cranyinnyc

iStar Financial - On the Shelf

Patrick C
you are correct to say taxable income and not gaap income is the relevant measure for REITS because that is the measure that they are required to pay at least 90% in the form of dividends to keep their REIT status but and this is an important but over time those 'non-cash' items that GAAP expenses faster than taxable income or analyst or mgmt waive away in their FFO calculations are important. If dividends are greater than GAAP earnings for a meaningful period either the company is 'self-liquidating' or it has to raise fresh equity. So in the end it is importanat for a REIT's dividend to be 'earned' even in GAAP terms