At 30 June 2026, each 360 Capital REIT security carried net tangible Assets of 58 cents but closed on the ASX at 41 cents. Across the Pacific, US Masters Residential was turning New York-area houses into cash and handing most of it back to holders.

Those two facts explain why asset values sit at the centre of both stories. For 360 Capital REIT (ASX:TOT), valuations determine the gap between Book Value and Market Price in a fund that intends to keep its buildings. For US Masters Residential Property Group (ASX:URF), they largely determine what holders receive as the portfolio is sold. Both sit well outside the S&P/ASX 200: Market Index ranks TOT 1,073rd and URF 1,130th among 2,345 ASX securities.

Two property funds heading in opposite directions

360 Capital REIT is two stapled trusts, 360 Capital Passive REIT and 360 Capital Active REIT, with 360 Capital FM Limited as Responsible Entity and 360 Capital Group as manager. Its FY26 results presentation, released on 12 August 2026, shows three office and industrial properties valued at A$202.4 million, fully occupied, with a weighted average Lease expiry (WALE, the average remaining lease term weighted by income) of 6.0 years.

US Masters Residential is also stapled, combining US Masters Residential Property Fund and US Masters Residential Property Fund II, with US Masters Responsible Entity Limited as responsible entity. Its Q2 2026 Investment update says the group began winding down in 2023 and is aiming to finish by the end of calendar 2026, subject to market conditions.

How 360 Capital REIT earns its distributions

The REIT collects rent. Its largest holding is a 50 per cent share of 510 Church Street in Cremorne, Melbourne, valued at A$101.8 million, where tenants include the Commonwealth Government's NDIA, Dentsu and Monash IVF. It also owns 38 Sydney Avenue in Forrest, Canberra (A$68.6 million), mainly leased to the Australian National Audit Office, and 34 Southgate Avenue at Cannon Hill in Brisbane (A$32.0 million), fully leased to Michael Hill International.

The presentation reports FY26 statutory net profit of A$6.3 million and operating profit of A$6.9 million, or 3.2 cents per security. Distributions totalled 3.0 cents. Management has guided to 3.6 cents for FY27, and the distribution notice of 23 September 2026 set an estimated 0.9 cents for the September quarter, payable on 27 October.

The REIT has also started allocating capital to structured equity, with A$10.9 million in a North Sydney preference Equity position paying a 16 per cent coupon. Management says up to a quarter of the Balance Sheet may be used this way.

Why Leverage makes TOT's asset values bite

NTA per security was unchanged at 58 cents, with valuations up only A$1.4 million over the year. The presentation calculates the discount to NTA as 29.3 per cent using the 41-cent closing price on 30 June, and we reach the same result: 1 minus 0.41 divided by 0.58.

By our calculation, the property portfolio equals about 93 cents per security (A$202.4 million divided by 218.6 million securities), well above the 58-cent NTA because the REIT had A$84.0 million drawn on its Debt facility. Gearing, a measure of debt relative to assets, was 38.9 per cent.

That leverage amplifies valuation moves. A 5 per cent change in property values would equal roughly 4.6 cents per security, or about 8 per cent of NTA. The Facility has been extended to August 2031, and Interest Cover of 2.6 times sits above the 1.5 times covenant.

How US Masters Residential turns valuations into cash

US Masters Residential owns freestanding and multi-tenant homes in the New York metropolitan area. At 30 June 2026, 74 properties remained, of which 59 were under contract, 12 were on the market and 3 were in pre-listing, with a net realisable value of US$70.5 million.

In the first half of 2026 the group closed US$105.7 million of sales across 87 properties. It repaid its Global Atlantic facility in full from July proceeds and distributed 14 cents per security in the half, followed by a further 4 cents paid in August. Administrative functions formerly supplied by K2 Asset Management were internalised in June to cut costs.

The monthly NAV update dated 14 September reported net asset value (NAV, assets minus liabilities) of 12.7 cents per security at 31 August, down from 17.6 cents at 30 June. Year-to-date sales had reached 118 assets for US$140.61 million.

Reading the fall in URF's NAV

The NAV drop is not simply a loss of value. The 4-cent August distribution returned cash directly to holders and accounts for most of the 4.9-cent decline. The remainder reflects other movements, including exchange rates: the fund used AUD:USD of 0.6869 at 30 June, while the weekly NAV estimate of 23 September used 0.7126. A stronger Australian dollar lowers the A$ value of US-dollar assets.

By our arithmetic, the US$70.5 million remaining at 30 June equalled about 10.2 US cents per security. Because the facility has been repaid, sale prices and currency now flow almost directly into what is left for distribution, without debt magnifying them.

Where the comparison stops working

The funds report on different calendars. 360 Capital REIT's year ends on 30 June, while US Masters Residential reports half-years to 30 June and full years to 31 December. The REIT reports NTA, while US Masters Residential reports NAV using net realisable values that reflect contracted sale prices.

Their purposes also differ. A discount to NTA at the REIT may persist for years if the market doubts valuations or earnings, whereas US Masters Residential's NAV should narrow towards zero as the portfolio is sold down.

Risks and indicators to follow

For the REIT, the watch points are whether operating Earnings support the 3.6-cent guidance, office valuations in Melbourne and Canberra, and the performance of its structured equity investments, which carry higher risk than direct property. Gearing is forecast to fall to 33.9 per cent by June 2027.

For US Masters Residential, the Q2 update flags municipal delays in New York and New Jersey, particularly for the three pre-listing properties. Management says it is reasonably confident all or substantially all sales will close during 2026, but warned of slower late-summer activity and a possible small stub of unsold assets at year-end. Monthly NAV updates, further distributions and currency moves remain the practical indicators.