Q1/26: Results In Line; SPNOI Softens But 2026 Outlook Reaffirmed

Research evidence excerpt

Q1/26: Results In Line; SPNOI Softens But 2026 Outlook Reaffirmed

TD Cowen BSR REIT

Global Research May 13, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Real Estate/REITS:

Our REIT valuations generally use two approaches. Most of our target prices are based on a

P/AFFO multiple, with our AFFO forecasts representing estimated recurring free cash flows

after capital expenditures and leasing costs. We incorporate historical and current valuation

multiples of both the company and its peers, as well as our analysis on future growth rate

expectations, company-specific risks, and other inputs from our research when devising the

multiples used to generate our target prices. We also use Net Asset Value (NAV) as a secondary

check, and in some cases as the primary valuation method. Our NAV estimates most often

consist of an applied capitalization rate to estimated forward one year NOI (net operating

income), less debt, but in some cases represent a SOTP valuation.

Investment Risks

Risks to the REIT sector may include: slowing rent growth; higher vacancies; adverse

government legislation; new supply coming on to the market; fluctuations in interest

rates; operating cost pressures; tenant credit risk; local real-estate markets and general

macroeconomic challenges. For companies in our coverage with development projects,

additional risks include: construction delays; cost overruns; and failure to achieve targeted

financial projections.

Risks To The Price Target

BSR is subject to risks common to commercial real-estate investing. Company-specific risks

include regulatory risks, geographic concentration, and the significant influence of the Baily/

Hughes Holders (~19% interest). Other key risks include, but are not limited to, the following: