REPE AM Modelling Test / Case Studies?

For a junior Asset Management (AM) role in a REPE firm, the modeling test will likely differ slightly from those designed for Acquisition roles. Based on the most helpful WSO content, here’s what you can expect:

Likely Components of the Test:

1. Operating Model / Cash Flow Analysis:

   • You may need to analyze property-level cash flows, focusing on income and expense projections.
   • Expect tasks like calculating Net Operating Income (NOI), Debt Service Coverage Ratio (DSCR), and other key metrics.

2. Budget Forecasting:

   • Asset Management roles often involve creating or reviewing budgets for properties, so you might be asked to forecast operating expenses or capital expenditures.

3. Valuation Analysis:

   • While not as acquisition-heavy, you could still be tasked with basic valuation exercises, such as Discounted Cash Flow (DCF) or cap rate analysis.

4. Debt/Refinancing Scenarios:

   • You might need to model debt structures, refinancing scenarios, or interest rate sensitivities, as these are critical in managing existing assets.

5. Exit/Sensitivity Analysis:

   • Sensitivity analysis on key variables (e.g., rent growth, cap rates, or interest rates) could be included to assess the impact on asset performance or exit valuations.

Differences from Acquisition Role Tests:

• Focus on Operations: AM tests are more operationally focused, emphasizing property performance and management rather than deal underwriting.
• Less Emphasis on Deal Structuring: While you may touch on debt or refinancing, the focus will likely be less on structuring new deals and more on optimizing existing assets.

Relevance of WSO and WSP Resources:

• WSO’s REPE Template: This could be highly relevant, especially for understanding the structure of real estate models and practicing sensitivity analysis.
• WSP’s Multifamily Acquisition Model: While more acquisition-focused, it can still provide valuable insights into cash flow modeling and valuation techniques, which are transferable to AM tasks.

Preparation Tips:

1. Practice Real Estate-Specific Models: Use resources like WSO’s REPE templates to familiarize yourself with the structure and key metrics.
2. Brush Up on Excel Skills: Ensure you’re comfortable with advanced Excel functions, as formatting and efficiency will be critical in a timed test.
3. Understand Key Metrics: Focus on metrics like NOI, DSCR, IRR, and cap rates, as these are central to AM roles.
4. Review Sensitivity Analysis: Practice running sensitivities on variables like rent growth, expenses, and interest rates.

Given the onsite nature and 2-3 hour timeframe, the test will likely be comprehensive but not overly complex. Focus on accuracy, clarity, and presenting your work in a professional format. Good luck!

Sources: REPE vs REI, Roles Within REPE, REPE Megafund Asset Management Comp