Built on 15 years managing institutional real estate capital. Every metric, every framework, every output exists because the industry-standard alternatives are insufficient for defensible investment decisions and dealer placement documentation.
Every REIT in coverage — public or private, apartment or net lease — runs through the identical four-stage pipeline. The framework is proprietary, built on 15 years of institutional real estate investment experience managing over $10 billion in assets with significant REIT exposure. Consistency is the product.
Multi-year Annual Information Forms, MD&As, audited financial statements, supplemental packages, and investor presentations are extracted and structured into our proprietary normalized schema. The schema captures 200+ data points per filing year spanning income statement, balance sheet, cash flow statement, AFFO reconciliation, NAV calculation, debt schedule, and capital allocation history. Where GAAP differences exist between IFRS and US GAAP, adjustments are applied systematically — enabling apples-to-apples benchmarking against U.S. REITs.
Every year of earnings call transcripts is analyzed longitudinally — not just what management said, but how their narrative changed over time. We track specific commitments with dates and outcomes: strategic targets met, missed, or quietly dropped. Guidance accuracy is scored by topic (operational, capital allocation, leverage, development). The synthesis maps management’s strategic posture through distinct eras, identifies inflection points, and produces numbered forensic findings that are then tested against the quantitative model in Stage 3. A management team’s credibility is not a vibe — it is a measurable pattern.
Extracted data flows into a fully formula-driven Excel pro forma with up to 14 periods of history and forward projections. Every projected value traces to a toggleable assumption — no hardcoded outputs. The model computes RF-AFFO, CFS-FCF, three-tier capex comparison, multi-tier implied cap rates, distribution coverage, and the full amplification analysis. The amplification framework — our proprietary counterfactual test — compares the investor’s actual return against two alternative scenarios: what they would have earned if management maintained leverage but made no external capital decisions, and what they would have earned with maximum deleveraging. The gap is classified by materiality and becomes the analytical backbone of the assessment. The narrative synthesis from Stage 2 provides hypotheses that are tested against the model’s quantitative outputs — management’s claims are verified or contradicted with specific data.
The forensic analysis from Stage 3 drives a two-pass memo generation process. Pass 1 produces the data dashboard: charts, tables, hero metrics, and the amplification verdict summary — all drawn from the model’s pre-computed outputs. Pass 2 produces the narrative article body: a long-form investment memo that answers three questions for every REIT — has management created or destroyed per-unit value, where was value gained or lost, and what does the return profile look like from here. The memo’s tone, title, and framing are calibrated to the materiality of the findings. For private REITs, the memo includes KYP-specific sections structured for NI 31-103 and Client Focused Reforms compliance documentation.
Click each metric to expand the methodology and understand why industry-standard alternatives fall short.
Reported AFFO is a non-GAAP measure with no standardized definition. Management teams routinely capitalize leasing costs, exclude maintenance capex deemed “non-recurring,” add back stock-based compensation, and smooth distributions over multi-year periods — all of which inflate the headline number. The delta between reported AFFO and RF-AFFO is a direct measure of earnings quality.
The maintenance capex rate used in RF-AFFO is calibrated from three independent institutional sources — Green Street Advisors, Chilton Capital Management, and NAREIT — then validated against what management has actually spent on their buildings over the full observation period. The rationale: actual historical capex is the money it cost to generate the same-store NOI growth the company reports. If a REIT spent 12% of NOI on its existing properties and grew same-store NOI at 3%, that spending level is the empirical cost of maintaining competitive performance. We present all three tiers — management’s own classification, the institutional benchmark, and total audited cash flow statement capex — so the reader can see the full range and form their own view.
CFS-FCF is pulled directly from the cash flow statement with no management adjustments. It captures the true cash-generating ability of the portfolio before distributions, financing, and accounting elections. Many REITs show positive reported AFFO while running persistently negative CFS-FCF — meaning they are liquidating equity to pay distributions.
We track the 3-year rolling average alongside the single-year figure, because REITs can manage capex timing to manufacture a good year. A negative 3-year CFS-FCF average alongside a yielding distribution is one of the clearest forensic red flags in the dataset.
The amplification analysis answers the most fundamental capital allocation question: did management’s decisions — every acquisition, equity raise, disposition, and buyback — make the investor richer or poorer on a per-unit basis? We build a counterfactual: what would the investor have earned if management had simply run the existing portfolio at the same leverage ratio without any external capital activity? The gap between the counterfactual return and the actual return is the precise cost — or benefit — of management’s capital allocation decisions over the full cycle.
The framework produces a three-way verdict table comparing three paths: (1) full deleveraging (all free cash flow to debt, zero distributions), (2) maintain starting leverage with no external growth, and (3) the actual path management took. Each path shows full-cycle IRR, per-unit earnings growth, ending NAV per unit, and ending leverage. The gap is classified by materiality — from IMMATERIAL (normal business friction, sub-100 basis points) through NOTABLE, MATERIAL, and SEVERE — with the entity’s sector and return type determining the thresholds.
REITs report a single cap rate figure in their investor materials, typically derived from management's own NAV calculation using self-selected IFRS fair value inputs. We triangulate across three tiers: (1) the cap rate implied by IFRS carrying values divided by current NOI, (2) the cap rate implied by management's stated NAV, and (3) recent transaction comparables in the same submarket and asset class.
When the three tiers diverge materially — particularly when IFRS fair values imply a cap rate meaningfully below recent transactions — that is a balance sheet inflation signal. It means the property portfolio may be worth less on a mark-to-market basis than the audited financials suggest, with direct implications for LTV ratios and distribution sustainability.
The triage framework reconstructs every step between reported NOI and reported AFFO, isolating where value is lost — or manufactured — at each reconciliation stage. Strong NOI with weak AFFO suggests high interest burden or capital intensity. Weak NOI with strong AFFO suggests aggressive management adjustments. Knowing where the value leak occurs directs further diligence.
We benchmark every Canadian REIT against best-in-class U.S. REITs — not as aspirational targets, but as operational and disclosure standards. This is the two-benchmark methodology.
Client Focused Reforms under NI 31-103 require dealers to have a reasonable basis for believing a product is suitable for any client before recommending it. Our deliverables are designed to satisfy that obligation — and to survive scrutiny.
A sample of the data captured in the normalized extraction schema — designed to be portable across REIT types, sectors, and accounting standards.
| Category | Data Point | Source | IFRS / GAAP |
|---|---|---|---|
| Operating | Revenue, NOI, Same-property NOI growth | Income Statement / MD&A | Both |
| Operating | Occupancy rate (weighted avg), average rent / sq ft | Supplemental / MD&A | Both |
| AFFO Reconciliation | FFO → AFFO bridge, maintenance vs. growth capex | AFFO Schedule | Both |
| Forensic | RF-AFFO (computed), CFS-FCF (computed) | Computed from CFS + AFFO | Both |
| Balance Sheet | Investment properties (IFRS fair value), debt schedule | Balance Sheet / Notes | IFRS |
| Capital Allocation | Acquisitions, dispositions, development spend, equity issuances | CFS / MD&A | Both |
| NAV | Management NAV per unit, implied cap rate | Investor Supplement | Both |
| Leverage | LTV, Debt/EBITDA, interest coverage, debt maturity schedule | MD&A / Notes | Both |
| Distribution | DPU (declared vs. paid), coverage ratio, DRIP participation | MD&A / Press Release | Both |
| Governance | Mgmt fee structure, related-party transactions, insider ownership | AIF / Proxy / Notes | Both |
We've mapped every due diligence criterion from CIRO's Client Focused Reforms, the AIMA/SBAI institutional standard, and Kitces/SEC advisor guidance against our forensic platform. Thirteen of fifteen criteria are fully covered at institutional depth.
View Full MappingSee the full methodology applied to a real REIT. We'll send you a complete forensic memo — including the Excel model — for one REIT of your choice.
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