A real estate private equity interview is a practical exam: can you protect capital, price risk, and show a clear path to returns with terms that hold up? Underwriting is the act of turning leases, costs, and debt into cash flows and probabilities. An investment committee is the gatekeeper that asks, “Where can this break, and what gets us paid anyway?”
What the interview tests is decision quality under pressure. You will be asked to trade off price, plan, leverage, and structure, then defend the result. Expect tight questions, time-boxed modeling, and case prompts that force you to show your work and your judgment.
Role expectations that shape the questions
Interviewers anchor questions to how the role drives value. Acquisitions roles look for sourcing logic, price discipline, and debt and JV structures that close and perform. Asset management roles look for cash control, leasing and capex execution, lender engagement, and workout tactics that lift NOI. Capital markets roles test debt math, hedging, and intercreditor dynamics. Fund roles test LP reporting, valuations, and compliance, and assume cross-knowledge among these lanes.
Market markers you must translate into returns
Strong answers cite current data and convert it into entry yields, coverage ratios, and exit paths. For instance, U.S. commercial property prices fell roughly 21% from peak by Nov-2024 according to Green Street. Explain how that repricing changes entry yields, re-trade dynamics, and rescue capital pricing. The 30-day average SOFR was 5.33% in Dec-2024 per the NY Fed. Turn base rates into all-in coupons, debt service coverage, and refinance risk. CMBS delinquencies were 4.66% in Nov-2024 per Trepp. Use that to frame lender timing, special servicer posture, and discounted payoff math.
Core competencies to demonstrate without notes
- Property mechanics: Show rent roll drivers by asset type, lease economics, expense recoveries, capex programs, and clear paths to a stable NOI.
- Capital stack: Size proceeds and constraints across banks, life companies, CMBS, debt funds, and mezz; cover covenants, carve-outs, and intercreditor friction points. For an overview of structures and fees, see this primer on structures, strategies, fees, and returns.
- JV structures: Compare preferred vs. common equity, promotes and catch-ups, clawbacks and lookbacks, major decisions, transfer rights, and buy-sell mechanics.
- Fund structures: Explain LPA economics, fee stack, key-person and excuse rights, recycling, warehousing, co-invests, side letters, and valuation policy.
- Documentation: PSAs, loan agreements, JVAs, SNDAs, estoppels, and management and leasing agreements that govern execution.
- Accounting: Fair value under ASC 820, impairment indicators, consolidation and VIE tests, and NAV packaging for LPs.
- Tax and rules: FIRPTA, blockers and REITs, carried interest Section 1061, SEC marketing rule expectations, AIFMD II updates, and Corporate Transparency Act filings.
How interviewers probe your judgment
Strategy and market selection questions that force trade-offs
- Office-to-resi conversion: Tie zoning feasibility, conversion cost per foot, natural light and parking constraints, and rent comp depth to a plan with bounded capex and lease-up risk under lender covenants.
- Marginal lender ID: If asked who is the marginal lender at 55% LTV and DSCR 1.35x, convert base rates to coupons and show how proceeds and covenants differ across a bank, an agency, and a life company quote.
Asset underwriting shifts that change price
- 1980s suburban industrial: Elevate roof and slab condition, truck court geometry, and tenant specialization; quantify downtime, TI and LC, and capex leakage by year.
- Power constraints in office: Convert available load to capex ranges and show how demand charges and panel upgrades change net effective rent.
Debt and liquidity choices under stress
- Breached floater with 18 months left: Lay out a rate cap extension, partial paydown, added recourse, A/B split, and near-term NOI actions. State how each changes exit paths and timing.
- Amortization and sweeps: Trade sponsor give-ups for evidence like capex completion, pre-leasing, and tighter reporting. Show cures, costs, and timing.
JV math and control that keep alignment
- Three-tier promote build: 8% pref; 70/30 to 12% IRR to LP; 60/40 thereafter; with a GP catch-up. Define compounding, day count, whole-of-deal vs. deal-by-deal, and clawback mechanics. Explain escrow and timing of true-ups.
- Major decisions at 90/10: Require unanimous consent for refinances, budgets, affiliate contracts, material leases, large capex, and sale. Tie to deadlock and buy-sell mechanics.
Documentation that protects closing and execution
- PSA reps that matter: Compliance with laws, tenant estoppels, arrears, environmental, and service contract assignments. Use holdbacks or price adjustments to close gaps.
- Loan leasing killers: Limits on forms, free rent, brokers, and transfers. Pre-negotiate a leasing plan or defined buckets with notice rights.
Accounting, valuation, and policy controls
- ASC 820 marks and impairments: Use exit price, justify input levels, and calibrate to binding offers and broker opinions. Distinguish held-for-sale treatment and cite committee oversight.
- JV formations and ASU 2023-05: Measure at formation date and recognize noncash contributions appropriately.
Tax and rule-of-the-road that avert surprises
- FIRPTA for non-U.S. investors: Manage with domestically controlled REITs or blockers; explain shareholder composition controls and ECI and UBTI exposure.
- Regulatory posture: After the Fifth Circuit vacated the SEC’s 2023 private funds rule, exams still focus on fees, expenses, side letter parity, and transparent reporting. Act as if scrutiny remains.
- CTA and AIFMD II timing: CTA filings started in 2024; many SPVs must report beneficial owners. AIFMD II modifies delegation, liquidity, and loan-originating rules in the EU.
Modeling under pressure: build clean, prove integrity
Acquisition model for stabilized or light value-add
- Timeline and inputs: Build a single-asset underwrite from close to exit. Keep inputs modular: rent roll, growth, downtime, TI and LC, R and M and reserves, taxes, insurance, utilities, and inflation.
- Debt and metrics: Show proceeds, rate type, amortization, fees, and reserves with a sources and uses that foots. Include DSCR, debt yield, and LTV at close and exit.
- Returns and audit trail: Report unlevered and levered IRR and MOIC. Tie the waterfall to realized distributions and leave a transparent audit trail.
Development model that respects the calendar
- Budget and carry: Lay out hard and soft costs, contingencies, interest carry, and draws against an S-curve or percent-complete timeline.
- Lease-up and finance: Cap absorption by unit type and market depth. Finance with senior construction debt and, if needed, mezz or pref. Model interest reserve burn and completion guaranty effects.
Floating-rate debt with a rate cap
- All-in rate: Show cap premium as an upfront cost, payoff at strike, and effective all-in rate tied to SOFR. Run base rate scenarios and watch DSCR, covenants, and extension tests. For refresher math, see this concise mental math guide.
- Extensions and triggers: If there is an extension, code tests and fees. Show break-even NOI to earn the extension under a downside.
Minimal JV waterfall you can explain in 60 seconds
- Simple base case: LP 90%, GP 10%. 8% preferred return compounding annually. Return capital, pay pref, split 70/30 until LP hits a 12% project IRR, then 60/40.
- Catch-up and clawback: If there is a catch-up, send 100% to GP until it equals the 70/30 share it would have earned, then resume 70/30. Implement a whole-of-deal clawback or require a fund-level true-up.
Sensitivity and scenario testing that mirrors lender behavior
- One-way and two-way: Test exit cap, rent growth, downtime, capex overruns, and base rates. Run two-way exit cap vs. rent growth and base rates vs. NOI ramp.
- Integrity checks: Sources and uses balance, no circularity, stress by zeroing a revenue line or stepping capex up by 25%. For interview-style checklists, see a succinct real estate interview guide.
Packaging a case so IC can approve
Many prompts ask you to underwrite a 1980s industrial deal in a secondary market with a 24-month plan, then deliver an Excel model, a 3 to 6 page memo, and one slide with headline metrics. Your memo should answer the investment question directly and show the path to value creation.
Memo that works in the room
- Recommendation: State yes or no with conditions. Lock price, leverage, and minimum returns.
- Market and competition: Compare in-place rent to replacement cost, pipeline supply, tenant depth, concessions, and comparable trades.
- Business plan: Sequence leasing steps, capex by project, and milestones that unlock value.
- Underwriting: Show an NOI bridge from in-place to stabilized and explain expense normalization and lease economics.
- Capital structure: Detail debt source and terms, covenant headroom, cap or swap plan, fees, JV promote, major decisions, and alignment.
- Returns and risk: Present levered and unlevered IRR and multiple, equity paydown horizon, break-even exit cap, and two-way exit cap vs. rent growth.
- Execution plan: Provide diligence list, 100-day plan, lender outreach, vendor engagements, and contingency triggers.
Document literacy in minutes
- Lease abstract: Base rent, escalations, recoveries and caps, termination rights, assignment and sublease, co-tenancy or go-dark, exclusives, and SNDA obligations with quantified NOI leakage.
- Loan term sheet: Proceeds tests, reserves, draw conditions, recourse triggers, and negative covenants that constrain leasing. Propose pre-approved leasing guidelines.
- JV term sheet: Capital calls, default remedies, promote math, major decisions, ROFO and ROFR, transfer limits, and related-party controls with narrow for-cause GP removal and defined due process.
Governance, failure modes, and how to avoid them
- Structural weak spots: Loose cash controls bleed coverage; JV rights that block execution; loan docs with leasing limits that choke value-add plans.
- Counterparty risks: Recourse through carve-outs, guarantor bandwidth, capital call enforceability, and servicer capacity with realistic timing.
- Enforcement realities: Foreclosure timelines, receivership, A and B note restructurings. Offer jurisdiction-aware steps, not slogans.
- Step-in rights: For pref, define step-in upon monetary default or milestone misses; for mezz, understand UCC sale mechanics and intercreditor limits.
Structures and timelines to compare quickly
- Equity vs. preferred vs. mezz: Preferred can be faster and flexible when control rights mimic loan protections without breaching senior restrictions; mezz has clearer enforcement but heavier intercreditor work.
- SPV vs. platform holdco: Single-asset SPVs compartmentalize liabilities and ease financings; holdcos capture operating synergies and scale but complicate debt and reporting.
- Fund vs. separate account vs. co-invest: Funds offer diversification and process; separate accounts tighten mandates and often reduce fees; co-invests move fast and demand ready-to-use underwriting.
- Fast execution timeline: Day 0 to 1 – load data, define thesis, set target capital structure, verify rent roll and financials, and frame the model. Day 1 to 2 – build the underwrite, reconcile to bank statements if provided, quantify risks with dollars and dates, draft JV waterfall and debt terms. Day 2 – run sensitivities, finalize memo and one-page dashboard, list open items and conditions precedent. Day 3 – line up vendors, rank lenders, map estoppels and SNDAs, and list 100-day tasks and draw process.
Pitfalls and kill tests you should state out loud
- Common pitfalls: NOI that moves without lease terms, downtime, or capex timing behind it; waterfalls with hidden time conventions; plans that ignore covenants; unpriced environmental, structural, or power risks; exit math that ignores recurring capex and sale costs; and JV governance gaps without clawback or clear capital call remedies.
- Kill tests before recommending: Sources and uses foot and tie to schedules or contracts; covenant headroom survives the downside with cures and costs defined; promote pays the GP under base and downside without perverse incentives; and exit liquidity exists at realistic cap rates and buyer debt terms.
Two-week prep that actually works
- Build models from scratch: Produce a clean single-asset model, a development model, a SOFR cap-aware debt schedule, and a JV waterfall – error-free in under two hours.
- Draft two IC memos: Use public OMs and comps and ask a peer to red-team the risk section. For role expectations, this analyst skills checklist keeps you honest.
- Track market terms: Read one debt market update, one valuation policy, and one JV term sheet per week and track lender covenants and fees.
- Review key rules: Revisit ASC 820 and ASU 2023-05 summaries, SEC exam risk alerts on marketing and fees, FinCEN BOI rules, and AIFMD II synopses. For context on the field, skim a primer on real estate private equity and common career paths.
What strong looks like to an investment committee
Top candidates make a call with conditions, size the few risks that move returns, and show an auditor-friendly model. They read documents and uncover constraints before they become broken assumptions. They explain structures and fees in ways that protect LPs and align counterparties. They use market data to bound outcomes and build hedges, reserves, and governance that survive the downside.
Fresh angle: a 5-minute scoring rubric to self-check
When you finish a case, grade yourself like an investment committee would. First, underwriting clarity: can a reviewer trace every dollar from assumptions to outputs in two clicks? Second, covenant realism: do DSCR, debt yield, and LTV stay within lender behavior at today’s SOFR and spreads? Third, execution calendar: are leasing, capex, and draw timing coded to the month with float identified? Fourth, alignment: do JV promote and control rights align incentives in the downside? Fifth, exit proof: does the buyer’s debt stack make your sale price financeable? If you cannot answer yes to four out of five, iterate once more before you submit. For interview-style resources, this overview of structures and fees helps tighten explanations.
Closeout and records that stand up later
Treat deal files like regulated records. Archive the index, versions, Q and A, users, and full audit logs; hash the archive; apply retention; require vendor deletion with a destruction certificate; and remember that legal holds override deletion orders. That discipline shortens audits and protects processes when deals get reviewed years later.
Key Takeaway
Great REPE interview performance is simple to describe and hard to fake: convert market facts into financeable plans, model cleanly with covenant headroom, align JV economics to the downside, and package a memo that answers the investment question in one page. If you do that, you will sound like a colleague, not a candidate.