Hi Guys,
Does anyone know what case study / presentation WeWork tests applicants on? I get their business model is different from traditional RE companies so would their interview tests be too? I'm thinking it might be different from modelling out a 5-year cash flow but not too sure. I tried to find some guidance online but to no avail..
Would be super grateful if anyone can provide any info, thank you!
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I did their modeling test a few years ago but not sure if they still keep it the same now. It was pretty standard model: input assumptions - run cash flow - output returns.
Ok thanks. Was it a single tenant lease model? I've heard they don't even give you the purchase price etc, just the total sq ft & location
Yes, you got to analyze the return for both the tenant and the landlord. In my case, they did give me the acquisition price so to calculate the return metrics for the landlord.
Is this a post from 2018?
What role is this for? Let's start there....
1st year Analyst
With the real estate deal-making team, the finance team, the sales team, the operations team, the janitorial team (kidding).... which group?
Haha. Real Estate Team.
So apparently it's modelling out a single tenant lease, they provide the total let sq.ft, location & the rest is research.
Sounds like you'd be a part of the analyst finance team supporting the deal makers. May have you take top-line revenue (sales team) and layer on lease economics to get a location-specific return (Deal IRR / contribution margin). Should be straightforward with assumptions and then ask you for the return metrics for both the landlord and tenant (WeWork) side of it to see your overall knowledge
what market btw? sorry if I missed that
Thanks for that. I'm just thinking how you would analyse it if WeWork is the tenant that's interested in doing a sublet with another tenant. I know someone who got that question with barely any other info (research required). The cost split between this type of lease/sublet is quite tricky :/
Appreciate your help, thanks again.
They arent subletting the space first off. They sell subscriptions on that location. Think of it like this:
Company A, B and C occupy the entire location and each pays $5,000 a month = $15K is Revenue, top line.
WeWork rents the space from the landlord for $8k a month.
WeWork also has expenses of $2k a month on this location (utilities, sales/marketing, coffee/food, community managers, etc.) = $5K OR 33% contribution margin/ebitda
WeWork also has a net outlay of say $30k to fit out that space. ($100k build-out, $70k TI from LL)
You would take the top-line revenue, subtract out the lease amounts and expenses and get to your contribution margin. Thatll get you a return metric for at least a year or whatever they ask you to do. Idk if they'll ask you to amortize the fit-out or get too granular for your position, but that's the "tenant" side of it. They might also have you do a landlord exercise that values the building based on other assumptions and the WeWork lease I pointed out above, to gauge your overall knowledge of the relationship...
btw, this is me roughly remembering my excel test with them, but I was at the Associate Director - Deal Making level
Yes, traditional RE companies try to earn profits.
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