Net Asset Value, or NAV, is a metric used across different types of investments, including mutual funds, exchange-traded funds, and private real estate funds. In the context of private real estate, NAV is the total value of a property or portfolio of properties after deducting any liabilities or obligations.
Mathematically, NAV can be calculated as follows:
NAV = Total Market Value of the Real Estate Assets – Total Liabilities
The total market value of the real estate assets includes the current market value of all properties owned by the fund. The total liabilities include any debt obligations, such as mortgages or loans, unpaid taxes, and other liabilities tied to the properties.