FBRT
Franklin BSP Realty Trust, Inc.
$7.75
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 68.6% below fair value
You pay
$7.75
Bear
$20.48
Fair
$24.67
Bull
$28.86
Bear
$20.48
+164.3%
$1.19 FFO × 18x
Fair
$24.67
+218.3%
$1.19 FFO × 22x
Bull
$28.86
+272.4%
$1.19 FFO × 26x
Key Value Driver
FFO/share ($1.19) × default P/FFO multiple
Implied Market Multiple
6.5x
Summary
At $1.19 FFO/share with a 22x default REIT multiple, the base-case value is $24.67 per share. Dividend yield: 14.3%. DDM cross-check: $20.69.
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 14.3% 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