Will Excel modeling tests always be for a hotel or apartment?
Hey guys,
I will be taking an Excel modeling test next week for this real estate firm that owns mostly office and retail, with a few hotel and apartment properties as well.
Given that office and retail cash flows are almost always projected using ARGUS, is it safe to assume that my modeling test will be for a hospitality or multifamily asset? Have you heard of a RE firm ever having an Excel test that was for a office or retail property?
FYI, I have already asked this question to the interviewer. He hasn't gotten back to me yet. Thanks guys.
I've seen excel tests for all 5 major asset classes.
Never be surprised by what you could see in an interview
CRE modelling is really easy..it's not accrual modelling it's all cash modeling. All you model is cash received versus cash outflows, including capex, and then the balance is returned to the shareholders. The hardest part is the waterfalls as those get tricky..the capitalized interest for the cosntruction loan is simple too since the lender is paying himself, the amort is not fixed unless it's refinanced. With CRE you only deal with 1 asset so it's relatively simple compared to traditional IS/BS/CF modelling
This did not come close to answering his question. As easy as you may find CF modeling for RE it is always more difficult in an interview and most rarely have to build models from scratch so in my opinion its more about organizing the CF than actually understanding the process.
Don't assume that. As others mentioned, excel can be used to model retail and office as well, but gets tricky with the different reimbursement methods and lease types, however, it is still doable, just takes more time. My firm uses excel for everything, we like the flexibility of it.
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