REIT University

Canadian REIT glossary

Search 47 terms from the Beginner track, 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
AFFO
FFO minus sustaining capex, leasing costs, tenant improvements, and straight-line rent — a proxy for distributable cash.
From Course 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 sensitivity
Small cap-rate changes produce large NAV swings because leverage concentrates the entire GAV change in equity.
From Course 4
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
Covenant / DoT cap
Contractual leverage limits (Declaration of Trust, debenture indentures, bank lines) — usually 60–65% of GBV.
From Course 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
Distribution
Cash paid to unitholders, usually monthly. Not a dividend — different tax treatment (Course 5).
From Course 1From Course 5
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 5

E

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

F

Fair value model
Property remeasured to estimated market value each period; changes flow through profit or loss; no depreciation.
From Course 2
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 3
Fully-exchanged basis
Unit count assuming all exchangeable units convert. The correct denominator for per-unit metrics.
From Course 1
FVTPL
Fair value through profit or loss — how exchangeable units are measured; the source of the price-up-equals-loss effect.
From Course 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
Interest coverage
EBITDA ÷ interest expense. The rate-cycle stress gauge.
From Course 6
Investment property
Property held to earn rent or for capital appreciation — the main asset line on a REIT balance sheet.
From Course 2

L

Level 3 inputs
Fair value inputs that are unobservable (management estimates) — where all property valuations live.
From Course 2

M

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 6

N

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

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

R

Real Estate NAV
Independently rebuilt NAV using market cap rates per market × sector cell. Comparable across the universe.
From Course 4
REALPAC
Industry association whose white paper standardizes Canadian FFO/AFFO definitions under IFRS.
From Course 3
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
Return of capital (ROC)
The excess-over-taxable-income component; untaxed now, reduces your ACB, resurfaces later as capital gain.
From Course 5

S

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
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
Straight-line rent
IFRS levelling of contractual rent escalations; reversed in AFFO to reflect cash rent.
From Course 3
Sustaining capex
Capex that maintains existing income (vs. value-add/development capex). Management-classified — scrutinize it.
From Course 3

T

T3 slip
The tax slip trusts issue (vs. T5 for dividends), showing the character breakdown of the year's distributions.
From Course 5

U

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

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