Real Estate PE
65 real estate analysis questions of the kind asked in real estate pe interviews. Each carries a model answer, the concepts a complete response must hit, and graded feedback on your own attempt.
A junior underwriting calculation that tests whether you include every required debt payment.
A multifamily property produces $3.0m of underwritten NOI. Its loan requires $1.8m of annual interest and $0.4m of scheduled principal amortisation. Calculate DSCR. If the minimum is 1.35x, does it pass?
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 cash-flow coverage fluency in real estate debt interviews.
What is DSCR, and how does a rising interest rate affect a floating-rate borrower's DSCR?
A foundational real estate development question.
What is a development spread and why does it matter?
Asked because approvals can make or break land value.
What is entitlement risk in a development deal and how do you underwrite it?
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.
Used to test whether candidates understand construction risk allocation.
What is a guaranteed maximum price contract and what risk does it not eliminate?
A basic construction budgeting question for analyst interviews.
Define hard costs and soft costs in a development budget. Why do they matter differently?
Expense reduction directly improves NOI. This tests operational management skills.
What are the common opportunities to reduce operating expenses in commercial real estate, and how do you implement them without hurting tenant satisfaction?
Tenant retention is critical to stable NOI. This tests understanding of landlord-tenant dynamics.
What strategies do you use to improve tenant retention, and how do you measure their effectiveness?
PropTech is transforming real estate. This tests understanding of technology adoption.
What technologies are impacting real estate asset management, and how do they improve property performance?
Tests whether a development candidate can connect a procurement detail to delivery and financing risk.
Your contractor says electrical switchgear has a 52-week lead time and must be installed in month 14 of an 18-month build. What does that mean for the project, and what would you do next?
Common in office and retail asset-management interviews because recoveries determine whether an apparent expense overrun reaches NOI.
In a multi-tenant office building, annual controllable operating expenses are $1.20 million. A tenant occupies 10% of the building and its lease requires reimbursement of its pro-rata share of controllable expenses above…
A first-round asset-management screen that tests whether a candidate can read beyond a headline occupancy figure.
A 100-unit apartment property is 95% physically occupied. Four occupied units receive one month of free rent during the current month, and one occupied unit is delinquent on $2,000 of monthly rent. Explain why physical…
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…
The foundational asset management question. You can't manage what you don't measure.
What are the key performance indicators you track for property management, and what do they tell you about asset health?
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 foundational underwriting question for real estate lending roles.
Define loan-to-value. A lender makes a $60m loan against a $100m property. What is the LTV, and what does it miss?
A basic real estate credit metric that lenders use alongside LTV.
Define debt yield. A property has $8m of NOI and a $100m loan. What is debt yield and why do lenders care?
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?
A first-round development question that tests whether you distinguish owning land from having the right to pursue a deal.
A developer says it has a site "under control" but has not bought it. What does that usually mean, why is it valuable, and what would you negotiate in the agreement?
A first-round question for office, industrial and mixed-use development.
Why does preleasing matter in a development project?
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?
Tests practical knowledge of how development debt funds over time.
How does a construction loan fund, and why is interest reserve important?
A development math question showing how thin spreads can disappear.
A project has total cost of $100m and stabilised value of $125m. If costs rise 10% and value is unchanged, what happens to profit margin on cost?
A practical development-analyst exercise after a monthly construction report.
A project has a $50m approved budget, including $4m of contingency. It has incurred $18m of cost, has $27m of remaining committed contracts, and the project team forecasts $8m of uncommitted cost to finish. Calculate…
Development interviews test whether you understand the risk premium being earned.
Why would a developer build a property rather than buy an existing one? Quantify the return they're targeting and name the risks they're taking.
Tests whether candidates understand development value is exposed to capital markets at delivery.
A development is expected to stabilise at $8m NOI and sell at a 5.0% cap rate. What happens if exit cap rates move to 6.0%?
ESG is increasingly important in real estate. This tests understanding of sustainability trends.
How do environmental and social governance factors affect real estate asset management, and what are the practical implications for property operations?
Refinancing can improve returns or create risk. This tests understanding of real estate finance.
A property has 5 years remaining on a 10-year loan at 5.5% interest. Current market rates are 4.5%. Should you refinance, and what factors do you consider?
Leasing is the primary value creation lever in asset management. This tests strategic thinking.
An office building has 30% vacancy with leases expiring in 6, 12, and 18 months. How do you optimise the leasing strategy to maximise value?
Capex allocation is a critical asset management decision. This tests return-on-investment thinking.
You have a $2 million capex budget for a value-add office building. How do you prioritise competing projects (lobby renovation, HVAC upgrade, parking resurfacing, amenity space)?
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?
Asked to test whether candidates understand stabilisation is a process, not a date.
How would you underwrite lease-up for a newly delivered multifamily or office project?
A practical asset-management question for construction and development lenders.
How does a construction lender protect itself after closing?
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…
A numerical land-basis question for development interviews.
A project will produce $6m of stabilised NOI. Market cap rate is 5.0%, hard and soft costs excluding land are $85m, and the developer requires $15m of profit. What is the maximum land value?
Real estate debt and acquisitions interviews both test the three sizing constraints.
A property has $8m NOI and a $160m value. A lender offers 65% LTV, requires a 1.35x DSCR and a 9% debt yield. Interest is 5.5% interest-only. How much debt do they actually lend?
An asset-management case after a reassessment creates an unbudgeted NOI shortfall.
A suburban office asset has $8.0 million of annual NOI before property tax. Its tax bill rises from $1.20 million to $1.65 million after a reassessment, while the budget assumed no increase. Comparable assessment…
Tests property-type judgement because hotel cash flow differs sharply from leased real estate.
What changes when you underwrite a hotel loan rather than a loan on a leased office building?
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…
Asset enhancement creates value beyond basic property management. This tests strategic creativity.
What are the common strategies to enhance real estate assets, and how do you determine which are appropriate for a given property?
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 sponsor-level question on promote economics in development deals.
Why do development deals often use joint ventures with promotes, and what should the capital partner watch for?
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.
A judgement question on derisking a project before completion.
Compare a forward sale of a development with building spec and selling after stabilisation.
The recurring decision an asset management team brings to investment committee.
An asset has hit its business plan two years early and could be sold today at a 20% IRR. The fund has three years left. Do you sell?
Development interviews test whether you understand the financing, not just the pro forma.
Walk me through how a construction loan is structured and drawn. What protects the lender?
Real estate debt and securitised products desks both test this.
Explain how a CMBS deal is structured. Who bears the first loss, and what is the special servicer?
Exit timing is critical to achieving target returns. This tests market timing and portfolio management.
You've owned a value-add office property for 3 years and achieved your business plan. How do you determine whether to sell now or hold longer?
Portfolio management requires thinking beyond individual assets. This tests strategic portfolio construction.
You manage a portfolio of 10 office buildings across different markets. How do you optimise capital allocation across the portfolio to maximise overall returns?
Distressed turnaround is a specialized skill. This tests crisis management and value creation.
You acquire a distressed office property at 60% of replacement cost with 40% vacancy and significant deferred maintenance. What is your turnaround strategy?
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 development analyst case sequencing entitlements, GMP procurement, financing and pre-leasing under a delayed approval.
You are the development associate for a mixed-use project. A planning delay threatens the targeted completion date and construction loan availability. Manage the critical path as new facts arrive, then send the…
The gap-funding layer that appears in most levered real estate deals.
A sponsor needs 75% total leverage but the senior lender will only go to 60%. How do you fill the gap, and how is your position secured?
The tool that turns a good real estate deal into an excellent one.
You bought a property for $100m with $60m of debt and $40m of equity. NOI has grown from $6m to $8.4m. Cap rates are unchanged at 6%. Can you refinance, and what does it do to returns?
A live asset-management case testing whether a candidate can protect both near-term NOI and exit value during a major office rollover.
A 20,000-square-foot office tenant is deciding whether to renew. The tenant offers a seven-year renewal at $52 per square foot with nine months of free rent, $28 per square foot of TI and $12 per square foot of leasing…
How a developer decides what a site is worth. And the calculation is unforgiving.
A site can support 200,000 sf of apartments. Stabilised NOI would be $9m, exit cap 5.5%, hard and soft costs $110m, and you require a 20% profit margin on cost. What can you pay for the land?
A development asset-management case after an unexpected field condition threatens a project's budget and delivery date.
During construction, the general contractor submits a $3m change order for subsurface remediation and says it will delay delivery by two months. The project has $2m of contingency remaining. How would you respond before…
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.
An investment-committee judgement case for a developer deciding between a single build and phased delivery.
You control a site entitled for 500 apartments. Building all 500 at once costs $150m and delivers in 30 months. A two-phase plan delivers 250 units in 24 months and the other 250 units 18 months later, but costs $158m…
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Firm names indicate where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with the firms named.