Unreasonable Time Expectations for my Analyst's Industrial/Office Underwriting?
Context: Relatively new to a small family office primarily focused on office/industrial having come from a multifamily background. I have a new analyst, freshly out of undergrad, that is still getting his feet wet. I completely understand it takes time and am very patient with him since we've all been there before. However, it is currently taking him nearly a week to turn around a first cut of underwriting any potential deal which seems a bit....absurdly long.
Spoke to my much older supervisor about this and he assured me "we can't hold him to the same level as you", and when I asked his thoughts on what a solid benchmark would be and he more or less said he had no idea how long it takes nowadays since he had been very hands off with my predecessor. He then told me that "all the underwriting [my predecessor] ever did should be on file", and when I found the folder on our shared drive, it contained a whopping 30 separate instances of pursuits with even preliminary underwriting over 5 years.
Again, coming from my background I can't imagine that their processes can possibly be that elaborate, so can only assume that my predecessor just didn't bother documenting his work.
So I suppose my question is twofold:
1) Would it be a dick move by me to hold him to a higher standard than our leadership has apparently had? I don't want to run the kid into the ground when the status quo seems a-ok by everyone, but I feel like I would be doing him a massive disservice not to prepare for the pace that would be expected elsewhere? Eve
2) What would you say is a "reasonable" amount of time to expect on a first cut of underwriting for office/industrial for a relatively new Analyst?
Have him shadow you as you work through a few model. invest more time up front to show him how efficiently it can be done, and then hope he shows progress over the next few months when he's doing it on his own.
Don't be a dick. Sounds like a new analyst. If Anything recommend him some modelling development courses. Its still excel and not cancer. Sounds like senior executive team understands that but you don't.
From my experience it shouldn’t take longer than 1 day to do a preliminary underwriting. I work for a MF tho so the expectation is that you get a deal and the next day you are discussing it with your manager & turning around comments.
Don’t be aggressive but def give him pressure on timing - he may hate you right now but he will learn to work under pressure and will review more deals. I think the most important thing is how you ask him to do things ie if you ask him to produce smth for tomorrow and then take a week to look at the analysis then you would be a terrible manager.
Have a conversation with him and work through a model with him. See how he thinks. He either (A) is not being productive or (B) has absolutely no idea how to use excel and doesn’t know where or how to focus. He also could (C) be getting work from others and just not telling you.
Sit down with him and talk him through it. What work do you consider ‘first cut.’ I think you need to think about your expectations too. If first cut is plug and chug a template - that’s fast. Maybe 2 days tops. Realistically 3 hours. If it’s a custom build - that could be why it’s a week.
Sit et voluptatem perspiciatis doloribus eaque. Beatae ab est at nihil fuga rem.
Harum recusandae ullam autem. Consequuntur eum iste et commodi dolorem iusto voluptas. Magnam odio laboriosam qui est quia impedit quia. Voluptas eum aspernatur nulla necessitatibus dolores voluptatem voluptatibus eos. Necessitatibus dolor at cupiditate repellendus eveniet.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...