Prepping for a REIT Analyst ER Interview?

prnz's picture
Rank: Baboon | 164

Next week I have a 90-minute set of phone interviews for an equity research position as a REIT analyst. I would be coming into a junior position as an experienced hire. I've done consulting in the real estate industry for about three years now.

How can I best prep to nail this interview? What questions should I expect?

Comments (15)

Oct 15, 2009

You can expect anything that might be touched on in REIT ER. There will be a combination of fit and behavioral questions. You can also expect them to try to figure out your suitability for research (any background you have in it etc).

As to technical stuff, expect NAV questions, cap rates, WALE and stuff like that. The best prep work would be to read anything published by the people you are going to interview with and make sure you understand it.

Out of curiousity is the for GSA?

Oct 15, 2009

WALE is a metric I've never come across.

Also not sure what you meant by GSA.

Should I prep for property type or locational specific questions? I assume I should go in with REIT picks..

Oct 15, 2009
prnz:

WALE is a metric I've never come across.

Also not sure what you meant by GSA.

Should I prep for property type or locational specific questions? I assume I should go in with REIT picks..

WALE - weighted average lease expiry. Very important from a quality of earnings perspective.

If you don't know who GSA is then don't worry about it.

I would only prep for property type and locational items if you are interviewing for a specific coverage role. So, if its a generalist role you should definitely be conversant in trends among the main property types (Office, Industrial, Retail, Multifamily, Lodging).

REIT picks... you can have them, but remember these guys live and breathe them so be careful. Overall trends are better as well as why a REIT could be a good buy.

Oct 15, 2009

WALE is weighted average lease expiry

Also know FFO, implied yield (calculated using portfolio noi over EV).

Honestly, try to get a hold of a equity research report for one of the major retail (Simon), office (Boston Prop) and industrial (ProLogis) REITs.

You also should understand what fundamentals drive rents. i.e. increase in jobs, or supply contraints etc.

Oct 15, 2009

Honestly all my dealings have been through a headhunter so far, so I don't know who exactly I'll be talking to nor do I know many particulars about the job other than the bank and the info outlined above.

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Oct 15, 2009

M&A and IPO deals heating up in the REIT space. New players from the private REIT market coming into the public arena. Know valuation multiples I guess (FFO, AFFO, etc.).

Oct 15, 2009

Be sure to review American Tower, Crown Castle, SBA Communications closely and understand the basic story. American Tower is a REIT and others will be following in the next few years to capitalize on the tax-advantaged structure. GAAP requires REITs to provide a reconciliation from net income to funds from operations (FFO) and valuation typically centers around FFO/AFFO multiples, discount/premiums to net asset values, but could also include implied capitalization rates, dividend discount and free cash flow models.

Most REIT analysts tend to stick to the major sub-sectors (apartments, retail, office, industrial, healthcare) and leave the timber, tower and other alternative areas to other parts of the house i.e. paper/packaging, telecom, etc.

Good luck!!

    • 1
Oct 15, 2009

Know things like vacancies, occupancy, as well asset classes. Look in to difficulties REITs face (missed payments for retailers) and the importance of cash flows and credit worthiness of the tenents. Also real estate is a long hold. It's long. Know how this has advantages and disadvantages.

Telecom is phones and stuff. (probably not something you should say during an interview)

Oct 15, 2009

they will be impressed if you know about Iron Mountain(the box company) became a REIT

Oct 15, 2009

Thanks a lot guys. Great info that will hopefully help me nail that interview.

Oct 15, 2009

I'd be interested to hear about the exit opps, too. To be honest I wouldn't be surprised to hear that you can go from equity research (REITs) to REPE. REPE's a lot easier to get into than LBO funds.

Oct 15, 2009
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