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Working in  Real Estate Finance
Introduction <ul><li>Real Estate Finance Industry Overview </li></ul><ul><li>IB and PE Summer Associate Perspectives </li>...
“ Real Estate Finance”  Industry Overview
Industry Overview Investment Banking <ul><li>Real Estate Investment Banking </li></ul><ul><ul><li>Lead equity and debt pla...
Industry Overview Private Equity Funds <ul><li>Assemble capital from institutional investors, pension funds, and wealthy i...
Industry Overview Alternative Careers <ul><li>Pension funds  – Advise funds on real estate investment opportunities </li><...
Day in the Life….. Investment Banking Summer Associate
Recruiting Process <ul><li>Recruiting Process </li></ul><ul><ul><li>Conducted numerous informational interviews </li></ul>...
Highlights of My Summer <ul><li>~$3B sell side M&A deal </li></ul><ul><ul><li>Deal hopefully will be announced soon </li><...
Typical Day <ul><li>Typical Day </li></ul><ul><ul><li>No day was the same! </li></ul></ul><ul><ul><li>~90-100 hours/week <...
Required Skills <ul><li>Skills That I Needed </li></ul><ul><ul><li>Excel (Training the Street) </li></ul></ul><ul><ul><li>...
What I Learned <ul><li>Investment Banker = Financial Consultant </li></ul><ul><ul><li>Must be proficient in finance and ac...
Day in the Life….. Private Equity Summer Associate
Summer Highlights <ul><li>Analyzing $1 billion-plus deals </li></ul><ul><li>Visiting properties / travel </li></ul><ul><li...
Summer Associate Perspective: Working on a Deal Team <ul><li>Identify the target (this happens under different scenarios) ...
Important Skills & Traits <ul><li>Functional </li></ul><ul><li>Communication skills </li></ul><ul><li>PowerPoint </li></ul...
Case Study Tishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust   -$13.5 billion-
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Re finance presv5

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Transcript of "Re finance presv5"

  1. 1. Working in Real Estate Finance
  2. 2. Introduction <ul><li>Real Estate Finance Industry Overview </li></ul><ul><li>IB and PE Summer Associate Perspectives </li></ul><ul><li>Bank of America Case Study </li></ul><ul><ul><li>Tishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust for $13.5 billion </li></ul></ul>
  3. 3. “ Real Estate Finance” Industry Overview
  4. 4. Industry Overview Investment Banking <ul><li>Real Estate Investment Banking </li></ul><ul><ul><li>Lead equity and debt placements </li></ul></ul><ul><ul><li>Advise on sale of real estate portfolios and assets </li></ul></ul><ul><ul><li>Provide general advisory services to public & private companies </li></ul></ul><ul><li>Typical Role of Real Estate Investment Banker </li></ul><ul><ul><li>Advise on M&A transactions </li></ul></ul><ul><ul><li>Pitch deals to clients </li></ul></ul><ul><ul><li>Create offering memorandums </li></ul></ul><ul><ul><li>Market portfolios to prospective buyers </li></ul></ul><ul><ul><li>Negotiate transactions </li></ul></ul><ul><ul><li>Perform due diligence for acquisitions </li></ul></ul><ul><ul><li>Serve as a liaison between the capital markets team and clients for debt and equity transactions </li></ul></ul>
  5. 5. Industry Overview Private Equity Funds <ul><li>Assemble capital from institutional investors, pension funds, and wealthy individuals </li></ul><ul><li>Structured as limited partnerships (typically) </li></ul><ul><li>Invest in such things as: </li></ul><ul><ul><li>Real estate and mortgage instruments </li></ul></ul><ul><ul><li>Single assets </li></ul></ul><ul><ul><li>Real estate portfolios </li></ul></ul><ul><ul><li>Real estate companies </li></ul></ul><ul><li>Types of real estate private equity funds: </li></ul><ul><ul><li>The Blackstone Group, Apollo, Fortress </li></ul></ul><ul><ul><li>Wall Street Merchant Banks: MSREF (Morgan Stanley), Whitehall Funds (Goldman Sachs) </li></ul></ul><ul><ul><li>Colony Capital, Starwood Capital Group </li></ul></ul><ul><ul><li>Cherokee Partners, Cypress RE Advisors, Beacon Capital </li></ul></ul>
  6. 6. Industry Overview Alternative Careers <ul><li>Pension funds – Advise funds on real estate investment opportunities </li></ul><ul><li>Corporate Banking – Assist local developers with obtaining capital requirements </li></ul><ul><li>Capital Markets – Work in an industry-focused product group (high yield, derivatives, CMBS) </li></ul>
  7. 7. Day in the Life….. Investment Banking Summer Associate
  8. 8. Recruiting Process <ul><li>Recruiting Process </li></ul><ul><ul><li>Conducted numerous informational interviews </li></ul></ul><ul><ul><li>Took steps to learn more about real estate </li></ul></ul><ul><ul><li>Interviewed through the CMC in early January </li></ul></ul><ul><li>Tips </li></ul><ul><ul><li>Understand culture of each firm </li></ul></ul><ul><ul><li>Stay knowledgeable on the industry </li></ul></ul><ul><ul><li>Interviews - prepare, prepare, prepare </li></ul></ul>
  9. 9. Highlights of My Summer <ul><li>~$3B sell side M&A deal </li></ul><ul><ul><li>Deal hopefully will be announced soon </li></ul></ul><ul><li>$3.4B sell side M&A deal </li></ul><ul><ul><li>Gramercy Capital Corp bought American Financial Realty Trust </li></ul></ul><ul><li>Presented to CEO/CFO of St. Joe </li></ul><ul><li>Experienced the market’s meltdown </li></ul><ul><li>Other miscellaneous deal teams </li></ul>
  10. 10. Typical Day <ul><li>Typical Day </li></ul><ul><ul><li>No day was the same! </li></ul></ul><ul><ul><li>~90-100 hours/week </li></ul></ul><ul><ul><li>Frequent interaction with deal team leader </li></ul></ul><ul><ul><li>Dinner </li></ul></ul><ul><ul><li>“ Hurry up…wait” </li></ul></ul><ul><ul><li>Crackberry </li></ul></ul>
  11. 11. Required Skills <ul><li>Skills That I Needed </li></ul><ul><ul><li>Excel (Training the Street) </li></ul></ul><ul><ul><li>PowerPoint </li></ul></ul><ul><ul><li>Organization </li></ul></ul><ul><ul><li>Communication (verbal & written) </li></ul></ul><ul><ul><li>Common sense </li></ul></ul><ul><ul><li>Balanced life </li></ul></ul><ul><ul><li>Positive attitude! </li></ul></ul>
  12. 12. What I Learned <ul><li>Investment Banker = Financial Consultant </li></ul><ul><ul><li>Must be proficient in finance and accounting </li></ul></ul><ul><li>Skills I need to continue to develop </li></ul><ul><ul><li>Becoming more efficient in Excel = more sleep </li></ul></ul><ul><ul><li>Capital markets and valuation knowledge </li></ul></ul><ul><ul><li>Real estate industry knowledge </li></ul></ul>
  13. 13. Day in the Life….. Private Equity Summer Associate
  14. 14. Summer Highlights <ul><li>Analyzing $1 billion-plus deals </li></ul><ul><li>Visiting properties / travel </li></ul><ul><li>Meeting management teams </li></ul><ul><li>Drafting an OM </li></ul><ul><li>Starting in a hot market & witnessing the debt markets freeze </li></ul><ul><li>Attending a major private equity conference </li></ul><ul><li>Learning about the models and investment approach </li></ul><ul><li>Learning from the other people in the firm </li></ul>
  15. 15. Summer Associate Perspective: Working on a Deal Team <ul><li>Identify the target (this happens under different scenarios) </li></ul><ul><li>Research the target & its industry (high level) </li></ul><ul><li>Work with an associate in creating the initial model </li></ul><ul><li>Prepare initial Investment Committee (“IC”) presentation </li></ul><ul><li>Establish next steps with the target company </li></ul><ul><li>Work through the data room and perform basic due diligence </li></ul><ul><li>Additional IC presentation </li></ul><ul><li>Meet with the management team (travel) </li></ul><ul><li>Perform extensive due diligence (travel) </li></ul><ul><li>Additional IC presentation </li></ul><ul><li>Next steps… </li></ul>
  16. 16. Important Skills & Traits <ul><li>Functional </li></ul><ul><li>Communication skills </li></ul><ul><li>PowerPoint </li></ul><ul><li>Excel </li></ul><ul><li>Financial analysis </li></ul><ul><li>Strategic analysis </li></ul><ul><li>Common Sense </li></ul><ul><li>General </li></ul><ul><li>Work ethic </li></ul><ul><li>Positive attitude </li></ul><ul><li>True interest in subject matter </li></ul><ul><li>Knowledge of subject matter </li></ul><ul><li>Ability to network </li></ul><ul><li>Humility </li></ul><ul><li>Sense of humor </li></ul>
  17. 17. Case Study Tishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust -$13.5 billion-
  18. 18. Questions
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