Leveraged Breakdowns

A real estate private equity career path will put you face-to-face with uncertainty. You’ll never have perfect information. And even if you do, you will never have a crystal ball. Even the best laid plans can fall to waste against an uncertain future . Many incredibly talented investors were caught off guard by industrial’s precipitous rise and retail’s dramatic crash. That said, some investors consistently (and statistically significantly) outperform others . This begs the question - what real estate private equity skills set the best investors apart from the pack? Diligence Diligence means you leave no stone unturned. You push every question to the furthest conclusion possible, until you’ve reached the best possible answer you could hope for. For instance, you should understand every in and out of a ground lease before building a buyout model. If you’re forecasting taxes, you should know the millage rate, assessment ratio, and propensity of reassessment at entry and exit for the ju...

Learn with Leveraged Breakdowns Eager to learn how to build real estate private equity models? Are you preparing for an upcoming interview? Are you competing for limited REPE roles as a complete outsider, and are looking for an edge against insider candidates? Look no further than Leveraged Breakdowns! We are megafund insiders offering courses and interview guides to boost your performance in the cutthroat REPE interview process. Introduction One of my students recently asked me the four questions below. These center on the recruiting process into real estate private equity firms as it compares to general private equity. The student asking the questions currently works in Investment Banking at a decent shop. If you’re a college student trying to get straight into REPE, this Q&A may be a bit less relevant. Does the recruiting for REPE funds (ex. Brookfield, Starwood, AEW) or RE investing arms of megafunds / institutional investors (ex. Caryle, PGIM RE) follow the same timeline ...

Introduction Networking calls serve two purposes: reconnaissance and personal branding. And here’s what they aren’t meant for: asking for a job. You’re free to take the bait if they set it, like mentioning opportunities at the firm or asking if you’re going to apply for an internship or a full-time career in real estate private equity at their firm. But let me repeat this - networking calls are for you to learn about the firm and improve your brand, not directly ask to get hired. The topic of being hired will come up when it’s relevant. So on reconnaissance and personal branding, what exactly does that mean? Learn with Leveraged Breakdowns Interested in a career in real estate private equity? Have an upcoming real estate private equity interview case study? Check out all the great resources that Leveraged Breakdowns has to offer . We have a 41-page technical interview guide, ~9 hours of megafund-investor-instructed video courses, and plenty of free resources to get you started. A...

Real estate equity investments are made by anybody with the money to do so. You could be a single individual investing out of a personal LLC, a family office, a multinational corporation, a specifically structured real estate investment trust, or a real estate private equity fund. At leveraged breakdowns, we focus pretty specifically on the real estate private equity funds space. But when you’re bidding on an asset, you’re competing against anybody with the capital to buy whatever you’re interested in. Thus, demand from other investors is a key driver of private equity real estate returns . Macro Influences Real estate equity investment are just as influenced by macroeconomic trends as any other sector. The trend we care most about is returns. Let’s say you have a pension fund that absolutely must hit 8.0% growth per year. If low-risk corporate bonds are yielding about that much, then you’re happy parking your capital there. But if bond yields start to drop, you need to find another...

How does a real estate private equity bid process work? When a company decides to sell itself, or a portfolio of its assets, or something else, how does the process take shape? This post will seek to provide a high-level overview of a common feature of investment-focused real estate private equity jobs : the bid process. No two bid processes are exactly the same, but they’re all quite similar. So first, let’s think of who the seller might be. Public Company Seller First option, the seller could be a public company whose board of directors has decided it is time to search for “strategic alternatives.” Whenever a public company says it is going to search for strategic alternatives, it just means it is trying to sell itself. There are a number of reasons why a company might try to sell itself. Perhaps it has backed itself into a corner with too much leverage. Perhaps it believes the public markets are not valuing it highly enough, and a bidder might take the whole thing out for a nice ...

Introduction The work cycle of a real estate private equity investment team is to screen as many investment opportunities as possible. Most investments aren’t worth the time it takes to analyze them, but occasionally a few of them will catch your eye . For those opportunities, you will need to create a real estate private equity model and investment memo. This post will teach you how a real REPE investor would structure the executive summary of such a first-round investment memo. Structure An investment memo typically has three levels to its structure. First, the executive summary . The executive summary should explain the entire investment . It’s like the table of contents for the whole idea, but with sentences instead of page titles. The executive summary should present the investment’s conclusions, not necessarily the entire rationale. The pages after the executive summary will answer the “why” in greater detail, whereas the executive summary should just quickly explain the “...

Introduction Leveraged Breakdowns offers the best real estate private equity course . We are megafund insiders who know a thing or two about the investments process. With over $10B of closed acquisitions, we have experience with everything ranging from asset-level purchases to public company take-privates. If you’re looking to understand the real estate private equity game, there is no better place to start than with Leveraged Breakdowns. This post in particular will focus on some core Excel tips to boost your own real estate private equity skills. These are some basic things but are helpful for any beginner to master, especially since you’ll be spending hundreds of hours each month in Excel. Don’t Touch that Mouse! You should learn to model in Excel with every shortcut available. If you have to touch the mouse to do anything, you’re probably doing it wrong. You should be able to navigate excel entirely with your keyboard. Below are some helpful navigational tips, but the list go...