Real Estate Investment Banking Int.
Hi!
I hope you all will answer (please)
Anyway, I am having an interview for GS Investment Banking-Real Estate Financing group and I was hoping that someone on this board can help me out. I am going to the final round and I have no idea what to expect.
I am currently a real estate development major (undergrad) and I don't know much about CMBS (I just started this major people) but I am really interested in the securities side of real estate. So if some one can give me some resources that I can use to look up terms to know and concepts within the Real Estate Investment Banking realm, I would be appreciative =)
Congratulations on scoring the interview. Goldman is a good shop and is expanding their CMBS business tremendously.
I would say knowing how to read an asset's operating statements is important. From top line rental revenue to bottom line underwritten cash flows.
Then know your loan metrics like loan-to-value (LTV), debt service coverage ratio (DSCR), and debt yield (DY).
That should be a good start.
For posterity
Thanks, I am really excited to interview. I'm surprised I got to the final round a lil bit without knowing all the specifics.
And Oh ok. I know how to do some of that, but do you know of resources I could use? I feel like knowing the traditional investment banking questions are helpful, but not all that related to real estate financing...
Smithcof, I am not sure about to be honest with you; I learned most of it as an analyst at RE developer. From what I understand, Breaking Into Wall Street has a pretty good real estate course, but I would say that course is more directed to the REIT and the investment banking part of it.
I know someone who took a different route--- IS Analyst/Associate (major player in major market) to GS CMBS originations/Asset Management (3 months or so ago). He had a good base for the financials behind individual real estate assets--which translated (from a terminology and conceptual basis) into underwriting portfolios/groups of assets for securitization. He had a ton of exposure to the debt market as when he created BOVs, Proposals, OM's, he'd make debt assumption that he pulled from debt brokers and BB connections (institutional clients who they have sold to before and therefore could tap for debt assumptions). He is doing well thus far but of course it is an adjustment--its pivoting from equity to debt analysis, really--lots of the same terms/concepts but not the same animal.
Anyone else see this kind of move made?
Is this for GS REFG Group in LA?
It's like a future investment which gives a return for the long term. Real estate investment is better than making a fixed deposit. You can improve business resources this way. Real estate investment is the best option not only in the USA but all over the world. If you want to do some investment in the USA then you can go to “Investmentbank” real-estate for more information.
technical questions RE IB interview (Originally Posted: 09/22/2010)
Guys, I have a phone interview coming up in a few days with a director at a top BB firm in the real estate investment banking division. The position is third year analyst. I generally do well in interviews (with the non-technical stuff), and am assuming this is going to be more of a fit / meet and greet before they ask me into their offices (granted, that's a plane ride away), but I am worried they may hit me with some tough technical questions and catch me off guard.
I've worked 2 years in RE PE and have good DCF modeling skills, but I really don't know much about any other kind of modeling aside from DCF's (for analyzing project level investments) and comps/precedent transactions models (for valuing RE and Land). While I have high scores, grades, went to ivy league etc, I have a serious weakness: I know very little in the way of accounting. If you asked me to model an LBO of a hotel chain or something, I wouldn't know where to begin.
Are there any accounting questions I should expect/be prepared for? Do I need to know about LBO modeling?
Thanks
he's probably going to ask you a lot about your current job. know your shit. i would also try to find how RE IB is different from other industry types, because I know a lot of things are different. Know potential clients, know where RE is going/outlook on RE market, industry, etc.
potential clients is interesting, I guess i should look into that a bit more. What I'm looking for, however, is more specific technical stuff. I know a lot about market outlook, the industry, etc... it's what I do.
if its not a pe job, i wont expect lbo questions. and in case he does ask to about LBO, say exactly this and not more
" I have not done LBO modeling before, but I'm sure I can pick it up easily ".
this will be enough IF he knows that u know DCF (which means u know ur way around excel). Dont sweat it...u'r fine.
re: accounting...try to read some accounting 101...for example, what happens to XYZ in balance sheet is ABC in income statement goes up.
good luck
Maybe you should brush up on FFO and AFFO if all you have been doing is DCF. Even for a corporate RE entity you still value it based on the properties. So the LBO is just a highly levered portfolio deal with a bunch of layers of debt.
Hotels are not that difficult. They are either operated under a sale and leaseback or a management agreement. In the former it become the same as valuing the real estate like any other building. NOI usually have fixed or inflation linked uplifts. In the latter, you build up the P&L, so Room Rev + Food&Bev + anything else that you make money from. Costs are Energy, Repairs and Maintenance, Sales and Marketing, and a few other line items. Once you have your EBITDA, subtract FF&E and base and incentive fees and then apply the multiple you want to value it at. One thing I should mention is that there is always a debate on exactly how to count FF&E, but you wont get that question in an interview.
Last thing I would suggest is learning about CMBS and other RE debt because many mandates right now deal with debt restructuring. A lot of banks have been playing the extend and pretend game, but at some point that shit needs to be worked out. In CMBS you can't just extend and pretend so all those problems will be coming to a head over the next 2-3 years.
thanks a lot both of you guys. This is really helpful.
REIB interview tuesday, any pointers? (Originally Posted: 10/20/2013)
any lingo I should for-sure know? I'm currently reading up & it's clear that I don't know as much as I should about this specific part of IB, but i'm having trouble finding good info about it on WSO,M&I, etc. any feedback would be appreciated.
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Interested in this as well.
REIB interview help (Originally Posted: 02/04/2014)
I have a REIB interview thursday and need some help. Most of my experience has not been in the RE space and wanted to get some input on specific metrics and RE-related questions I should expect. Thanks in advance.
What group is this with?
group / bank type would be helpful.
is this for experienced hire? or undergrad? MBA?
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