Commercial Real Estate Modeling
How much are REPE Analysts/Associates actually building a model from scratch? I work at a brokerage shop, where we have a template we always use and modify. Job descriptions for the principal side always mention "create" or "from scratch". I figured they would have standard model they can plug into, similar to a brokerage shop, and be able to modify/expand from there as needed if a deal is a bit more involved? Curious about the level of modeling expected of analysts/associates on the REPE side.
Based on the most helpful WSO content, the level of modeling expected of analysts/associates on the REPE side can vary. Here are some key points:
Model Creation vs. Familiarity:
Practical Application:
Skill Utilization:
Value Drivers and Assumptions:
In summary, while the ability to build models from scratch is valued and sometimes necessary, much of the day-to-day work involves using and modifying existing models to fit specific deal requirements.
Sources: What do REPE and Developers look for in IS analysts/associates?, Excel Model Creation Vs. Modeling Experience Importance in REPE, Scared Shitless: How Did You Actually Learn How To Competently Build Financial Models, Q&A - IB Analyst > Development Analyst > REPE Associate / VP, Modeling as a professional vs. as a student
Fellow brokerage analyst here. My understanding is that unless it's an extremely small shop, you are always using existing models. There is no real reason to build much from scratch, but the knowledge helps for when you have to manipulate existing models for custom analyses.
Appreciate the feedback, and makes sense to me. Thinking about making the jump so want to make sure I am not surprised by the expectations.
I'm a REPE analyst at a small shop (<20 people). I've had to either build my own models/templates from scratch or repurpose other people's old models. We do all asset classes and some creative deal structures so a lot of models are purpose-built rather than cookie cutter. Larger firms may have whole teams just dedicated to making proprietary model templates though so depends where you go.
I’ve worked at a few different shops. Larger shops always have well built out templates with toggles and multiple options. It’s really not even like modeling honestly it’s just data entry. Smaller shops where you work on different kinds of deals (1 deal could be a construction loan, the next could be a condo development) you tend to get more hands on modeling experience and learn way more
This
Serious question to analysts and associates: is excel still the only/best available option for creating a dynamic and complex financial model?
I am curious to know what new tools are out there.
I think some places use ARGUS DCF for their modeling, but excel remains as the industry staple
The other guy that replied to you saying "some places" use ARGUS is crazy... pretty much any decent company is going to use ARGUS to model income-producing commercial assets down to NOI and capex/leasing costs, then drop the export into an excel model and run debt and waterfalls in there. If you show up at a company and they are running analysis on retail, office or industrial assets in excel (except development projects), run for the hills.
Also ARGUS Enterprise is the standard today, DCF is outdated.
Ability to create from scratch is to have confidence that you will be able to dissect existing models and make modifications to fit a certain deal quickly and efficiently. It's very rare that you are truly building one from scratch unless you're at a very small company.
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