Last Updated on October 5, 2021 by Admin
The job description of a real estate analyst entails providing financial analysis relevant for the financing, acquisition, marketing, and leasing of properties.
It also involves providing professional advice to real estate companies and other firms in the business based on the economic conditions, micro and macro factors, and market trends and their financial implications.
Real estate analysts may also be required to evaluate a client’s creditworthiness and assist in negotiating lease and mortgage contracts and coordinating loans.
Their role also involves maintaining and running financial models on existing assets and acquisitions.
Here are examples of responsibilities from real estate analyst resumes representing typical tasks they are likely to perform in their roles.
- They are responsible for creating sophisticated analyses for tracking and reviewing returns and performance on Asset and Fund levels.
- They consolidate, analyze, and model financial data, including budget analysis and income statement forecasting.
- The real estate analyst’s duties also include providing support in modeling and analyzing financial data regarding refinancing, acquisitions, and disposition of investments.
- Their work description also entails updating and completing various investor reports, including financial snapshots and qualitative summaries.
- The analysts are responsible for evaluating research data and producing real-time valuation.
- They are responsible for producing regular market performance assessment (MPA) reports for clients and maintaining real estate market rating models for the assigned properties on the market.
- They also monitor and analyze specified commercial and residential real estate market conditions using the area’s internal and external real estate, financial, and economic data and research.
- When working for an organization with real estate investments, analysts must manage the firm’s real estate holdings by continually monitoring the markets where they have properties; they are prepared to deal with any changes that may occur and capitalize on positive shifts.
- Real estate analysts collaborate with senior developers and investment teams in the underwriting, due diligence, and modeling for new developments, current assets, and future acquisitions.
- They communicate with people inside and outside the organization, such as Asset Management, Acquisitions, Legal, Accounting, Operating Partners, Development and Investment teams.
- They require strong research abilities, analytical, computer, and excellent communication and organizational skills.
- Complete accurate and timely interpretation and abstraction of crucial lease terms into Real Estate Management System, including new leases, amendments, renewals, terminations, subleases, etc. adhering to prescribed abstraction criteria and processes, e.g., critical lease dates, lease options, lease obligations, free rent, prepaid rent, security deposits, etc
- Maintain accurate contact information for all landlords, payees, property managers, etc within the real estate database
- Review of all lease abstractions to ensure accuracy and data integrity
- Review peer abstracts to safeguard all critical lease data is captured and entered accurately into the real estate database
- Ability to maintain strong attention to detail with a continued high efficiency and accuracy rate for performing work/tasks in a fast-paced work environment
- Identify potential conflicts in leases or high-risk items
- Set up and maintain reminders for portfolios
- Tracking and following-up on missing data and documentation
- Prepare and distribute monthly Critical Date and Portfolio reports to enable the CRE team to monitor upcoming action items and critical dates
- Responsible for additional Lease administrative duties which include uploading lease documents, correspondence with internal teams, etc., as well as ad hoc requests for updates from the CRE or Financial Reporting teams
- Maintain relationships with internal clients
- Maintain internal Operating Guidelines to facilitate accurate abstraction of lease and non-lease data
- Assist in additional department-related functions as requested
- May perform other duties as assigned.
What are the different asset classes Real Estate Analysts work in?
Following are the essential asset classes real estate analysts work in;
Multi-Family: This is typically apartment buildings or units within an apartment complex.
Office: This typically refers to an office building that houses companies and business offices.
Hotel: This refers to the different hotels and operations that go with it.
Industrial: This refers primarily to one story or large warehouse-type structures
Development: This refers to open land or land that has yet to be developed.
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Various terms used by Real Estate Analysts?
- IRR: This measures the internal rate of a return for a company. It’s trying to measure the return the company generates based on a discount rate yearly. Companies want to know what an investment will develop in the future based on the information they have, the projections they make, and the assumptions they use.
- PSF: This is for the price per square foot on a property. Commonly used in office or development sites.
- Loan Amount: This is the loan amount you’re able to generate based upon the income or value of a property.
- NCF: This is the amount of net cash flow a property generates. After the expenses, vacancy, insurance, and reserves are taken out. This is the number that is used to calculate your total loan amount.
- DSCR: Your debt service coverage ratio shows how well you’re covered to pay your debt service. It’s a number that’s based on your debt service payment and your net cash flow.
- Mortgage Constant: Your mortgage constant is the amount of interest and principal you’re paying. The amortization period, the loan amount, and the interest rate will determine the mortgage constant.
- NOI: The Net Operating Income is the amount of money a property generates after factoring out its expenses, vacancy, taxes, and insurance. It’s the metric that’s used primarily when sales are made or conducted.
- Vacancy Rate: The Vacancy Rate is the percentage of the property or space that’s vacant. If a room is empty, it isn’t occupied, leased, or rented.
- Interest Rate: The interest rate is the amount of interest you pay on the money you took out as a loan or are due to pay back over the life of the loan.
- Amortization Term: The amortization period is the amount of time you’ll pay off the loan amount’s principal balance.
- Rent Growth Rate: The rent growth rate is the amount of growth you project the rents to have. It is often linked to the market’s rent growth rate.
- Expense Ratio: The percentage of income you pay in expenses. It accounts for all the costs you have to pay to run the property.
To become a real estate analyst requires a Bachelors’s Degree in Finance, Accounting, Business, marketing, or Real Estate.
In addition to academic qualifications, they also require some role-based skills to perform the job of a real estate analyst successfully.
Excellent working knowledge of MS Office, specifically Word, Excel, MS Outlook, OneDrive, and SharePoint
Real Estate Analyst Required Skills
As a real estate analyst, you’ll spend a significant amount of time researching market trends, analyzing statistics, and recommending rest estate investments. Depending on your job description, other duties can include negotiating real estate deals, asset management, and communicating with your clients and other analysts, agents, and investors.
To successfully meet these responsibilities, you’ll need to be technologically savvy and have organizational expertise and exceptional people skills. Some of the required skills include:
- Proficiency with computer software and relevant applications
- Exceptional time management
- Expertise in financial modeling
- Research experience
- Detailed data analysis
- Ability to comprehend real estate lease agreements, documents, and communications, extracting pertinent data for the Lease Administration database, preparing Lease abstracts, and other reporting as needed.
- Strong knowledge of commercial real estate documents and the leasing process with an ability to apply this understanding in performing job responsibilities
In addition, you need good communication skills. Keep in mind, too, that there are many moving parts in a successful real estate transaction between buyers, sellers, investors, accountants, lawyers, and more. So, real estate analysts who are team players and understand the real estate market do well in the long run.
Real Estate Analyst Salary
As per the Payscale, an entry-level Real Estate Analyst with less than 1-year of experience can expect to earn an average total compensation (includes tips, bonuses, and overtime pay)
The average salary for a Real Estate Analyst is ₹660,000 in India
The average salary for a Real Estate Analyst is $60,898 in the US
Note: Data recorded on 5th Oct. 2021
Real Estate analysts are an essential part of the commercial real estate industry. Every transaction or deal is incredibly complex, and the documentation required to move deals along is intense.
The real estate analyst is the one who gathers all the information and puts it into a format or package that the company or executives like to analyze. This way, they can see the essential data and metrics, then use their knowledge and experience to make high-level decisions.
The position teaches you about the industry and the standard practices that are utilized. You’ll start to learn the nuances associated with real estate and the different procedures in place.