1st year analyst interview questions, modelling test, and case study for RXR/Related/SL Green type firm

For interviews at firms like RXR, Related, or SL Green, here’s what you should focus on:

Technical Questions to Expect:

1. Cap Rate Dynamics:

   • What is a cap rate?
   • How does an increase or decrease in cap rate affect property value?
   • If the cap rate changes from X to Y, how much does NOI need to grow/shrink for value to remain the same? (Formula: (Y-X)/X)

2. NPV/IRR:

   • Be prepared to calculate NPV and IRR for a given set of cash flows.
   • Understand how changes in discount rates or cash flow timing impact these metrics.

3. Market Trends:

   • Be ready to discuss local and macro real estate trends, such as rent growth, interest rate impacts, or foreign investment trends.
   • How do tech hubs or infrastructure changes (e.g., Panama Canal widening) affect real estate markets?

4. Other Common Questions:

   • Cash-on-cash return.
   • Why would a sponsor take mezzanine financing at a high rate (e.g., 12%)?
   • Differences in multiples on invested capital for two identical buildings with the same IRR.

5. Real Estate-Specific:

   • Terminal cap rate vs. going-in cap rate.
   • Walk through a DCF or debt table.
   • Discuss a past deal, including challenges and exit strategies.

Excel Modeling Test:

1. 3-Statement Model:

   • Be prepared to build or adjust a basic 3-statement model.
   • Ensure you can link the income statement, balance sheet, and cash flow statement.

2. DCF Analysis:

   • Calculate property value using a discounted cash flow model.
   • Be ready to incorporate assumptions like rent growth, cap rates, and discount rates.

3. Sensitivity Analysis:

   • Adjust variables like cap rates, NOI, or discount rates to show their impact on property value.

4. Debt and Equity Analysis:

   • Model leverage scenarios, including LTV ratios and debt service coverage.

Case Study Prompts:

1. Investment Decision:

   • You may be asked to evaluate a potential property acquisition or development.
   • Analyze cash flows, IRR, and NPV, and provide a recommendation.

2. Market Analysis:

   • Assess a specific market or submarket for investment opportunities.
   • Discuss factors like supply/demand, demographics, and economic drivers.

3. Capital Stack:

   • Propose an optimal capital structure for a deal, considering debt, equity, and mezzanine financing.

4. Scenario Analysis:

   • Evaluate a distressed asset or restructuring scenario.
   • Discuss potential strategies, such as refinancing, asset sales, or operational improvements.

Preparation Tips:

• Brush up on Excel shortcuts and formatting to ensure efficiency.
• Practice building models from scratch and interpreting outputs.
• Be ready to defend your assumptions and think critically about risks and opportunities.
• Familiarize yourself with recent deals or projects by RXR, Related, or SL Green to show market awareness.

For more insights, check out the WSO thread on analyst interview questions: https://www.wallstreetoasis.com/forum/real-estate/analyst-interview-com…</a">Analyst Interview - Common Questions.

Sources: Analyst Interview - Common Questions, Analyst Interview - Common Questions, Interviewing for a SA or Analyst position? Here's what I'd want to hear as a VP., Real Estate PE Technical Interview Question - Case Study, Restructuring technicals and their difficulty