Straightlining - REITs straightline rents because generally accepted accounting principles, or GAAP, require it. Typically, a tenant's monthly rent will increase over the life of a lease; this applies to commercial properties, not usually residential properties. Straightlining averages the tenant's rent payments over the Lease's life. In other words, rental revenues are overestimated in the early years and underestimated in the later years.

REITs straightline rents because
generally accepted accounting principles
require it. What is straightlining?
Typically, a tenant’s monthly rent will
increase over the life of a lease.
Straightlining averages the tenant’s rent
payments over the lease’s life. In other
words, rental revenues are overestimated
in the early years and underestimated
in the later years. By adjusting FFO
for straightlining, the analyst is able to
get a better handle on a REIT’s actual
annual cash flow from operations.