The Goal
Survive 15 years without the board firing you.
How It Works
Issue debt → buy properties that yield more than the debt costs → survive negative events with what's left.
Each Quarter
Press Advance Quarter. Retained Cash is what's left after all expenses — keep it positive and you're growing.
The Tabs
- 💰 Capital Actions — borrow money, issue shares, set your dividend
- Property Market — buy buildings (higher cap rate = more income, but riskier)
- Portfolio — the properties you own
- Debt — your loans; retire them early here
- Staff — hire a CFO and others to unlock abilities
The Board
Five directors vote on you each year. Chairman Williams wants a rising dividend above all. Keep enough of them happy to survive the vote. Good results earn political capital you can spend in board fights or tough events.
NOINet Operating Income — rental revenue minus operating expenses. Does not include interest, G&A, or depreciation.
GPRGross Potential Rent — what you'd collect if every property was 100% occupied.
Cap RateCapitalization Rate — NOI divided by property value. Rising cap rates compress values; falling cap rates inflate them.
TrancheOne individual debt issuance with its own amount, interest rate, and maturity date. You can have up to 10 tranches.
MaturityWhen a debt tranche comes due and must be repaid or refinanced. Clustering maturities creates refinancing risk.
SpreadThe extra interest you pay above the base rate, based on your credit rating. BBB = +1.6%, CCC = +6.0%.
LTVLoan-to-Value — same as debt/assets in this game. Standard real estate leverage measure.
OccupancyPercentage of leasable space that is currently leased and paying rent. 100% is impossible to sustain; 90%+ is healthy.
G&AGeneral & Administrative expense — head office costs. Grows with portfolio size.
DepreciationNon-cash accounting charge that reduces net income but not cash flow. This is why net income is misleading for REITs.
FFOFunds From Operations — adds depreciation back to net income to show true cash earnings.
AFFOAdjusted FFO — subtracts normalized maintenance capex from FFO for a more conservative cash flow view.
Why REITs Use FFO, Not Net Income
Depreciation is a massive non-cash charge. A building might depreciate $5M on paper this quarter while actually appreciating in value. Net income subtracts this, making it look terrible. FFO adds it back to show actual cash generation. This is directly tested in CFA Level 1 and 2.
Cap Rate Mathematics
Property Value = NOI ÷ Cap Rate. If your property generates $5M NOI and the market cap rate is 5%, it's worth $100M. If the Fed hikes rates and cap rates rise to 6%, that same property is now worth only $83M — a $17M loss with no change in your tenants or income. This is the core valuation risk in REIT investing.
The Dividend Commitment
REITs must distribute 90% of taxable income as dividends by law. This means they cannot retain earnings to fund growth — they must constantly access capital markets (debt or equity) to acquire properties. This is why leverage and capital markets access are existential for REITs, not optional tools.
The Credit Spread Cycle
More debt → higher debt/assets → lower credit rating → wider spread → higher interest cost → lower coverage ratio → lower credit rating → wider spread... This is the leverage spiral that destroys REITs in downturns. Maintaining investment grade (BBB or above) is critical because many institutional investors cannot hold sub-investment grade debt.
NAV Premium vs Discount
If your share price is above NAV per share, you trade at a premium — issuing equity raises cash above asset value, which is accretive. If you trade at a discount to NAV, issuing equity destroys value. This dynamic drives REIT capital allocation decisions and is a CFA Level 2 topic.
Dividend Signaling
In this game, cutting the dividend immediately drops your share price significantly. This mirrors real markets — a dividend cut signals management distress and loss of confidence in cash flows. The share price reaction is often larger than the mathematical impact of the cut itself, because it changes investor expectations.
