Funds Available For Distribution - FAD


DEFINITION of 'Funds Available For Distribution - FAD'

An informal measure of the amount of capital that is on hand for paying out to shareholders. Funds available for distribution is a term that pertains to a real estate investment trust (REIT). REITs are shares offered to the public by a real estate company or trust that holds a portfolio of income-producing properties and/or mortgages. Most of a REIT's profits must be distributed as dividends. There is no standardized method for calculating funds available for distribution, however many calculate FAD by adjusting the funds from operations value for straight-line rents, leases and any recurring real estate related expenses.

BREAKING DOWN 'Funds Available For Distribution - FAD'

The funds available for distribution value represents a measurement of a REIT's cash flow for shareholders and investors. The FAD is a metric used in evaluating the current and future health of a REIT. Other widely used metrics include adjusted funds from operations (AFFO) and cash available for distribution (CAD).

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  3. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  4. How do dividends affect the balance sheet?

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  5. Are dividends considered an expense?

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    The only account recorded on the balance sheet, when dividends are declared and before they are paid out to a company's shareholders, ... Read Full Answer >>

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