A few months ago, I published part I of a series of posts that walk through the interview process with real estate private equity firms. Part I covered the first two interviews. In part II, my buddy covers the 3rd and 4th round interviews.

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Round 3: The Technical Test

As discussed in Part I, the beginning rounds of the interview process are intended for the company to get to know your background and most importantly your personality. Since private equity shops run a lean operation, it is essential that your interviewers feel that you fit in well not only with the group, but with the company culture as well.

In most cases, you will be asked to take an Excel and/or ARGUS test. Study the company’s portfolio.  This is important because your test will most likely involve a property type that the company already invests in.

When I was scheduling my third round interview, the company informed me that I would need to allocate about 4 hours for the interview. I would be given an excel test and an ARGUS test.  I would be given 1.5 hours for each test. I was also told that at the end of the test, I would be presenting my results to individuals in the group and walking them through my analysis and assumptions.

I was then lead to an empty office with nothing more than a laptop and a notepad. The associate told me that the first part of my test will be in ARGUS and handed me an offering memorandum. It was a retail property anchored by a major tenant with ten in line tenants. The company wanted me to come up with a value for the property. The only information you receive will be in the offering memorandum. Using the rent roll and operating statements provided, you will have to use your fundamental knowledge of real estate to come up with the appropriate assumptions. If you are given an ARGUS test, there is a strong possibility that it will be a retail or office property. If the company that you’re interviewing for also invests in industrial properties, be prepared for that as well. Pay particular attention to reimbursement methods. Also, double-check all inputs (i.e. if you’re entering rent, make sure its $/SF/Year and not $/Area). ARGUS is one of those programs where one tiny mistake can throw off your entire analysis. You may be given debt on the property so be prepared to model that in ARGUS as well.

Please be aware of the time. You will have to demonstrate your efficiency and accuracy during the time allocated for the test.

After my analysis was completed, I was asked to print out seven copies of the ARGUS cash flow. As I handed the printouts to the associate, I was then given the second part of my test.

In Excel, build a model from scratch to determine the value of a multifamily property. Again, an offering memorandum was given and I had 1.5 hours to complete my analysis. While all property types can be tested in Excel, due to time and number of tenants involved, Excel is normally reserved for multifamily and hotels (if hotels are part of the company’s portfolio). I was also asked to provide a loan schedule and calculate the levered and unlevered IRR of the investment given certain investment parameters (there are instances where you may be asked to provide a promote waterfall as well).

After completing both tests in ARGUS and Excel, I was lead into a conference room where I sat across the table from six members from the team. Their positions ranged from analyst, associate, AVP and director. Each individual had a copy of my analysis in ARGUS and Excel and proceed to review the cash flows. The idea is to explain your rationale and walk them through your analysis and providing intelligent explanations as to why you thought that the assumptions you used made sense. After spending about 20-30 minutes on each analysis, I was asked if I would recommend that the company invest in the two properties. I provided my recommendation and at that point, it was revealed to me that two assets I just analyzed belong to the company’s portfolio. As I stated earlier, be familiar with the company’s assets if that information is available. You might feel you’ll be at a disadvantage since your interviewers already know the property, but the key is to show them you can provide a thoughtful analysis.

As you can imagine, this was by far, the most intense round of the interview. They told me they’ll discuss the results of my analysis amongst the group and will be in touch with me shortly.

Round 4: The Final Round

The next day, the company called me to inform me that they would like me to meet the managing directors of the company. This was a big relief as I was unsure of my technical test since no feedback was given during the last round. I didn’t know what to expect going through the last round as I’ve interviewed with more than half of the group during the first three rounds. I met with three of the MD’s separately and this round was the least intense of the three. At this point, it was more about the MD’s getting to know my background and who I am.


In total, my interview process lasted about 1.5 months. I received a call from HR the morning following my final round interviews and was extended an offer to join the company. After negotiating the terms of my offer, I gladly accepted the position.

While the process was long and at times, stressful, the move has been rewarding and definitely worth the time and effort.

As you can see, the interview process with real estate private equity companies is arduous. Firms are not only looking for the sharpest guys in the business, they want people who fit in with the company culture. Stay tuned for parts III and IV.

Download the ASotREG Guide to Starting a Career in Real Estate Private Equity
Click here to get the guide now!