April 27, 2020 Anthony Colonnetta

My Experience as a Summer Analyst For Hines – Global Real Estate Investment, Development, and Management Firm

Hines Summer AnalystFrom June 2019 to August 2019 I was a Hines Summer Analyst in Houston, Texas. Hines is a global real estate investment, development and management firm that has over $133B in assets under management. I focused on acquisitions, asset management, and investment management of commercial real estate properties in Hines’ Global REIT 1 and Global REIT 2. The assets I worked on closest with were multifamily, office, industrial, retail, and senior living. The properties were located all across the United States and Europe.

What Roles I Played

Acquisitions

  • Created a deal pipeline model in excel, so acquisition team could see what current deals are in the pipeline, what deals are under contract, what deals are dead, etc
  • Executed the acquisition of a $1.1B office deal by preparing an investment package that consisted of sensitivity analysis, pro forma cash flows, lease documents, and market research
  • Performed and reviewed Excel and Argus underwriting for potential acquisitions
  • Made one-pagers on deals Hines were looking at that consisted of deal returns, deal thesis, risks and migrants, deal opinion, etc
  • Worked with senior management on deals where I would gather market research consisting of absorption surveys, demographic trends, occupancy rates, and sales comps
  • Created market reports (For Industrial Assets in Europe) that highlighted infrastructure investment, economic performance, job growth, county GDP, etc
  • Used Costar and RCA to report sub market research for potential deals
  • Reported weekly news and commercial real estate transactions in certain locations for managing directors

Asset Management & Investment Management

  • Conducted office and industrial tenant reports for buildings Hines owned/were acquiring. I used Bloomberg to find the company’s financials, credit ratings, news, and wrote an opinion on the specific company.
  • Evaluated properties’ quarterly operating income and expenses and reported variance changes to the investment management team
  • Supervised the development of a 370,000 SF office building by identifying construction draw requests from contractors and updating the project budget
  • Developed a currency forecast model for the YEN, GBP, and AUD, using Bloomberg, that evaluated historical performance and calculated future volatility
  • Reviewed Excel and Argus underwriting for assets under management
  • Read through tenant lease agreements to ensure legal precautions were accurate

Most Memorable Project: $1.1 Billion Acquisition

Hines Summer Analyst Office AssetWhen I was a Hines summer analyst I was apart of the investment package composition of an office acquisition that was being fully leased to Facebook. The investment package is meant to provide a full overview of the deal for the Hines Investment Committee. I experienced the creation of the investment package, the acceptance of the deal by the Hines Investment Committee, and the official closing of the deal. Some of the main components I worked on, in this specific investment summary, were reviewing the underwriting, creating sensitivity analysis, conducting market research,  participated in equity conference calls, modeled property’s sales comps in excel, and built an office stacking plan. My favorite component I worked on was reviewing the underwriting and creating sensitivity analysis. I dive a little deeper into what sensitivity analysis is below.

Review Underwriting and Creating Sensitivity Analysis

Sensitivity analysis is the process of changing specific underwriting metrics (Cap rate, vacancy rate, the interest rate on the loan, % of tenants that resign, etc) and showing what the deal returns would look like depending on the scenario. You can find an example of sensitivity analysis in this investment summary.

Things I Learned

  • Being able to understand the different roles companies play during the life of a deal (Broker, Equity, Debt, Intermediaries, etc)
  • How financially strong a tenant is in your building determines how much the property is valued
  • Weighted Average Lease Term (WALT) is an important office/industrial metric
  • What Hines Investment Committee is looking for to accept a deal
  • The process of creating an investment package
  • The components and structure of an investment summary
  • What underwriting metrics to change during sensitivity analysis
  • The similarities and differences between underwriting an office vs multifamily deal
  • The differences in working with just one office tenant vs multiple office tenants

Capstone Presentation: Investing In Data Centers

Hines Summer Analyst Capstone ProjectWhen I was a Hines summer analyst I worked on a 10-week long project that would add value to Hines and present the project to various directors and managing directors. I decided to focus my presentation on data centers and how Hines could capture the yield premium in the asset while mitigating the risks. During the 10 week creation of the presentation, I had to learn the asset, understand the key companies, talk with data center investors/brokers, and conduct my own research. The presentation was broken into 6 parts and finished with a 10 minute Q/A section.