JOB DESCRIPTION
Real Estate Valuation Analyst
When people hear real estate they usually think of the reality show “Selling Sunset” and gorgeous real estate agents selling luxury mansions. I always start explaining my work by making a distinction between residential and commercial real estate. Residential real estate encompasses everything from single-family homes and one to four-unit rental residences (usually leased/owned by families and individuals). On the other hand, commercial real estate is usually leased to businesses and includes office, retail, industrial, hotel, and multifamily.
A Real Estate Valuation Analyst is a person who conducts market research and financial analysis to determine the economic value of a real estate investment. A common interview question that might be asked during an interview for this role is: why would two physically identical office buildings next to one another sold on the sameday trade at different prices per square foot? A real estate valuation analyst would be able to answer this question by analyzing revenue items, occupancy, tenant credit, lease type, weighted-average lease terms, etc. I just threw a lot of real estate jargon at you and it probably went over your head. The point is that a valuation analyst uses several strategies and tools to determine how much a building is worth.
The analyst assesses the value of properties, looks into market trends, and advises clients or companies on investment decisions. To better understand the multifaceted nature of this job, let's break down its core functions into three distinct roles: (1) Detective, (2) Storyteller, and (3) Diplomat. The following three descriptions can sum up the typical day of a real estate valuation analyst:
Detective: Much like a Sherlock Holmes who pieces together clues to solve a murder mystery, a Real Estate Valuation Analyst needs to extract information in order to understand a specific asset’s value:
- Conduct research on property characteristics and analyze market trends, comparable sales, and other economic factors.
- Communicate with brokers and leasing agents.
- Use cash flow modeling and property performance indicators to analyze the asset’s profitability.
Just like a detective, I might analyze an office building in downtown Los Angeles by first looking at the evidence provided (appraisal documents, lending documents, P&L statements, etc). Then, I might look at various market reports and “interview” brokers to see if the assumptions used in those documents make sense and are reflective of the current economic climate. I will also collect data on similar office buildings within a 5-mile radius to get a better idea of where my ballpark should be and if my subject building is competitive. Lastly, I would use cash flow modeling to predict future streams of revenue and expenses for the building. I might take into consideration various different economic scenarios and air on the side of caution by being more conservative with my assumptions.
Storyteller: A big aspect of the job is being able to translate the numbers into a story and communicating that with all the people I work with my colleagues, my boss, and our clients (owners, developers, builders, capital providers, and various real estate investors).
- Create detailed reports that effectively communicate the value of a property and the process that went into evaluating it.
- Craft narratives that explain the rationale behind assumptions in the valuation.
The role of the storyteller is technical but also requires many soft skills. When I’m drafting a memo that will ultimately be delivered to the client, I need to make sure that the numbers and carefully worded explanations tell a story. Additionally, I need to be able to verbally communicate this process to my colleagues and my boss (usually the Managing Director or Partner on the team) when they review my work.
Diplomat: The diplomat is a pro in all matters of negotiation and ultimately serves as an advisor by providing expert opinions.
- Provides strategic guidance to clients based on valuations.
- Engages with various stakeholders in meaningful discussions.
Although this role is more suitable for senior members of the team, a Real Estate Valuation analyst might assist in advising clients on their real estate investment decisions. Our team is a third-party consultant that provides expert advice without bias. For instance, the University of Southern California might want to expand its neuroscience research center and ask us whether or not they should purchase an abandoned car dealership or the run-down parking lot near campus to build the new center.
Ultimately, this job requires you to wear several different hats. You might be a diplomat one day, a storyteller the next, and then switch back into detective mode once again. Yes, a Real Estate Valuation analyst needs technical skills in Excel and PowerPoint. However, I find that soft skills are most important in corporate America, especially in a relationship-oriented industry like real estate! The hardest part of the job is learning how to be a good teammate, especially when you’re starting out at the bottom of the corporate ladder.
Hi Wen Hsin! You did a really great job with the job description post. Overall, I really like your structure and the way you organized your thoughts. As a reader, I have a pretty solid understanding of what the job encompasses. You also used the Plain English we talked about in class, where I think anyone can understand what real estate valuation analysts does. One suggestion I have is for your second section about storyteller, it might be helpful to give a specific example of how you can convey certain financial statistics into a narrative. I really liked that you gave specific examples in your first section Detective, and I think it will be helpful for your second section as well.
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ReplyDeleteI really enjoyed reading about your time as a Real Estate valuation analyst position. I really enjoyed the storyteller portion of it specifically. It is interesting that you have to take all of the investigative work that you did and transform it into something that a client could understand. Thank you for sharing.
HI Wen Hsin, I loved reading about your role as a Real Estate Valuation Analyst. My favorite part of your blog is where you gave us an example of an interview question you might get asked when applying for a position like this. I thought nicely explained each of the many roles you take on in this position! Also, really liked how you had a closing paragraph (something I will take into consideration in my own blog).
ReplyDeleteHello Wen Hsin! I think you did a great job detailing what the job of a real estate valuation analyst is in a way that was really easy to understand for some one who doesn't know much about the role. I especially liked your comparison of the job to a detective and a storyteller! I thought it was an especially neat analogy as it helped to tie together the roles analyst took on observing and studying a particular location and then neatly summarizing and consolidating your findings it to present it to your boss and clients.
ReplyDeleteHi Wen Hsin, excellent post! I thought you did a great job of detailing what a real estate analyst is and what they do. The description was very clear and concise. The demand for commercial office space was hit hard by the pandemic and I was wondering if you think it will it will return to pre-pandemic levels or will remote/hybrid workplace be here to stay?
ReplyDeleteHi Wen Hsin, I loved reading your post! It’s fascinating how you approach your work with a blend of detective-like analysis, storytelling to convey complex data, and diplomatic skills in advising clients. Your emphasis on the importance of soft skills in a technical field like real estate is insightful. It’s clear that your role requires a dynamic skill set, balancing analytical tasks with effective communication! Thank you for sharing.
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