4. NAV for each REIT at year end 2023. In the NAV calculation, assume that NOI is expected to grow at 3% for both REITs over the next year, and use a private market cap of 5.5% for EQR and 5.8% for MAA (these are the private market cap rates used by GreenStreet in their most recent NAV analyses; they are nominal cap rates). In our NAV calculations, you need to include mark-to-market adjustments for the value of longterm debt. Greenstreet estimates an adjustment of -669,832 thousand dollars for EQR and -397,135 thousand dollars for MAA. Briefly explain why we need to account for these adjustments in your answer, and why the adjustments are negative. 5. NAV/share for both REITs at year-end 2023. Using the year-end 2023 share prices from question 2, calculate the NAV premium or discount for both REITs at year-end 2023. 6. Implied cap rates for both REITs at year-end 2023.

Fig: 1