From June 2019 to August 2019 I was a Hines Summer Analyst in Houston, Texas. 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 submarket 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 

When 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 can determine 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 and how the work is delegated
• 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

When 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. My presentation was broken into 6 parts and finished with a 10 minute Q/A section.

The Presentation

I first explained what data centers are, the different types, and what were the characteristics of each type of data center. Second, I focused on my thesis. To capture the yield premium in data centers while focusing on sale-leasebacks with investment-grade tenants. I also noted the company strengths that Hines could bring to the table.

Third, I discussed data center industry trends, what the market share looked like, and the recent trades of sale-leasebacks. Fourth, I focused on the risks of entering the data center space and how Hines could mitigate the risks. Fifth, I talked about the importance of location with data centers and gave a specific location that I think will have great data center success in the future.

Sixth, I gave a summary of my entire presentation and provided actionable steps Hines could take in the future to enter the data center space. I then had a 10 minute Q/A portion where I answered any questions.

Things I Learned

• How to compile 10 weeks of research into a 25-minute engaging presentation
• The process of learning about a new asset and who are the best professionals to talk with when learning about a new asset
• How to find value in a certain real estate asset and ways to capture value for investors
• Find different opportunities a company could profit from an emerging asset
• How to interpret raw data and create visual graphics for the audience to understand
• How to look at sales comparables to find possible emerging trends an investor could utilize
• Evaluating net absorption and investment activity  inside specific assets
• The components of a data center and how they work