So I'm an IB analyst with a secondary role of analyzing alternative real estate investments. We're based in Asia but we have property investments in the Mid-altantic in the US as well as New York ranging from apartment complexes, commercial buildings, and brownstones in NY.
So far I only have the usual financial analysis (Acquisition cap rates, Cash flows, IRR, NPV, etc) but I'm thinking of coming up with new research and analysis as value added work for my boss.
I don't think it makes sense to use a VaR (Value-at-risk) analysis on real estate especially because I don't have significant historical prices of the properties. And on top of that they're not as volatile as equities or other asset classes. What other analysis and insights can I provide?
Thanks!
You could come up with a hypothetical efficient frontier using mean-variance optimization and then show where your portfolio lies on the risk/return spectrum. You'll need historical data for that but it can be an interesting analysis. DM me if you want to discuss more. Interesting topic bump on other recommendations.
For real estate news and research check out trippple.net
Valuing a Real Estate Portfolio (Originally Posted: 11/26/2013)
Hey guys and girls. I have a second round interview coming up soon and was told that I might have to know how to value RE portfolios/holding companies.
I've never done any portfolio or entity-level transactions so I was wondering if anyone could shed some light on how this is different from a modelling perspective from individual properties.
For example, there may exist operating or management efficiencies/synergies due to portfolio/HoldCo, but how do those translate into premiums practically in the models? Thanks a lot guys.
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