FFO
Frequently Asked Questions about FFO (Funds From Operations)
What does FFO stand for in commercial real estate?
FFO stands for Funds From Operations. It is a key performance metric used primarily by real estate investment trusts (REITs) to measure operating performance.
What is the purpose of calculating FFO?
FFO is used to assess the cash-generating ability of a real estate portfolio by excluding depreciation and gains/losses from property sales, offering a clearer picture of core operational performance.
How does FFO differ from Net Income in real estate?
Unlike Net Income, FFO adds back non-cash expenses like depreciation and removes gains from asset sales, making it more reflective of recurring real estate operations.
Where can I learn more about FFO and related terms?
You can refer to the related glossary entries such as “Funds from Operations,” “Fondos Ajustados de Operaciones,” and “Fondos de Operaciones” for more detailed information.
Is FFO the same as cash flow?
No, FFO is not the same as cash flow. While both assess performance, FFO adjusts net income for depreciation and other non-cash items, whereas cash flow includes all cash inflows and outflows.
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