If you had $100M and had to invest in real estate, what would you buy/do?
In the current market and interest rate environment. What asset classes? What markets?
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Interviewers will know your answer isn't yours if you just copy someone from here
Very helpful - thanks!
It actually is because when you just repeat what someone posts here and they ask you to elaborate and you stutter and cant give an explanation, don't be surprised when you don't get the offer. No worries though, Marcus and Millichap are always recruiting.
Thanks!
Go look at the previous thread where this question was asked, and then think critically about how all the answers and reasons given there would change with an interest rate environment like today's, and a macro outlook from today versus a year or two ago. That should give you plenty of answers, and thinking about it will allow you to put it into your own words.
If you can't figure out how buying last mile warehouse assets has changed in light of Amazon's recent pressers, for example, then this isn't a good industry. Or MF in light of massive rate spikes (and likely more to come). Etc etc
which AMZL pressers are you referring to? unrelated to thread topic, so feel free to PM me if you would like to discuss. Cheers!
They said in their earnings release they're no longer looking to expand their physical capacity. Given that they have been the single largest driver of upwards pressure on logistics facilities, by far, it's perfectly reasonable to expect that market to underwrite less aggressive growth than would have been the case a year ago when the assumption was that anything on the edge of a major metro, Amazon would lease/buy
Was literally given this question in an interview for a Valuations role.
I talked about how the majority would be core to core plus assets because of risk aversion. I discussed the recent trend for industrial and included self storage since a friend of mine works in it and it’s doing well.
Then said id want to keep a portion for retail and commit to a lease up play. I had a prior internship so spoke more to the investment thesis on that. And I said that would be a small portion made for value-add for fun or investors looking at higher returns with higher risk.
If I could add to that answer post-interview, I would have said to look at build to rent in UK since it’s exploding onto the scene. But if you mention this, tell the interviewer why it’s going so well.
Basically pick an answer that allows you to discuss assets you know. If you’ve read about office then talk about office, or if you know an asset is underperforming say you’d avoid that. It’s an open ended question referencing your asset knowledge, they don’t care about proper investment thesis.
Just realized I wrote that under the assumption it was an interview help question when it’s not.
Personally, I’ve always been interested in residential and retail to small cities that big tech companies are moving to. Call it the Silicon Valley Emigration. In the last ten years, Nevada was burst onto the scene for resi and retail all because it’s a low tax state which Microsoft, Tesla (gigafactory), Switch, and a bunch of other tech companies have moved into. It would be a huge play on long term investments with an assumption that those tech companies bring in money to the community. Can also look at Utah and Texas and their development from tech. In the EU, Germany has a new Tesla gigafactory so resi around there would be for me. Resi and retail following big tech emigration - that’s my investment thesis for 100m.
You would invest most of it in whatever the specialty of the shop that you're interviewing with is, with the remainder in a diversified portfolio of multifamily, self storage, and industrial.
I mostly agree, with a caveat. This will be fine most of the time, but I interviewed at a shop that did a lot of self-storage (knowing only the basics of storage real estate). Had I said most in storage, no way in hell I could answer questions intelligently from people who work full-time in that asset class. Have to be careful not to BS these too much. This would apply to any niche as well. Medical office is a great example where you'd have to know a bit more than just the basics to explain yourself to professionals.
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