I just posted video #5 in my “Real Estate Private Equity Modeling Test” youtube series. I took a real estate modeling test from a large RE PE shop and I’m solving it one video at a time.
As I go, I’m finding mistakes. The test is screwed up.
For example, it states that there are two tenants which are 53,000 SF and 83,000 SF. Then, it says the building is 139,000 SF. At the risk of stating the obvious, 53 + 83 is not 139. Normally, I’d pass that off as the test builder wanted to account for the lobby, but then, the same test asks for the unleveraged cash flow in the event of refinancing. This sort of thing makes me think that the test builder was just sloppy.
If the test that you use to vet incoming analysts has errors, what does that say about the organization’s commitment to quality?