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Working in Real Estate Finance. Introduction . Real Estate Finance Industry Overview IB and PE Summer Associate Perspectives Bank of America Case Study Tishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust for $13.5 billion. “Real Estate Finance” Industry Overview.

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Working in Real Estate Finance

Introduction l.jpg

  • Real Estate Finance Industry Overview

  • IB and PE Summer Associate Perspectives

  • Bank of America Case Study

    • Tishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust for $13.5 billion

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“Real Estate Finance” Industry Overview

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Industry OverviewInvestment Banking

  • Real Estate Investment Banking

    • Lead equity and debt placements

    • Advise on sale of real estate portfolios and assets

    • Provide general advisory services to public & private companies

  • Typical Role of Real Estate Investment Banker

    • Advise on M&A transactions

    • Pitch deals to clients

    • Create offering memorandums

    • Market portfolios to prospective buyers

    • Negotiate transactions

    • Perform due diligence for acquisitions

    • Serve as a liaison between the capital markets team and clients for debt and equity transactions

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Industry OverviewPrivate Equity Funds

  • Assemble capital from institutional investors, pension funds, and wealthy individuals

  • Structured as limited partnerships (typically)

  • Invest in such things as:

    • Real estate and mortgage instruments

    • Single assets

    • Real estate portfolios

    • Real estate companies

  • Types of real estate private equity funds:

    • The Blackstone Group, Apollo, Fortress

    • Wall Street Merchant Banks: MSREF (Morgan Stanley), Whitehall Funds (Goldman Sachs)

    • Colony Capital, Starwood Capital Group

    • Cherokee Partners, Cypress RE Advisors, Beacon Capital

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Industry OverviewAlternative Careers

  • Pension funds – Advise funds on real estate investment opportunities

  • Corporate Banking – Assist local developers with obtaining capital requirements

  • Capital Markets – Work in an industry-focused product group (high yield, derivatives, CMBS)

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Day in the Life…..Investment Banking Summer Associate

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Recruiting Process

  • Recruiting Process

    • Conducted numerous informational interviews

    • Took steps to learn more about real estate

    • Interviewed through the CMC in early January

  • Tips

    • Understand culture of each firm

    • Stay knowledgeable on the industry

    • Interviews - prepare, prepare, prepare

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Highlights of My Summer

  • ~$3B sell side M&A deal

    • Deal hopefully will be announced soon

  • $3.4B sell side M&A deal

    • Gramercy Capital Corp bought American Financial Realty Trust

  • Presented to CEO/CFO of St. Joe

  • Experienced the market’s meltdown

  • Other miscellaneous deal teams

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Typical Day

  • Typical Day

    • No day was the same!

    • ~90-100 hours/week

    • Frequent interaction with deal team leader

    • Dinner

    • “Hurry up…wait”

    • Crackberry

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Required Skills

  • Skills That I Needed

    • Excel (Training the Street)

    • PowerPoint

    • Organization

    • Communication (verbal & written)

    • Common sense

    • Balanced life

    • Positive attitude!

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What I Learned

  • Investment Banker = Financial Consultant

    • Must be proficient in finance and accounting

  • Skills I need to continue to develop

    • Becoming more efficient in Excel = more sleep

    • Capital markets and valuation knowledge

    • Real estate industry knowledge

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Day in the Life…..Private Equity Summer Associate

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Summer Highlights

  • Analyzing $1 billion-plus deals

  • Visiting properties / travel

  • Meeting management teams

  • Drafting an OM

  • Starting in a hot market & witnessing the debt markets freeze

  • Attending a major private equity conference

  • Learning about the models and investment approach

  • Learning from the other people in the firm

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Summer Associate Perspective: Working on a Deal Team

  • Identify the target (this happens under different scenarios)

  • Research the target & its industry (high level)

  • Work with an associate in creating the initial model

  • Prepare initial Investment Committee (“IC”) presentation

  • Establish next steps with the target company

  • Work through the data room and perform basic due diligence

  • Additional IC presentation

  • Meet with the management team (travel)

  • Perform extensive due diligence (travel)

  • Additional IC presentation

  • Next steps…

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Important Skills & Traits


  • Communication skills

  • PowerPoint

  • Excel

  • Financial analysis

  • Strategic analysis

  • Common Sense


  • Work ethic

  • Positive attitude

  • True interest in subject matter

  • Knowledge of subject matter

  • Ability to network

  • Humility

  • Sense of humor

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Case StudyTishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust-$13.5 billion-