You are an analyst with a REIT fund, and you have just been asked to take over the valuation models of ten REITs. Your fund house uses a NAV model and a fair value model built from EVA. Your portfolio manager has asked you to investigate the following issues. The market occupancy of your target market has rapidly improved from 85% to 88%. Identify and explain how this affects SSNOI and then your NAV estimates. (4 points) The fair value of your REITs ranges from a 20% discount versus NAV to a 5% premium. Offer two potential reasons why this happens. (2 points) Explain the effects on NAV per share if a REIT issues equity when the stock is trading at a discount to NAV. (2 points) Offer and explain a suggestion on what a REIT can do to reduce the discount between its fair value and NAV. (2 points)