How many deals do you underwrite / do a year?

For acq analysts and associates: how many deals have you personally been underwriting and closing a year recently?

Likely to be a lot of grey area here depending on your definition of "underwriting", but let's just say at a minimum it means having a model done and can support all the assumptions, but not necessarily gotten into DD (e.g., for an office deal, haven't actually gotten lease abstracts or leases so going off an OM or whatever the seller feels like sharing).

Given pricing and general apprehension about reaching for much, it feels pretty slow and I want to see if it's just me. I'd say closing like 2-3 and underwriting 25. Quick reviews, napkin math and quick no's on the rest, which is probably a handful a week.

Comments (71)

Jul 10, 2017

155 underwritten, 6 closed.

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Jul 10, 2017

do you do a full model/some research/comps and everything for each deal? and do you focus on a few specific property types/markets/investment strategies? I couldn't imagine cranking through so many models while bouncing around from a bunch of different types of deals. solid clip for sure.

Jul 10, 2017

90% multifamily, 10% MF/retail mixed use, US West. Do a full model for each one. If the deal looks meh, I won't spend a ton of time on comps, which is honestly the most time consuming part of the entire process. If there's even a hint of potential, I'll dig into comps pretty thoroughly though.

Jul 10, 2017

My goodness. Do you live in the office?

Jul 10, 2017

Nope. 8:30-6ish. It's not like I'm building a model from scratch every single time.

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Jul 11, 2017

damn is the ratio usually that low??

if you want to succeed as bad as you want to breathe, then you'll be successful

Aug 10, 2017

if you're a good underwriter it is.

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Jul 12, 2017

My numbers are pretty close to this...I review around 1000+ a year, and do underwriting on 10-15% of those if they fit our criteria. We closed on 7 deals and had 3 under contract at year-end.

Aug 10, 2017

good ratio, my dude.

Jul 10, 2017

YTD I've underwritten 38 deals and closed 2.

Jul 10, 2017
picklemonkey:

YTD I've underwritten 38 deals and closed 2.

+1. Right around 50 and closed 2 YTD.

Jul 10, 2017

LIHTC is a different beast. We don't do full underwriting until there is a commitment of tax credits. Once we move to underwrite a deal we close 99% of the time. We probably kick the tires on twice as many as we close.

Jul 10, 2017

YTD 50 ish packages received. Probably 10 ish deep dive and 2 closed. I don't model it unless I pretty much know it will hit our min return and is in an acceptable maket (in other words actually planning to pursue) unless I'm just bored.

Jul 10, 2017

UW roughly 190, closed 0.

AMA

Jul 11, 2017

can't make sense of pricing right now?

Jul 12, 2017

Yup, it's a ridiculous market out there for MF. Foregin capital, local buyers sitting on cash, and exchange money has made this market absolutely nuts to transact in. The only deals we did last year were true off-market, direct to owner deals with no broker influencing the seller on pricing. Even then, the returns were good, but could have still been better if a 4% cap was not the norm in primary markets right now.

Jul 11, 2017

LOL

if you want to succeed as bad as you want to breathe, then you'll be successful

Jul 10, 2017

-

Jul 11, 2017

50 u/w extensively , 3 closed

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Jul 11, 2017

Can't recall total number, but percentage is about a 3% close rate. I guess everyone is in line with each other.

Jul 11, 2017

Just going back to my team's database, we have underwritten 127 deals so far, closed 0 this year. Personally, I've been involved in 75-80% of those. Multifamily value-add focus, pricing has been the main reason for killing deals.

Jul 11, 2017

So who is buying all this shit?!?!? The brokers appear to be transacting.... sneaky little guys....

Jul 12, 2017

UW 100 MF deals closed 2. Full model/comps/package for each

Generally will look at everything in the 3 cities I cover, to gain intel on ops/margins/rents/noi at our neighbors properties

Jul 13, 2017

That's a smart play if you have the extra time. Underwriting deals you may not pursue to have a better comp set. Plus good learning experience for you as well?

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

Jan 8, 2018

yep, real estate is an inefficient market so you need to look at everything. If your'e a value add shop like we are you can get a lot of information about market health by reading every deal's operating history and interior upgrade potential.

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Mar 22, 2018
turbosafari:

UW 100 MF deals closed 2. Full model/comps/package for each

Generally will look at everything in the 3 cities I cover, to gain intel on ops/margins/rents/noi at our neighbors properties

I'm in DC from when I talk to brokers it sounds like there's literally 2-3 buyers buying 95% of the deals. This is class B-C, "tweener" delas 20-150 units

Jul 21, 2017

I just finished a summer internship and in 8 weeks ran financial analysis on 18 OM. Of those 6 went in deeper analysis (market, comps,etc) and 3 closed.

Jul 21, 2017

Seems like most of the responses are on the equity side. I'd say over a period of a year I would have seen about 50 debt packages. We have a standard template across all asset classes and it'll usually involve plugging in numbers initially. If it's debt that fits within our box and we're in a position to vie for business we'll write up a full committee memo/comp analysis. I'd say 80% of stuff we receive gets the full underwrite.

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Jul 24, 2017

Quick Excel: ~250+
Argus: ~150
Closings: ~<10

Aug 1, 2017

I was the only analyst from 2012-2016 for a three man shop. We averaged $350MM in Debt Placement a year within 50-55 transactions. I underwrote on average 90-100 deals a year.

Jan 9, 2018

Underwrite around 35 a year, close 1-3 typically

Jan 9, 2018

As acquisitions intern analyst around 1 UW every second week so that would be around 25 in a year. Full time I would say 1 every week but it really depends on market. Closing I would say 1 in 10.

Jan 10, 2018

Underwrite probably 200/year, tour probably 50, close 5-8.

Jan 10, 2018

Acquisitions analyst at REPE shop for about 8 months now and underwritten about 120 and closed on 0. Been in best and final 3 times. MF pricing is nuts right now.

Mar 22, 2018

200 UW; around 8-10 closed or on pace.
4-5% closing rate
We usually look at 4-5 opp per week.

Mar 23, 2018

after reading the answers - I thought that I'm lazy, I should work more...

Mar 23, 2018

Depends on group. If you're in a heavy transaction focused group (like Equity Capital Markets, god forbid), you'll probalby end up doing a lot. 6-7 each year (including IPOs, follow-ons, block trades etc.) isn't uncommon. If its your traditional M&A / Financial Sponsors type group or the industry groups, I'd say you be lucky to be on about 3-4. A lot of deals die midway, and then come back to life to fuck with you during the worst time of your year where you may have a follow-on, notes offering etc. to focus on as well as 3 M&A processes.

To answer specifically to your question- for your "selected transaction experience" - you'll be very lucky to be on just around 2 legit ones (M&A/Acq financing type deals are what they care about most). BUT the good thing is you can get away with listing bullshit big ass deals that you know have died but its confidential info and no one else does. That's a good resume filler.

That said, if you've got any transaction up there on your resume, you better know every tiny detail of it. If not, that could hurt your credibility a lot. Hope this helps.

Mar 23, 2018

I'm on three, all of which are dragging along at what seems to be a snails pace. Spend most of my time preparing pitch books....for what that is worth.

its one way or the other: hate me or admire.

Mar 23, 2018

It's tough to answer because it depends so heavily on the group... I've done three follow on offerings in 1 week and I've been on buy side M&A processes that were started by since-departed analysts who had been working on them for 8 months before and I have spent 8-9 months on them myself and they still haven't transacted. It's best to talk to people in the group you know closely and ask them what their transaction experience is like.

Mar 23, 2018

If you do a 2-year stint at a boutique, how would you want to categorize your experience when applying for a lateral IBD or boutique/MM PE? Top 3 M&A deals over that span by transaction size? Top 3 deals by your contributions? Some other categorization?

My name is Nicky, but you can call me Dre.

Mar 23, 2018

officejargon, pure crickets, that's where I come in. Any of these useful?

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  • Acquisition Fee (bonus on closed deals)? And if so, how many basis points are you getting, and what is you typical deal size in dollars? Thanks ... Curious if anyone on the acq side has a bonus structure that pays an acq fee % on deals closed ...
  • Acquisitions VP Salary- Sourcing/Closing How much is an acquisitions VP's salary based on sourcing/closing deals? I would assume it ... could be significantly higher than base depending on the volume of deals, but could anyone give a range? ... Would it be based on a percentage of purchase price or do most firms compensate a VP based on a flat fee ...
  • Acquisitions Folks- How active is your current pipeline? When was the last time your group closed a deal? If not very active, what have you been doing in your ... Wanted to touch base and have a discussion regarding deal pipeline. How active are your groups? ... downtime? Would be helpful if you could list: Are your deals debt or equity Main market(s) your team is ...
  • Resume- how do you list transactions that haven't closed or didn't close? more. Since there's no closed transaction to refer to, and companies need to remain anonymous, ...
  • How Do You Deal With People That Can't Stand Wall Street? towards how do you deal with the hate and what do you usually say in responses. I am new to the industry ... then on I just find myself nodding my head in appeasement. How do you usually defend yourself from ... people like this in these conversations, wether it be family, close friends etc.? As most of you w
  • Notes for Technical Interview Questions oil reserves or book value, depending on the industry and situation How do you do a DCFF?- First model ... / JVs = equity value How do you derive FCFE from FCFF? o I usually start from EBIT when I am doing ... you are discounting How do you get WACC? What is the tax rate used- marginal or eff
  • Can you have a good year without closing a lot of deals? Are closed deals really a good measure for how well a firm is doing? I know this particular firm has ... question is how close is the correlation between closed deals and fees collected? boutiques fees closed ... only closed one deal so far in 2010, and it was relatively small for them. Usually they are ...
  • More suggestions...

If we're lucky, maybe I can guilt some users to help you out: @Amir-Nour @Patacono @seekingalphadc

If those topics were completely useless, don't blame me, blame my programmers...

Mar 23, 2018

Will do, thanks for pointing out those discussions

Mar 23, 2018

MF Development shop. Targeting 3-4 new deals this year. Have 10 on-going in various states. Should sell 3-4 of those too.

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Mar 23, 2018

M E R C H A N T

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Mar 23, 2018

Large family office

We will probably do 8 - 10 deals this year. 2018 started off hot with 5 closing before the end of March. I anticipate the latter half of the year will be slower. We also have 3 - 4 dispositions on the table as well. This is shaping up to be much busier than previous years.

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Mar 23, 2018

What metrics do family offices look at when considering buying investment property. FO do not take in investors money if I'm correct. Just curious how long term family holders evaluate property. If there are no investors, I'm assuming IRR isn't important? Is cash on cash the most important? Thanks.

Mar 23, 2018

It really depends on the size of the portfolio and how many people you have on a team. Most big teams in Texas have about 5MM feet to work with - 20% renewals each year and then new business to back-fill.

Mar 23, 2018

What would commission rates look like on renewals? Half the normal rate? Standard 4/2?

Mar 23, 2018

When I was in office leasing we had approx. 18-25 listings at any given time and probably did about 50-60 deals a year on average. We were one of the top 5 most active landlord rep teams in our market.

That being said, we did a lot of deals in the 2,500-5,000 SF space that kept us buoyant. There are plenty of star brokers who don't want to waste their time with that kind of deal size, and may only have 10 listings but with way more vacancy = more income potential.

There are also tenant rep guys in each market who may do 1-2 big boy deals a year, make their $1M+ in fees on that single deal, and spend most of the rest of their time dicking around playing golf.

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Mar 23, 2018

Still think being a star tenant rep leasing broker is about as good as it gets in this industry

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Mar 23, 2018

It really depends on the stage of the deal you are at. At certain stages, one deal can take 20 hours of your day or no time at all. At my MM, if things are spaced out nicely you can handle three at once as a second year and two as a first year. For us, there is one person at each level and that's it, meaning I report to the four people above me per deal. Also, people don't hesitate to call direct if they want something, so it isn't unlikely to get a call from the MD requesting that you pull something together.

Mar 23, 2018

If we take a generic sellside M&A auction deal where you go out to a large number of parties, there's a lot of work upfront with preparing all the marketing materials and presentation etc., but it slows down a bit when the senior banker is actually calling on buyers and the associate (sometimes analyst depending on deal) is just sending materials over and setting up meetings.

You get busier when you go into exclusivity (assuming someone actually signs an LOI) and have to deal with one buyer directly... sometimes can be lots of customized analyses, presentations etc.

And then when a deal is about to be announced and you have to do a FO (Fairness Opinion) you get insanely busy scrubbing numbers and doing 500 turns of a presentation for days/weeks.

Keep in mind, this is just for a generic M&A auction deal - IPOs and M&A deals where the buyer and seller have already started down a path and you're brought in at the last minute will be different in terms of workload and what you have to do.

TYPICALLY, I am working on 3 or 4 active deals at once, where I define "active" as "Requires at least 10-20 hours of work per week."

However, sometimes the hourly mix is very off - this past week, for example, I spent about 50-60 hours on one deal that is moving toward the final stages, and only around 10 hours on 2 other deals, with the remainder of my time being taken up with marketing, handling random favors for people, etc.

In general, there is never more than 1 Analyst on a deal here, especially with the "reduced headcount" lately and loads of people being fired.

Back when times were good if some huge (> $20B) type deal came up, sometimes 2 Analysts would be staffed on a project with the expectation that it would require a massive amount of effort to close.

How many people I have to report to daily... also difficult to answer, but mostly 3-4 Associate/VPs, sometimes more senior people will ask for favors though.

Mar 23, 2018

Better question is...how many M&A deals that you worked on closed?

At the end of your 2 years, how many M&A deal toys can you expect to have?

Mar 23, 2018

During my two years, 4-5 of the deals I worked on closed. Had a deal blow up in final bid stage (damn recession) and had 2-3 others die off after substantial work had been done (post writing the offering memorandum). All of this was M&A. In my ~1.0 - 1.5 years of PE, so far I've closed three M&A deals.

So, not the largest deal toy collection, but I'm working on it!

Mar 23, 2018
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