Acquisitions interview questions

The first technical in any real estate interview.

Define a cap rate. A building generates $8m of NOI and trades at a 5.0% cap rate. What is it worth? What makes cap rates move, and why is a lower cap rate not automatically better?

The first framing question in any real estate interview.

Explain the four real estate investment strategies. What returns does each target and where does the return come from?

Tests a candidate's ability to distinguish a property's headline rent from the revenue it truly collects.

An apartment property has $2.0m of gross potential rent, 8% economic vacancy, $90,000 of concessions and $60,000 of other income. Calculate effective gross income and explain why an acquirer cares about the distinction.

An entry-level market diligence question for an acquisitions analyst.

You are considering a 250-unit apartment building. The submarket has 5,000 existing units, 300 vacant units and 750 units under construction delivering over the next year. What would you investigate before assuming the…

A first-round real estate acquisitions question testing whether a candidate can organise an investment case.

You have ten minutes to recommend whether your firm should keep pursuing an apartment acquisition. What are the first things you would put in the investment summary?

A common screen in multifamily acquisitions interviews where candidates must avoid relying on one valuation shorthand.

Two 100-unit apartment buildings each trade for $20m. Building A has $1.2m of NOI and Building B has $900,000 of NOI. Calculate each cap rate. Why is price per unit alone not enough to decide which property is cheaper?

The underwriting exercise behind every value-add acquisition.

You're buying an office building at $8m in-place NOI and underwriting $11m stabilised. Build the bridge and tell me which components you trust.

A standard investment committee follow-up after an analyst presents a base-case return.

Your model shows a 16% levered IRR on a value-add deal. Which sensitivities would you show investment committee, and how would you distinguish a real downside case from arbitrary spreadsheet toggles?

Determines how much of a property's income is actually predictable.

Explain triple net, modified gross and full service leases. Which produces the most predictable NOI, and how does that affect valuation?

A live underwriting exercise testing whether an analyst can turn transaction data into a credible bid range.

You have three comparable office sales, but one has a long lease to an investment-grade tenant, one is 25% vacant and one includes a parking garage with separate income. How would you use them to value a 10% vacant…

Tests how an acquisitions analyst directs limited diligence time before a bid deadline.

A seller gives you three weeks before a best-and-final bid on an industrial property. How would you prioritise diligence, and what findings could change your price immediately?

A real estate acquisitions case tests whether a candidate can turn a rent roll into a forward NOI view.

You are underwriting a $60m suburban office acquisition. Its trailing NOI is $4.2m, but the tenant representing 35% of rent expires in 14 months and pays $42 per square foot. Recent signed leases in the building's…

Sector selection matters more than asset selection in real estate, interviewers probe the reasoning.

Compare multifamily, industrial, office and retail as investments. Why do their cap rates differ, and what drives each?

A real estate deal-auction simulation balancing price, certainty, diligence and the discipline to walk away.

You are bidding on a logistics portfolio with strong initial interest. Decide price, structure and conditions as competing bids arrive and diligence weakens the rent story.

A real-estate acquisitions live case testing rent-roll analysis, leasing assumptions and bid discipline.

You are underwriting an office acquisition for a value-add real estate fund. New leasing information arrives before the bid deadline. Decide what to underwrite at each stage and prepare the investment committee…

A real estate acquisitions data-room case using a rent roll, debt quote and capital plan.

You are underwriting a suburban office acquisition. The broker markets a 7.4% going-in cap rate. Review the data-room extracts and decide whether the yield is real.

The economics of every real estate deal and every sponsor's compensation.

Explain how leverage drives real estate returns, and walk me through a typical promote waterfall between a sponsor and its limited partner.

A final-round acquisitions exercise tests whether a candidate can protect value when a supposedly clean closing has unsettled operating items.

You have agreed to acquire a $85m retail centre. Three days before closing, the seller reports $1.2m of unpaid tenant receivables, $900,000 of prepaid annual property taxes, and a signed tenant termination that starts 20…

An offer-ready investment committee case requiring a candidate to defend price discipline in a competitive process.

A seller wants $100m for a property. Your base case produces a 14% IRR at $94m, while $100m produces 11%. Your fund's minimum is 13%, but you believe another buyer may pay $100m. How would you recommend a bid?

A real estate private equity analyst preparing a bid recommendation for a value-add multifamily acquisition.

You are underwriting a 280-unit multifamily acquisition before bid day. Review each data-room release, select the next action, and submit an investment recommendation with price discipline.

A senior real estate interview case testing whether a candidate can separate cheap basis from a durable office thesis.

A 1980s downtown office building is offered at a 55% discount to its 2019 price. It is 45% occupied, requires $25m of capital expenditure and sits near newer amenitised buildings. Would you pursue it?