As a entry level commercial real estate investment analyst, you would support senior analysts and associates in analyzing potential commercial real estate investments. This is an important role that provides exposure into how investment decisions are made in commercial real estate private equity firms, REITs, or real estate investment banks. Key responsibilities include conducting market research, financial modeling, preparing presentations and investment memos, and supporting due diligence efforts. Typical qualifications required for these roles include real estate and finance coursework, financial modeling skills, strong analytical abilities, and attention to detail. This article will outline in further detail the typical duties and background required to be competitive for entry level commercial real estate investment analyst roles.
Conduct industry and market research on trends, fundamentals, and deals
As a junior commercial real estate investment analyst, you would be responsible for researching market trends, dynamics, and active deals relevant to potential investments your firm is evaluating. This includes analyzing market reports, economic data, rents, vacancy rates, absorption, cap rates, comparable deals, tenant information, and other real estate fundamentals across various property types like office, retail, multifamily, industrial, etc. The market intelligence gathered through your research will help inform acquisition models and investment recommendations.
Prepare financial models valuing potential deals and assets
You will build detailed financial models projecting cash flows, returns, IRRs, capitalization rates, net operating income, debt service coverage ratios, and other metrics to quantify the potential value of real estate investments under consideration. Models will leverage your market research and make assumptions on key drivers like rental income growth, occupancy rates, operating expenses inflation, exit cap rates, debt terms, and more. Your models will take into account property specifics and help senior team members evaluate potential deals.
Analyze deals and prepare investment memos and presentations
As an entry level analyst, you will synthesize your financial models and market research into investment memos and presentations evaluating potential commercial real estate deals on factors like valuation, risks, market upside, alignment with fund/firm strategy, capital needs, and relative value vs other deals. These materials getting presented to investment committees and clients will showcase your ability to articulate insights from complex analysis into a compelling viewpoint on a deal’s merit.
Support due diligence and closing process for investments
You will also play an important support role in the due diligence process for deals moving closer to commitment. This includes coordinating site visits and property tours, speaking with vendors, reviewing leases and legal documents, confirming property details like occupancy rates and rental collections in place. As deals reach closing stage, you will also assist with organizing closing checklists and documentation while coordinating across internal and external parties involved.
In summary, as an entry level commercial real estate investment analyst you can gain tremendous exposure into how CRE investment decisions get made while developing modeling, research, communication, and deal execution skills. It is an excellent stepping stone for aspiring real estate private equity professionals.