MRP
Millrose Properties, Inc.
$28.33
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 42.9% below fair value
You pay
$28.33
Bear
$41.89
Fair
$49.59
Bull
$57.28
Bear
$41.89
+47.9%
$2.46 FFO × 16x
Fair
$49.59
+75.0%
$2.46 FFO × 19x
Bull
$57.28
+102.2%
$2.46 FFO × 22x
Key Value Driver
FFO/share ($2.46) × residential P/FFO multiple
Implied Market Multiple
11.5x
Summary
At $2.46 FFO/share with a 19x residential REIT multiple, the base-case value is $49.59 per share. Dividend yield: 10.6%. DDM cross-check: $56.10.
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 10.6% 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