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.
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).
Fully understand contribution/distribution priority/seniority. Say an apartment gets built with GP and LP common equity, a mezzanine slug, and a senior construction loan. How does each capital account accrue interest, which account does available cash flow payoff first, when is cash flow permitted to be distributed based on the loan covenants etc... In this case most likely the senior note debt service would get paid first, usually I/O for 3 years or so, then the mezzanine note, and then the GP/LP pref/capital pari passu or the LP equity account first then the GP equity. We also sometimes structure it as LP pref, then GP pref, then LP capital return, then GP capital return because lenders are now forbidding capital return distributions until the note is fully paid.
I've learned far more on the modeling front from the CFO I work under now with a CPA than the managing directors at high-level institutional capital markets shops. If you can understand all pre-tax/depreciation accounting for development projects from land acquisition to disposition and how cash matriculates through all the capital accounts you will be able to tackle pretty much anything in CRE