Out of curiosity, can you do these in Excel or do you need Argus? I flipped through the first couple and those seemed doable without a license.

 

Hello, I would be really interested for your unofficial "answers keys" for the "challenges cases" since I cannot find all of them on Kahr's website. It would be really helpful for me as I am trying to prepare for CRE Interviews. Thanks! 

 

Hi All ~ if anyone has the unofficial answer keys from personal attempts, would love to connect to cross check my attempts / understanding (I'm a newbie to RE modeling). Please PM!

 

Echo RE the answer keys.

Side note....has anybody solved this case from A.CRE?  If so, could you post your excel to google docs and share the link?

THE STONES HOTEL – FINANCIAL MODELING TECHNICAL INTERVIEW

This is a variation of a timed technical interview test previously given by a global real estate private equity firm as part of its hiring process.

Participants are given 60 minutes to complete this test.

ASSUMPTIONS – THE STONES HOTEL

  • 5-year hold period
  • 250 rooms
  • Acquisition price of € 200k/room
  • Acquisition costs are 2% of purchase price
  • Debt
    • 70% loan-to-cost (LTC)
    • 5% interest rate, and requiring mandatory annual debt amortization based on
    • 25-year annual amortization period
  • Occupancy
    • 60% in Year 1, 65% in Year 2, 70% in Year 3, and 75% thereafter
  • Average Daily Rate (ADR)
    • € 325 in Year 1, growing at 5% in Year 2, 4% in Year 3, and 3% thereafter
  • Room Revenues equal 75% of total revenues and other revenues make up the remaining 25% to get Total Revenues
  • Assume the following EBITDA margins:
    • 20% in Year 1
    • 23% in Year 2
    • 25% in Year 3
    • 30% thereafter
  • CAPEX reserves are 4% of total revenues
  • For the exit value, assume a 13x on T12 EBITDA with 2% transaction costs

QUESTIONS – THE STONES HOTEL

  • What is the unlevered and levered IRR?
  • What is the Peak Equity and WDP (whole dollar profit, i.e., undiscounted profit after recovery of the original basis)?
  • Please build sensitivity tables showing the results for the levered IRR and levered WDP with the following variables:
 

Looks like these case studies and models are largely academically inclined. Personally hate the 'bate and switch' marketing tactics of posting something and then dangling a carrot - if you want to charge a fee, then be straight forward about it, no point of time wasting and keep your case studies.

image-20230406163801-1

 

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