What is the purpose of REIT performance metrics?

The purpose of REIT performance metrics is primarily to assess the financial health of the REIT. These metrics provide critical insights into the revenue generated from properties, the costs involved in managing those properties, and the overall profitability. They typically include measurements such as funds from operations (FFO), net asset value (NAV), and the occupancy rates of their properties.

Investors and stakeholders rely on these metrics to make informed decisions about investing in or partnering with a REIT. By focusing on financial performance, these metrics help gauge how well a REIT is managing its assets, generating income, and maintaining growth potential, which is essential for long-term sustainability and operational success.

In contrast, while tenant satisfaction, property management standards, and leasing contracts are important aspects of a REIT's operations, they are not the direct focus of performance metrics, which center specifically on financial outcomes and indicators.