Have an interview coming up with a real estate asset manager (7-10bn) on the debt side as an associate
Was hoping to gain some insight on what’s expected:
-when it comes to real estate debt underwriting, what type of factors and what’s the typical process from intital stage to the point where the deal is presented to the director?
-Types of debt strategies and modeling skill set required?
They’re focused on all types of real estate asset class when it comes to financing real estate debt.
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Well... it depends. What's your strat? where in the capital stack do you lend?
Equity vs. debt modeling is largely the same with debt obviously being much more conservative (because of no upside participation but unlimited downside). Let's start here.
They're involved in the following debt strategies:
Mezzanine and preferred equity in primary acquisitions and refinancings Restructuring capital for distressed debt initiatives Development finance to unlock high quality assets
Im guessing you also need to learn how to deal with secured debt financing and read credit agreements as well.
The role involves:
-complete a full loan investment process from preliminary underwriting to investment credit submission and funding. - completion of a detailed preliminary underwriting of potential loan investments and compiling market information to support all assumptions for the investment -Responsible for ensuring that all required due diligence is obtained prior to the closing of each loan for new committed mortgage investments -Assist with existing and maturing loans - renew, restructure, report if the loan is being paid off to management, etc
Are there any resources or insights anyone can provide on how I can best position myself to secure this role? I'm assuming there will be a modeling test but what type of models can I be tested on?
I'm currently in a RE acqusitions role, and responsible for underwriting, financial/operational due diligence, and asset management activities, accretive/dilutive analysis, etc.
Take a look at the example for an agreement, https://www.sec.gov/Archives/edgar/data/1037540/000119312517136785/d369…
For each debt issued, there's a legal document for loans associated with the debt that stipulates financial covenants, default situations, change in corporation control, coupon payments (based off LIBOR usually). These are the legal terms of the deal but can be helpful when drawing up deals. It's probably best to Google out a summary of explanation for these documents, as they are pretty standardized. (http://www.distressed-debt-investing.com/2009/07/distressed-investing-h…)
Interesting - Thanks!
Update: Had my interview with HR over the phone. Lasted approx. 30 minutes. Questions mostly around behavior/fit. I had networked and discussed the group with a current employee through a cold e-mail so they appreciated that.
In the end, I asked a question about what type of people usually succeed here. Reinforced that I had the capacity. After, HR discussed the next steps - a potential interview or two if I make it (I'll know in about a week).
Appreciate the follow up. Most people come and ask for help and then never give anything back in return
Update: Finally heard back and they have penciled me in for a interview Director and MD, of the debt platform and Executive Director (Human Capital Management)
Was hoping if I could have some insight on potential technical questions they can ask? or the type of questions. Would they be focused on fit/behaviour again or would it mostly focus on techincals. As I don't have a strong knowledge or factors that are considered when it comes to debt underwriting
Did they mention an excel test?
Nothing like that. The HR lady just emailed me today confirming my interview with those 3 individuals. Usually when there is some sort of test, they give you a heads up.
I'm trying to figure out on how much of the focus will be on technicals and how much of it will be on fit/behaviour.
My experience revolves around acqusitions and asset management, as such, it's focused on conducting DD and building acquisition models but I don't have any experience when it comes to conducting lending and such
Be able to discuss the credit worthiness of a borrower. Practice framing some examples from your experience at a REIT, and how they are applicable. It appears you are a few years removed from UG so I would not expect straight up technicals. I've done UW on both the debt and equity side of real estate, and its really not that different. You mentioned they deal with all property types so have an example of every one you have dealt with.
Since you are interviewing as an associate, there will probably be an analyst or two below you in the group, so fit and personality are big. Get ready to speak on how you have helped out fellow team members to highlight you can handle being on the next rung of the ladder and is something you enjoy. As an associate you will be handling a lot of oversight of the preparation of the credit memo so stress attention to detail as a strength.
Update: Interview with MD, Director, Executive director of HR was fairly interesting. It was not technical at all. But more of a conversation/informal based and seeing the culture/fit. They appreciated the fact that I reached out to the current employee and already had a solid understanding of what they do. Additionally, the MD and I connected over one of the Directors at my current firm. The director was the MDs mentor..told me how they have stories together. So I'm assuming they were pretty good friends.
In the end they asked me if I have any questions, after that, HR director didn't mention if there will be another interview or not. But she asked me when I'll be able to start and how my timeline is looking like cause they're looking to fill the role within a few weeks or so.
I'm curious, will there be another potential interview? Maybe to test my technical? or was that it since I already met MD/Director/HR?
Possibly. Anytime I have been asked to complete an excel test/case it is always before meeting with the big wigs.
I have had the opposite experience so I wouldn't make assumptions there.
They have scheduled me for another interview with the Executive director, the director will also be there - any tips on what will be different and what's a good question to ask? As I don't want to repeat the same questions I did in the previous interview
I have previously asked: -typical day -performance evaluation/growth -market factors affecting deal flow
Also any tips on what they'll be expecting this time around? and how/what I should be doing to really stand out in a positive way..
Ask them if their lending standards have changed recently or how they stay competitive with the large amount of debt capital chasing deals. 2017 was a record year for the amount of funds raised to invest in US real estate debt which means more competition for your interviewers. And that’s not including all of the mortgage REITs. These interviews should basically just be a conversation. If you’re truly interested in this space there should be a lot of other questions you can think of like the one I listed above.
Edit: re-read your post and saw you mentioned market factors affecting deal flow. I think the point is if you read a lot on the space they work in you’ll find yourself asking questions like the one I listed above instead of more cut-and-paste questions that could be asked to any real estate investor
They actually liked this question..I changed it up a lil bit where I asked the potential challenges they may face while trying to expand in the US due to increase in competition while at the same time maintaining their value oriented approach
Got the offer! However, they said cause I don't have enough experience for associate so i'll start off as a senior analyst.
Thank you to WSO for the support might do a AMA from TD Bank Middle office in risk to acquisitions to REPE fund
How has your experience been in the past 1.5 years?
Also curious.
bump
Great so far exposure to multiple assets, multiple structures, and international real estate exposure.
Congrats on job well done!
Congrats, going into my interview (Real Estate Debt associate) in a bit, firm is based in Paris. Enjoyed reading the thread.
Background two internships in IB and one in transaction services big 4. + 2 years corporate Finance in a family office.
Not sure what are the questions going to be, comps and never dealt with debt restructuring which is big part of their work.
Had an interview with a local recruiter yesterday and got booked just after that for today.
Fingers crossed again thx for the thread
Pm me,
I am an analyst in a debt fund in Paris!
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