions and levels — filed on SEDAR+.
From Course A-1
Trust unit
The REIT's publicly traded residual claim; equity via IAS 32's puttable exemption.
From Course I-3
Turnover spread
Apartments: rent change achieved on suites that turned over; with turnover rate, the engine of rent-controlled-market growth.
From Course I-5

U

Unencumbered asset pool
Assets not pledged to any secured lender; the unsecured borrower's implicit collateral, crisis borrowing capacity, and covenant input.
From Course A-1
Unencumbered assets
Properties not pledged as mortgage collateral; flexibility reserve and the backing for unsecured debentures.
From Course 6
Unit / unitholder
The trust equivalent of a share/shareholder. TSX REIT tickers end in .UN.
From Course 1

W

WALT
Weighted-average lease term; the duration of the income stream and the speed of its repricing.
From Course I-5
Weighted-average interest rate / term
The blended cost and remaining life of in-place debt; compare the rate to today's market to see refinancing drag coming.
From Course 6
Weighted-average units
Time-weighted count over the period, used for flow measures (FFO/unit); period-end count is used for stock measures (Reported NAV/unit).
From Course I-3

Y

Yield-on-cost spread
Development yield minus the market cap rate; the source of manufactured Reported NAV (7.4% into 6.04%, FY2025).
From Course A-2