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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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Presentation Transcript
introduction
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
industry overview investment banking
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
industry overview private equity funds
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
industry overview alternative careers
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)
recruiting process
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
highlights of my summer
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
typical day
Typical Day
  • Typical Day
    • No day was the same!
    • ~90-100 hours/week
    • Frequent interaction with deal team leader
    • Dinner
    • “Hurry up…wait”
    • Crackberry
required skills
Required Skills
  • Skills That I Needed
    • Excel (Training the Street)
    • PowerPoint
    • Organization
    • Communication (verbal & written)
    • Common sense
    • Balanced life
    • Positive attitude!
what i learned
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
summer highlights
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
summer associate perspective working on a deal team
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…
important skills traits
Important Skills & Traits

Functional

  • Communication skills
  • PowerPoint
  • Excel
  • Financial analysis
  • Strategic analysis
  • Common Sense

General

  • Work ethic
  • Positive attitude
  • True interest in subject matter
  • Knowledge of subject matter
  • Ability to network
  • Humility
  • Sense of humor
case study tishman speyer lehman brothers purchase of archstone smith trust 13 5 billion
Case StudyTishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust-$13.5 billion-
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