Real estate models

I was wondering fellow CRE members, I know that we get some flack from fellow financiers for our models. What are some more complex real estate models?

Comments (15)

Apr 25, 2020 - 2:49pm

Tell them to have fun watching their livelihood automated away over the next 10-20 years, then tell them to pound sand. Anyone who relishes in increasing life's complexity deserves to be trolled into eternity.

"Who am I? I'm the guy that does his job. You must be the other guy."
Apr 25, 2020 - 3:07pm

Try modeling or explaining a multi-tier waterfall cash flow distribution scheme with look-back IRR based hurdles. That will go toe to toe with most LBO or other complex deal structure models the I-bankers do (like in the M&A shops).

The fact that it is generally easier to estimate rents on a building or set of buildings for multiple years than estimating sales of toothpaste from 12 countries year by year is not our fault!

Most Helpful
Apr 25, 2020 - 7:42pm

To some extend everyone is who said you don't need complex...they are wrong.

There are two camps to complex, the entire 1-2 page of inputs that is a black box and those with a dashboard and annual return rollup below. I've seen models so complex that I could not edit easily, in that case what is the point. But, if you can make a complex model with separate budgeting, draw, waterfall, monthly, yearly rollup, financing tab that all rollup to one summary page with cash inflows and outflows, yeah that makes a complex model look really simple.

I'VE seen simple models not include any lease-up period, I've seen models be off 2 million dollars in capitalized interest cost. I've seen simple models have an ltv sizing when the project ended up being dscr constrained.

To @MokeyWrench, do you really think the analyst position is going to be automated? I don't, that is where you grow and teach future VPs and MDs about the business. It is not like a position that exists for 10-30 years, you generally move up from analysis to management and if you did not spend your time in the analyst period you wouldnt really knwo what you are doing.

  • Associate 1 in RE - Comm
Apr 25, 2020 - 8:33pm

Having worked in both banking and REPE, I honestly think the RE models I'm working on now are more complex...

  • Analyst 3+ in RE - Comm
Apr 25, 2020 - 9:52pm

less is more. GIGO. make sure assumptions and inputs are solid. that's the most important.

complexity probably leads to more BS models. no need in RE. JUST GET DEALS DONE.

Start Discussion

Popular Content See all

Girlfriend vs PE
+70PEby Investment Analyst in Private Equity - Growth Equity">Investment Analyst in PE - Growth
Life Hacks during WFH | How do you avoid burnout?
+57IBby 1st Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 1 in IB-M&A
Leaked EY Email
+53IBby 1st Year Analyst in Investment Banking - Industry/Coverage">Analyst 1 in IB - Ind
I’ll never take WSO for granted again
+49OFFby Principal in Venture Capital">Principal in VC
What's so good about Evercore?
+36IBby Prospective Monkey in Investment Banking - Mergers and Acquisitions">Prospect in IB-M&A
Have any 1st year analysts actually quit?
+33IBby 1st Year Analyst in Investment Banking - Mergers and Acquisitions">Analyst 1 in IB-M&A
I'm tired man
+26IBby Intern in Corporate Finance">Intern in CorpFin

Total Avg Compensation

January 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (31) $349
  • Associates (139) $232
  • 3rd+ Year Analyst (18) $155
  • 2nd Year Analyst (86) $151
  • Intern/Summer Associate (89) $144
  • 1st Year Analyst (344) $134
  • Intern/Summer Analyst (298) $83

Leaderboard See all

LonLonMilk's picture
Jamoldo's picture
Secyh62's picture
CompBanker's picture
redever's picture
frgna's picture
bolo up's picture
bolo up
NuckFuts's picture
Edifice's picture
Addinator's picture