FBRT
Franklin BSP Realty Trust, Inc.
$8.47
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 67.9% below fair value
You pay
$8.47
Bear
$21.72
Fair
$26.38
Bull
$31.03
Bear
$21.72
+156.5%
$1.19 FFO × 18x
Fair
$26.38
+211.4%
$1.19 FFO × 22x
Bull
$31.03
+266.4%
$1.19 FFO × 26x
Key Value Driver
FFO/share ($1.19) × default P/FFO multiple
Implied Market Multiple
7.1x
Summary
At $1.19 FFO/share with a 22x default REIT multiple, the base-case value is $26.38 per share. Dividend yield: 14.9%. DDM cross-check: $23.57.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 14.9% is unusually high — make sure the company generates enough cash to keep paying it.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify