I was wondering as a real estate acquisition analyst or associate how often you model jv /waterfall structures? what kind of RE companies have their analysts/associates model this? Im trying to get a sense of how many companies / what kind of companies require this for analysts. Is it expected at most shops? I see it as a requirement on a few job postings but it seems like it's company or role specific.
any insight on this is greatly appreciated.
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If you are interviewing, definitely know how to do it cold. You won't be creating waterfalls every day, but you must know how
It is definitely company specific. Some groups might not do ANYTHING with waterfalls or JVs, ever.
I agree with Prospie, my last job we did it once and never worried about it again. My current job every deal has a different structure, so it's pretty frequent.
NYU has a modeling class on different equity structures for $700. I'm thinking of taking it as it's better to know it than not know it. I wouldn't want to be limited in job searching/hiring due to not knowing how to model equity structures.
On average, the waterfall modeling is more for finance analysts and the accounting department. Now obviously you too need to know the mechanisms and how it will effect your deal, but the detailed side is often left to the finance/accounting wing - in my experience
I have to create one for every deal but its basically running the exact same waterfall every time with manipulations only for the hold period and equity splits.
What kind of firm do you work for? size, kind of deals, etc.
small REPE shop that is a GP sponsor fund where we co-invest with much larger LP Funds on every deal.
Deal size ranges greatly usually 25-75 is our wheelhouse but we have done deals less than 10 and >125.
In my experience, never. But then again the JV/Equity/Waterfall structure only gets played around by our "investment committee" being the CEO, CFO, Partners, and Capital Markets guy.
As of now I feel I have solid modeling skills and understanding of RE metrics and financials. I'm looking to grow my skills to get hired as an acquisitions analyst. I figured learning how to model equity structures would be a good step in the right direction/make be a better candidate to get hired. If you have any other advice please let me know.
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