Hi all -
I'm setting a case study for a Real Estate PE / Corp Dev role (UK/Europe based) for someone with 1-4yrs experience. Candidates generally all have Real Estate IB/Investment backgrounds. Timing is 2.5 hrs to build cashflows from scratch and prepare a few slides summarising to the IC: cashflow outputs, Sources and Uses, & provide an investment recommendation.
I'm trying to get a feel for what seems reasonable as a case study within the timeframe . Am thinking the following:
- Build cashflows to acquire and develop a new build MFH portfolio
- All development costings & cashflows provided by in XLS for the candidate
- No need to work off complex rent rolls i,e candidates can basically take a starting portfolio rent at PC date, grow by X% p.a., and apply a single NOI margin across the portfolio which changes each year to get to NOI. All assumptions provided
- Financing schedule: Model an equity first development loan (with commitment fees) which flips into an investment loan after 2 yrs. Excess proceeds paid back to investor as a dividend recap. All financing assumptions provided in the briefing.
- Tax assumptions: v. simple running tax assumption provided. No exit tax.
- Exit cap rate and fees: assumptions provided.
- Fund fees/costs: assumptions provided. Candidate needs to model out recurring fees, a one-off fee upfront, and a simple 1 tier carried interest schedule
- Term: 4 yr hold
When I had a go from scratch the model took me about 1.05hrs to complete albeit I know the sector/this type of cashflow model quite well, but would be appreciated if I could get a sense check re if this all seems sensible /on-market in terms of difficulty?
Let me know if helpful to clarify any points.
Thanks!
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