What exactly is RE D/E Placement?
Can somebody explain what real estate debt placement is and how it differs from equity placement?
What would analyst role look like in this group?
Thank you!
Trending Content
Career Resources
WSO Free Modeling Series - Now Open Through
May 31, 2024
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
Haven’t actually worked on this side, and I’m a measly college kid, but I’ve done a couple internships in lending so I’m somewhat familiar with how that process works. A sponsor will hire a debt broker to go raise debt capital for an acquisition or refi, and give them some terms they are ideally looking for (leverage point, amortization, term, spread, etc) and the debt placement folks will go out and market the deal to some mix of mainly life cos, debt funds, CMBS and banks, depending on the deal. Those lenders will then underwrite the deal and send out a quote with the terms they are willing to give. The debt broker will then try to negotiate better terms with the lenders and present the various quotes to the sponsor, who will then pick the debt structure they want. After that it’s basically all DD which I don’t think they’re super involved in (not sure abt this tho), and once the loan closes: boom, commission for the broker.
On the equity side I’m guessing it’s a similar process but raising JV equity instead of debt, so negotiating things like hurdle rates and promote structure. But I’m guessing the deal flow on the equity side is significantly lower than on the debt side since sponsors will typically raise debt on a deal by deal basis, while they may opt to not use JV equity or have a JV in place to make multiple acquisitions. Plus the debt guys get involved in a refi situation, not just acquisitions.
Again I’m just a student, so for the people who have actual experience, feel free to correct me. Hope this is helpful
This is pretty spot on
When you say broker, do you also mean originator?
My understanding of an originator is that they work on the lending side and originate loans on behalf of a lending institution (bank, life co, etc) so no. But if people in the Debt placement world (JLL, Eastdil, etc) who work on behalf of sponsors are also called originators then yes?…
Idk I stopped using a fake ID like a year ago and here I am talking about amortization
Earum et sunt labore dolor minima saepe. Adipisci omnis tempora libero vitae.
Quo qui soluta quis blanditiis ipsa voluptas. Et hic eligendi rerum qui.
Perferendis eos quia omnis quae. Saepe voluptas quaerat explicabo dolorum. Saepe vel officia voluptates quia eligendi harum aliquam. Et velit alias sit fugit quas sapiente. Mollitia est odio quibusdam laudantium dolore. Consequuntur quos et omnis.
Odit possimus reiciendis itaque quam maiores voluptas ad. Qui deserunt est a doloribus ab. Autem soluta corrupti accusamus nisi qui et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...