Leveraged Breakdowns

Real Estate Private Equity Interview

Case Study: Blackstone Acquisition of QTS Realty Trust

Summary/Transaction Details On June 7th, 2021, public data center REIT QTS announced that it had agreed to be acquired by Blackstone for $78 per share cash in a take-private deal. The $78 price represents a 21% premium to the stock price at the prior close and a 24% premium to the 90-day volume weighted average …

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Brain Teasers in Real Estate Private Equity Interviews

Introduction Brain teasers are an important topic in our coverage of real estate private equity for beginners. They show up quite often during interviews, though they may not always touch upon real estate-specific concepts. Categorically, they’re not the same as the other technical questions in our comprehensive guide. In fact, I consider brain teasers to …

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Behavioral Real Estate Private Equity Interview Questions

Behavioral vs. Technical Questions Real estate private equity interview questions can be generally categorized as technical or behavioral. Broadly, behavioral questions ask who you are (subjective/qualitative) and technical questions ask what you know (objective/quantitative). As with Liberal Arts versus STEM, the ways in which you are tested vary. Technical questions probe your mastery of a …

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Preferred Note Case Study, Part Two: Levered Cash Flows

When we model this preferred equity structure, we first need to consider the joint venture. The joint venture is the genesis of the cash flows, after which the preferred and common will split their share accordingly. So what does this joint venture look like? Pay close attention – cash flow modeling is one of the …

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Real Estate Private Equity Interview Prep: The Capital Stack

The following real estate private equity interview questions should be practiced deliberately as if you were answering in-person in front of a real investor. The focus of these questions is on the capital stack and how it relates to net asset value, seniority, and return expectations. These are basic concepts to master before your next …

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REPE Interview Prep: Pro Forma Interview Questions, Part Two

This is the second part of the real estate private equity interview prep series focusing on property pro formas. The first part of this series can be found here. You must understand these questions cold before beginning any real estate private equity interview process. Walk me through an office pro-forma The revenue side of an …

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What Do REPE Firms Look For In New Hires?

One of the most common questions we get at Leveraged Breakdowns deals with getting inside the head of the hiring manager during a real estate private equity interview. What are they looking for? What questions will they ask? It is very natural to dwell on the “what” part of the real estate private equity interview …

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CMBS Basics, Part Two

Commercial Mortgage Backed Securities (CMBS) play a significant role in providing liquidity to the commercial real estate market. In many ways, CMBS issuance is a bellwether for the overall health and liquidity in the commercial real estate market. During the Great Recession, CMBS lending essentially stopped for several years, and the first issuers back into …

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A Beginner’s Guide To Commercial Leases, Part Two: Expenses

Commercial leases are the backbone of the REPE industry. Demonstrating a familiarity or a mastery of the terminology will help you nail a real estate private equity interview. Part one of this series focused on understanding the terminology in commercial leases related to income. Part two will zero in on the expense side of the …

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Real Estate Investment Case Study Challenge #1: Solution Step 3

Introduction This is the third and final step in solving the inaugural real estate investment case study challenge. This solution teaches you how to build a typical real estate private equity model used in one-hour on-site case studies. This is a basic model that you should be able to build from scratch without referencing anything …

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