In this paper, we analyze whether an investment strategy which is based on the net asset value (NAV) spreads of real estate stocks yields positive excess returns. For a global sample of 542 real estate stocks over the 2000 to 2012 period, we find that a portfolio which is long in the quintile of real estate stocks trading at the highest discount to NAV and short in the quintile of stocks trading at the highest premiums (or lowest discounts) yields annualized returns of 9.72%. Estimated annualized alphas from this strategy are between 3.1% and 6.9%. However, the high-discount portfolio is also much riskier than the low-discount portfolio. Furthermore, robustness checks suggest that the exploitability of this investment strategy has diminished over the recent years.