1. Working in Real Estate Finance

2. Introduction Real Estate Finance Industry Overview IB and PE Summer Associate Perspectives Bank of America Case Study –Tishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust for $13.5 billion

3. “Real Estate Finance” Industry Overview

4. Industry Overview Investment Banking Real Estate Investment Banking – –Lead equity and debt placements – –Advise on sale of real estate portfolios and assets – –Provide general advisory services to public & private companies Typical Role of Real Estate Investment Banker – –Advise on M&A transactions – –Pitch deals to clients – –Create offering memorandums – –Market portfolios to prospective buyers – –Negotiate transactions – –Perform due diligence for acquisitions – –Serve as a liaison between the capital markets team and clients for debt and equity transactions

5. Industry Overview Private Equity Funds Assemble capital from institutional investors, pension funds, and wealthy individuals Assemble capital from institutional investors, pension funds, and wealthy individuals Structured as limited partnerships (typically) Structured as limited partnerships (typically) Invest in such things as: Invest in such things as: –Real estate and mortgage instruments –Single assets –Real estate portfolios –Real estate companies Types of real estate private equity funds: Types of real estate private equity funds: –The Blackstone Group, Apollo, Fortress –Wall Street Merchant Banks: MSREF (Morgan Stanley), Whitehall Funds (Goldman Sachs) –Colony Capital, Starwood Capital Group –Cherokee Partners, Cypress RE Advisors, Beacon Capital

6. Industry Overview Alternative Careers Pension funds – Advise funds on real estate investment opportunities Pension funds – Advise funds on real estate investment opportunities Corporate Banking – Assist local developers with obtaining capital requirements Corporate Banking – Assist local developers with obtaining capital requirements Capital Markets – Work in an industry-focused product group (high yield, derivatives, CMBS) Capital Markets – Work in an industry-focused product group (high yield, derivatives, CMBS)

7. Day in the Life….. Investment Banking Summer Associate

8. Recruiting Process Recruiting Process Recruiting Process –Conducted numerous informational interviews –Took steps to learn more about real estate –Interviewed through the CMC in early January Tips Tips –Understand culture of each firm –Stay knowledgeable on the industry –Interviews - prepare, prepare, prepare

9. Highlights of My Summer ~$3B sell side M&A deal –Deal hopefully will be announced soon $3.4B sell side M&A deal –Gramercy Capital Corp bought American Financial Realty Trust Presented to CEO/CFO of St. Joe Experienced the market’s meltdown Other miscellaneous deal teams

10. Typical Day Typical Day Typical Day –No day was the same! –~90-100 hours/week –Frequent interaction with deal team leader –Dinner –“Hurry up…wait” –Crackberry

11. Required Skills Skills That I Needed Skills That I Needed –Excel (Training the Street) –PowerPoint –Organization –Communication (verbal & written) –Common sense –Balanced life –Positive attitude!

12. What I Learned Investment Banker = Financial Consultant Investment Banker = Financial Consultant –Must be proficient in finance and accounting Skills I need to continue to develop Skills I need to continue to develop –Becoming more efficient in Excel = more sleep –Capital markets and valuation knowledge –Real estate industry knowledge

13. Day in the Life….. Private Equity Summer Associate

14. Summer Highlights Analyzing $1 billion-plus deals Analyzing $1 billion-plus deals Visiting properties / travel Visiting properties / travel Meeting management teams Meeting management teams Drafting an OM Drafting an OM Starting in a hot market & witnessing the debt markets freeze Starting in a hot market & witnessing the debt markets freeze Attending a major private equity conference Attending a major private equity conference Learning about the models and investment approach Learning about the models and investment approach Learning from the other people in the firm Learning from the other people in the firm

15. Summer Associate Perspective: Working on a Deal Team Identify the target (this happens under different scenarios) Identify the target (this happens under different scenarios) Research the target & its industry (high level) Research the target & its industry (high level) Work with an associate in creating the initial model Work with an associate in creating the initial model Prepare initial Investment Committee (“IC”) presentation Prepare initial Investment Committee (“IC”) presentation Establish next steps with the target company Establish next steps with the target company Work through the data room and perform basic due diligence Work through the data room and perform basic due diligence Additional IC presentation Additional IC presentation Meet with the management team (travel) Meet with the management team (travel) Perform extensive due diligence (travel) Perform extensive due diligence (travel) Additional IC presentation Additional IC presentation Next steps… Next steps…

16. Important Skills & Traits Functional Communication skills Communication skills PowerPoint PowerPoint Excel Excel Financial analysis Financial analysis Strategic analysis Strategic analysis Common Sense Common SenseGeneral Work ethic Work ethic Positive attitude Positive attitude True interest in subject matter True interest in subject matter Knowledge of subject matter Knowledge of subject matter Ability to network Ability to network Humility Humility Sense of humor Sense of humor

17. Case Study Tishman Speyer/Lehman Brothers purchase of Archstone-Smith Trust -$13.5 billion-

18. Questions