Can your commercial real estate analyst answer our hardest interview questions?

Written by Tyler Kastelberg

December 29, 2020

Commercial real estate analysts come with varying levels of expertise. How do you separate the fakers from the real experts? At Bullpen, we ask our analyst candidates a mix of quantitative and qualitative questions to determine their competency. We’ve curated some of our favorite commercial real estate analyst interview questions below. Sorry applicants, these are now retired!

Would IRR be higher for a property generating high cash flow, or one generating nothing at all?

This is a partial trick question – it depends.

In order to answer, a real estate analyst must have a strong understanding of financial modeling and be able to think clearly. IRR is one of the most difficult financial metrics to understand and discuss. Assumptions about the property must be made, and the analyst’s response should be measured by their ability to think critically under pressure and answer the question given reasonable assumptions.

If your cap rate goes from 8% to 10%, by how much does NOI need to grow/shrink for value to remain the same?

The answer is (10%-8%)/8%, or NOI would have to grow by 25%. This question typically prompts conversation about FOMC actions and the future of interest rates.

Describe a typical work week for a real estate analyst.

Prepared commercial real estate analysts should know exactly the type of tasks they will support before starting the job. An analyst’s role isn’t all underwriting and deal sourcing. Most days are filled with less sexy tasks, including legal document review, portfolio updates, and meeting pitchbooks. Experienced analysts will have realistic expectations about the job to which they are applying.

What is the most volatile product type?

Hospitality typically shows the most volatility and typically contracts first in an economic contraction.

What is the least volatile product type?


What is the biggest immediate concerns if a shopping center anchor tenant blows out?

Co-tenancy clauses

If you had $100 million to invest in real estate, how would you invest it?

The goal with this question it to test if your real estate analyst can speak thoughtfully and knowledgeably about a particular asset class. The analyst should have the ability to clearly articulate the value proposition of their proposed investment.

What product type is the best hedge against inflation?

The best analysts have a global understanding of the real estate market and the flow of money between asset types. An experienced analyst should be able to recognize that hotels and multifamily are the best inflation hedges as they re-price at daily and yearly intervals, respectively.

What is the value of a property with $10 million NOI at an 8% Capitalization Rate?

NOI divided by Capitalization Rate = Value. $10 million/8% = $125 million

Explain why the terminal capitalization rate is higher than going-in?

Your analyst should recognize the risk associated with rising interest rates in commercial real estate. As rates rise, capitalization rates typically increase, negatively impacting property values. The terminal capitalization rate should be higher to account for a possible increase in interest rates during the lifetime of the investment.

What factors do you consider when computing an estimated property value?
  • Comparable sales
  • Market capitalization rate
  • Value per unit (multifamily)
  • Value per SF (commercial)
  • After renovation/development value
If a project has zero NPV and the discount rate is 10%, what will be the project IRR?

10%. Internal rate of return is the discount rate at which the project NPV equals zero.


Interview questions can be a great way to break the ice with a candidate. However, they don’t tell the full story. Consider using a case interview to directly test your candidate’s financial modeling skills.

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