NAV and P/FFO can point to different conclusions on the same REIT. Why, and which do you trust?

They measure different things: NAV is a private-market ASSET value - what the buildings would fetch net of debt - while P/FFO capitalizes an EARNINGS stream that reflects leverage, G&A, and the platform. They diverge when

• leverage differs from peers - FFO is post-interest, NAV handles debt at face
• corporate overhead is heavy - G&A drags FFO but is often ignored in NAV
• growth differs - FFO multiples reward growth that hasn't yet shown up in asset values
• private and public markets disagree on cap rates. Which to trust depends on the question: NAV anchors M&A and liquidation value, while FFO/AFFO multiples better capture the going-concern earnings power. Best practice is triangulating both and explaining the gap rather than picking one blindly.