By Mark Hughes,
Upon returning to Cornell and reflecting on my internship with HFF this summer, I realize that I made the right choice in the Baker Program in Real Estate. For my summer internship I wanted a fast paced environment that was transaction oriented and would allow me to gain in-depth knowledge of the local real estate market and all of its players. I recall from one of our first Career Work Group sessions the suggestion of interning with a brokerage office. The world of brokerage certainly checked the boxes and through networking with Cornell alumni, I was able to secure my internship with HFF in Portland, Oregon, covering both the Portland and Seattle markets.
HFF is one of the largest commercial real estate capital intermediaries offering Investment Banking and Advisory, Investment Sales, Structured Finance/Private Equity Solutions, and Debt Placement Solutions. I was fortunate to be placed in a rotational internship that gave me exposure to HFF’s Investment Sales and Debt platforms. My first 3 weeks were spent with the Multi-Family Investment Sales team followed by 3 weeks with the Debt Placement team and the remaining 4 weeks were spent with the Commercial Investment Sales team covering Office and Retail.
Covering the Pacific Northwest markets this summer proved to be exciting, as both Portland and Seattle are currently very hot real estate markets. The RLB Crane Index currently has Seattle leading the nation with 58 cranes in its skyline and Portland is ranked 5th with 32. Most people do not often think of Portland when they think of commercial real estate, but they should. With strong market fundamentals including a historically low unemployment rate, strong GDP growth rate, rising incomes and population, it’s easy to see why Portland was cited by the Urban Land Institute and PwC’s 2017 Emerging Trends in Real Estate as the 3rd overall market in the country to keep an eye on for real estate. The report ranked Portland 8th and 2nd for investment and development opportunities respectively.
My first day started fast and furious with a weekly Monday morning kickoff meeting at 7:30 am. This meeting is a weekly update of all transaction activity within the office followed by a conference call with all West Coast offices updates and market activity. It was at this time that I appreciated all the time spent in Professor Liu’s Real Estate Principles and Professor Boudry’s Real Estate Finance & Investments classes. With industry jargon being thrown out such as Cap-Rates, LTV, LTC, Debt Service, Debt Yield, Spreads, IRR, Cash-on-Cash, etc. it was a comforting feeling walking in on my first day with an understanding of the terminology.
The first three weeks of the internship were spent with the Multi-Family Investment Sales team. Here I researched market trends to aid the team in writing multiple brokers’ opinion of value (BOV’s), pitches, and offering memorandums. I was able to continue to refine my valuation and underwriting skills in excel by modeling several BOV’s. Touring comparable properties for a potential equity raise of a future luxury apartment development was the highlight during this rotation.
My next three weeks were spent with the Debt Placement team and focused on evaluating risk factors for loans and the various lenders who are willing to lend under certain parameters. I was exposed to many facets of lending and compiled a list of CMBS loans maturing over the next year after modeling out different scenarios for potential future refinancing opportunities. I continued to hone my valuation skills by underwriting a potential construction loan for a new office development, as well as various other existing assets.
Finally, the last month was spent with the Commercial Investment Sales team covering Office and Retail. Here I maintained a risk return profile database of all real estate funds investing in the Pacific Northwest. Other duties included reviewing due diligence documents, auditing Argus rent rolls and underwriting in Argus.
My summer internship with HFF was a fantastic 10-week “crash course” in the Portland and Seattle markets. It was extremely satisfying to hone the skills I learned during the first year of school, and I look forward to continue developing these skills (and my love for real estate) during my second year and after graduation.
