Summer 2006 Internship Experiences

Name:
Kathy Brown

Company:
Wrightwood Capital

Location:
Chicago, IL

Employer Information
Wrightwood Capital is a leading provider of structured capital to the real estate industry nationwide.  The majority of Wrightwood’s business is short-term structured lending, however they also invest some equity including mezzanine financing, they have a small industrial fund, and they recently issued their first CDO – the first funded entirely with whole loans.  Based in Chicago, the company has small loan origination offices all over the country and they are growing very rapidly.  With original capitalization of $1 billion, they completed more than $750 million of investments in 2005 and plan on $1.3 billion of originations in 2006.

Summer Experience
I spent this summer in the underwriting group at Wrightwood.  The underwriting group works with all of the departments in the company to evaluate investment opportunities and do ad-hoc projects and analysis as needed.  The company had never hired an intern for the summer, which was a positive and a negative.  The positive is that I was able to dive in and take on as much responsibility as I could handle.  The negative is that I had to be aggressive in communicating my goals for the summer and making sure I stayed on track.  Overall, it was a great experience.  I had the opportunity to work on all aspects of the underwriting process, including financial analysis, ARGUS modeling, and market and competitive research.  I was also able to attend investment committee meetings to see how they analyzed the projects and made their investment decisions.  Since the company is still relatively entrepreneurial, I saw many different deal structures, commercial product types, and product stages. 

 

Name:
David Busker

Company:
Sorin Capital Management

Location:
New York, NY

Employer Information
Sorin Capital Management is a multi-strategy real estate focused hedge fund headquartered in New York, NY.  The investment fund specializes in real estate debt investing.  Sorin invests and trades both securitized CMBS and ABS investments as well as investing in syndicated and direct term loans, mezzanine debt and b-piece investments. 

Summer Experience
My summer at Sorin Capital was an eye opening and career broadening experience that introduced me to the vast array of debt financing alternatives.  Sorin’s knowledge of the debt markets, including structuring of collateralized debt obligations (“CDO”)s, broadened my understanding of the real estate and debt markets. 

I worked primarily in the credit group analyzing the underlying assets that comprise Sorin’s debt investments.  I began my summer by reviewing the term loan investment in which SCM currently has positions.  This diverse group of investments include: single-family developments, high-end resorts, office buildings, mixed use developments and a variety of traditional real estate holdings.  Expanding on this review of current investments, I created surveillance models to track the financial performance of the assets in order to help potentially anticipate material changes to the assets’ performance.  The ability to anticipate these changes allows SCM to adjust their position ahead of the overall market. 

The balance of my internship was spent underwriting and analyzing potential investments.  Sorin’s structure as a hedge fund allows it to invest in unique opportunities outside the reach of many institutional investors.  I worked on reviewing the debt related to many of the real estate focused LBO transactions that have closed in the last 24months.  This analysis includes reviewing the underlying asset value, operating company credit, legal structure and release analysis. 

The range of potential investments I reviewed this summer include: a very high-end private residence club, industrial portfolios, portfolio of NYC subsidized apartment buildings, national retail chains, hospitality backed Z-bonds and the assets of an office REIT LBO. 

Sorin’s expertise in the real estate financial markets is what makes them a unique investment fund.  I was exposed to the structuring of CDOs, repo markets and the equity investments in a hedge fund.  Overall, the experience rounded out my background with regard to real estate investing and exposed me to aspect of the financial markets with which I had no previous experience. 

 

Name:
Matt Head

Company: 
INVESCO Real Estate

Location:
Dallas, TX

Employer Information
INVESCO Real Estate invests in direct real estate assets and real estate securities in the United States and Europe.  The Real Estate group is based in Dallas and manages approximately $27 billion in assets.  INVESCO is one part of AMVESCAP which also includes AIM and Atlantic Trust.  AMVESCAP is headquartered in London.

The group I was in was very open to allowing me to learn about different aspects of the company.  I sat in on numerous conference calls and was also invited to attend some of the weekly investment committee meetings where the decisions were made as to whether an investment should be made or disposed of.  I also had the opportunity to get some one on one time with different people to learn about their roles.

Summer Experience
I spent my 10 week summer internship working with the Research Group.  The first part of the summer I worked with a statistical program called SPSS.  My role was to develop statistical models for approved U.S. cities that the research group had determined could warrant investment.  I worked with four property types; industrial, retail, office and multifamily and used economic and demographic variables to determine what was driving rent growth in a particular market for a particular property type.  These models where then passed on to the analyst who used the information to determine a rent growth forecast for the underwriters.  I also created models for the four property types to try to determine what was driving absorption of space in each particular market.

The second project I worked on was helping one of the analysts formulate a national industrial market strategy.  I focused on the different attributes of the industrial market relating to how demand and building characteristics are changing as the transportation infrastructure changes in the U.S.  Some of the things I focused on were how building attributes are different near sea ports, how rail drives industrial demand and how just in time manufacturing and logistics are altering how the industrial market functions.  This was done with the goal of finding the next hot industrial market before the competition is able to.

 

Name:
Austin Moffitt

Company:
Centex Homes

Location:
Austin, TX

Employer Information
Centex is one of the nation's leading home building companies. Centex operates in major U.S. markets in 25 states and delivered more than 39,000 homes in the United States in its most recent fiscal year.

In addition to its home building operations, Centex's related business lines include mortgage and financial services, home services and commercial construction. These businesses provide operational or financial support to home building operations and are leaders in their respective industries.

Summer Experience
The position focused on a land acquisition and development.  The program also included time in construction, finance, and marketing.  The internship provided for an encompassing look into the homebuilding industry in Austin.  In the position I was allowed to pursue deals with land owners, work with land brokers to find land, talk with developers to seek developed lots, and conduct financial analysis in the land acquisition department.  The land development department helped to establish an understanding of geotechnical factors, infrastructure development, entitlement with city government, and cost analysis.

 

Name:
Afolabi Ojumu

Company:
Bank of America Global Corporate and Investment Bank (Real Estate Group)

Location:
Charlotte, NC

Employer Information
Bank of America’s Global Investment Bank serves the needs of clients with annual revenues ranging from $500 million to $300 billion, with names ranging from Boeing to MetLife to United Health Group to Prologis, to name just a few of the more than 3,000 companies in the client list.

The investment bank is primarily organized into 11 industry/product teams focused on specific sectors. Focus industries are: Consumer & Retail, Financial Institutions, Financial Sponsors, Gaming, Global Industrials, Healthcare, Natural Resources, Real Estate, Technology, Media & Telecom. Product groups include Transaction Development and M&A. M&A specialists are also integrated within each of our industry teams.

They are headquartered in Charlotte, North Carolina, but have offices in Charlotte, New York, San Francisco, Houston, London, and Hong Kong.

Summer Experience
It was a 9 week internship with 1 week for training (total 10 weeks).  I worked in the Charlotte office the entire time as I chose to be specifically in the Real Estate Group in Charlotte and not the generalist pool.  We had a lot of volume this summer and I ended up closing 2 investment grade bond deals (one was $700MM and one was $125MM), 1 convertible bond deal ($149MM), working on a large sell-side M&A, as well as an equity “follow-on” for a company the group helped IPO the summer before, all for different clients all as book-runner.

My main activities included meeting with clients, drafting and proofing presentation materials on transactions, drafting and proofing offering memorandums and prospectus supplements, building models, conducting due diligence calls, researching, and pitching.

It was a great summer experience.  I learned a tremendous amount different financing products, different equity processes, as well as about the complex changing world of public and private REITS and their relationship with Wall Street.

 

Name:
Tom Paterson

Companies:
USAA Realco
Parkway Properties

Locations:
San Antonio, TX
Jackson, MS

Employer Information (USAA)
USAA Real Estate Company has approximately $2.6 billion in assets owned under management and provides acquisition, build-to-suit and development services for its own account and institutional investors. USAA Real Estate Company's portfolio consists of office, retail, industrial, multifamily, and hotel properties as well as investments in real estate operating companies. The company's annual volume of transactions is in excess of $500 million.

Summer Experience (USAA)
The Realco internship program was split into two parts.  For the first half of the summer I was in the Asset Management part of the company.  In this part, I spent most of my time negotiating lease terms & running credit checks for potential tenants, and reviewing TI schedules & capital outlay projects for existing assets.  A great deal of my time was spent analyzing these property decisions from a financial prospective.  Although my tasks varied quite a bit in this half, it was definitely the slower paced portion of the program.  

In the second half of the program, I performed underwriting for multi-million dollar acquisition opportunities across several property types (Office, Industrial and Hotel).  This process included creating Argus and Excel financial models to evaluate potential investments and determine fit within USAA’s existing portfolio.  I found this time to be very interesting and enjoyable. 

Finally, the USAA internship includes a research study on a relevant property type and market for the company.  Realco is in the process of putting together an industrial fund and I was assigned the project of researching the Kansas City Industrial market.  The project focused on national distribution, supply chain, and logistics patterns.  I visited the market and did a great deal of research to put together an analysis of trends and recommendations on the market.  I subsequently presented the results to the Real Estate Investment Committee during a 1+ hour presentation. 

Employer Information (Parkway)
Parkway Properties is a mid-cap Office REIT located in Jackson, MS.  The company is focused on the operations, acquisition, ownership, and leasing of office properties throughout the Central & Southeast United States.

Summer Experience (Parkway)
I spent three weeks at Parkway with two other McCombs students.  It was definitely a good way of getting exposure to the company and was a great way to learn more about the special details and operating challenges associated with being a REIT.  I spent a great deal of my time studying the recent trends of mergers and privatizations of publicly traded REITs.  I also did some analysis on the job markets and real estate fundamentals of individual markets where Parkway invests.  We spent a great deal of time working with the management group at Parkway and it was very interesting to get their insights and witness the manner in which they operate.  For this reason alone, I think it was a great experience.

 

Name:
Diego Rubio

Company:
ProLogis

Location:
Fremont (SF Bay area), CA

Employer Information
ProLogis, headquartered in Denver, is the largest industrial REIT in the world.  ProLogis’ portfolio includes over 400 million square feet, consisting mainly of warehouse and distribution space.  ProLogis’ footprint encompasses North America (including Mexico), Europe, and Asia.  The company is also involved in several large scale mixed-use development projects, mostly due to its 2005 acquisition of Catellus Development Corporation.  One of these projects is the Mueller Airport redevelopment project, here in Austin.

Summer Experience
The ProLogis internship is a somewhat informal, self-guided rotational program.  I spent the summer in one of the field offices, working with a great team of market representatives (i.e. leasing reps), asset managers, project managers (i.e. development) , and property managers.

Throughout the summer, my internship experience included the following:
·    Worked with market reps to lease and renew space
·    Evaluated potential property acquisitions
·    Analyzed customer credit
·    Assisted in preparing build-to-suit proposals and proformae
·    Determined permitting requirements and fee structures for development projects
·    Procured estimates for tenant improvement and make-ready projects.

Finally, each intern is given a project to work on throughout the summer and to present at the end of the internship to the company’s senior management team in Denver.  My project was to determine the viability of mixing centers (a specialized type of distribution center) in China.

 

Name:
Milagros Silva

Company:
Hill-Granados Retail Partners

Location:
San Antonio, TX

Employer Information
Hill Partners is a working group of four companies;  Hill Partners Inc., Hill Partners Management Co. Inc., Hill Partners Corporate Services LLC and Hill-Granados Retail Partners.  The headquarters in Austin, TX specializes in developing office and industrial properties, meanwhile the San Antonio office focuses on Retail projects. 

Hill-Granados Retail Partners is the largest retail developer in San Antonio.  They specialize in mixed use shopping centers anchored by large-scale tenants such as Wal-Mart and Target in prime San Antonio locations.  So far, Hill-Granados Retail Partners has developed more than 4.2mm sq.ft of retail space in the city with projects ranging from (100k- 1.2M sq.ft). These developments range in value from $30M to $150M and have created much needed infrastructure and jobs in the city. The company is primarily market driven and has established an impressive track record bringing large retailers to underserved areas all over San Antonio. 

Summer Experience
My experience was truly incomparable.  I had the pleasure of working directly with Mr. Mark Granados in the San Antonio office where I learned about every step of the development process from opportunity identification, to construction, development, leasing and raising capital to finance projects.  I worked alongside Mark everyday running the pro-forma valuation models, reconciling financial statements and analyzing capital structures, creating budgets for different shopping centers, attending all types of meetings, and visiting architects to update site plans for our projects.  In summary, I was lucky enough to work with every department and learn about every single aspect related to retail development issues in San Antonio, even legal and zoning matters.  Mark made it a point to really take me under his wing and make sure that I was engaged in everyone of his deals.  In addition I worked with the property management division and attended an ICSC shopping center conference in Dallas.  Working in a small and open office environment really allowed me to get my hands dirty and learn how large-scale development projects are executed from start to finish.  It is a truly amazing process and it is very relationship driven.  Mark Granados has been successful in San Antonio due to his amazing work ethic and reputation for doing what he says he is going to do. 

 

Name:
Ian Swiergol

Companies:
Bourn Partners
Parkway Properties

Locations:
Tucson, AZ
Jackson, MS

Employer Information (Bourn)
Bourn Partners is a full service real estate services and development company based in Tucson, AZ.  They currently have office, retail, and multi-family developments primarily in Arizona, but also in Southern California and Texas.

Summer Experience (Bourn)
I spent the first 10 weeks of the summer working with Bourn in the finance and investments division.  Initially, I developed a co-sponsorship fund model that has been proposed with institutional investors.  In addition to building the model I composed the draft of the summary of fund principal terms.  I also completed the equity waterfalls for 13 properties included in Bourn’s retail and office portfolio dispositions.  My activities also included researching disposition structures and strategies for the company including joint venture and Down-REIT opportunities.  I worked daily with the Chief Investment Officer and was granted access to his daily meetings and activities.

Employer Information (Parkway)
Parkway Properties is a public REIT based in Jackson, MS engaging in the operation, acquisition, ownership, management and leasing of office properties.

Summer Experience (Parkway)
Additionally, I spent three weeks in Jackson, MS interning with Parkway.  I worked on several projects with two other McCombs MBA students, focusing on stated and observed rationales for the recent trend of public REIT privatization.  I also completed a study on the increasing use of public REIT joint ventures with private institutions, and the effects they have on public market valuations.

Overall, my summer internships were very rewarding in that I was exposed to both a growing developer as well as a large public REIT.  The projects I worked on were important to both companies whereas they affected current decisions and future strategies as well.