Real Estate Interview Case – DCF Modeling for Logistics / Industrial Asset

For preparing a DCF model for a logistics/industrial asset, here’s what you need to know based on the most helpful WSO content:

1. Common Case Study Prompts:

   • Many real estate modeling tests focus on value-add assets like multi-family or industrial properties. You might be given base assumptions such as current occupancy, rents, stabilization timelines, and asked to solve for metrics like the purchase price that achieves a target levered IRR (e.g., 18%).
   • You may also be required to incorporate a basic 2-tier equity waterfall, which is common in private equity real estate assessments.

2. Key Components to Practice:

   • Property-Level Cash Flow Statement: Build out cash flows, including rental income, operating expenses, and net operating income (NOI).
   • Debt Amortization Table: Model the debt structure, including interest payments and principal amortization.
   • Sources and Uses Table: Detail the capital stack, including equity and debt contributions.
   • Equity Waterfall: Understand how to structure and calculate distributions to equity investors.
   • Valuation Using Cap Rate: Be able to calculate the terminal value using a cap rate.
   • Return Metrics: Calculate IRR, cash-on-cash return, and equity multiple.

3. Practice Resources:

   • Templates: WSO offers financial modeling templates, including DCF and real estate-specific models, which can be a great starting point.
   • Mock Assessments: The WSO forums have examples of real-world prompts, such as solving for purchase price or modeling out returns for a logistics asset.
   • Videos and Guides: WSO’s financial modeling training includes lessons on DCF, M&A, and real estate modeling, taught by experienced professionals.

4. Additional Tips:

   • Practice under time constraints to simulate the pressure of a real interview.
   • Focus on accuracy and clarity in your model, as presentation quality is often evaluated alongside technical skills.

For more detailed examples or templates, you can explore the WSO forums or reach out to members who have shared similar experiences. Good luck with your preparation!

Sources: Interviewing For Infrastructure Investment Roles, Real Estate Modelling Test Practice, Real Estate PE Technical Interview Question - Case Study, Interviewing For Infrastructure Investment Roles, Real Estate Private Equity Case