Tanmyaa Gupta

Hi everyone, welcome to my blog! I'm Tanmyaa Gupta, and this blog will be where I reflect on my senior project as it progresses from early February to April.

Before I begin, I should probably tell you a little bit about myself. I am small (at 5"1') but think big.  I am currently a senior at BASIS Scottsdale, and when I'm not at school, I binge-watch Brooklyn 99 (or Downton Abbey with my mom), annoy my 12 year old and practice Krav Maga a couple of times a week (alright, who am I kidding? I either go every day of the week or not at all. Achieving consistency is one of my New Year's Resolutions).

But we should probably go onto the reason that you're here. For the third trimester of my senior year, I will be interning at Churchill Commercial capital, a local financial brokering firm, learning about real estate in a commercial context. I've always loved finance, and there isn't a better opportunity for me to explore my passions than the present.

As far as I know, I will be assisting with the brokering of a deal between two companies in order to construct an apartment complex in Tempe, near the light-rail. However, I like to think in terms of the big picture. Every decision we make has bigger consequences, and the construction of an apartment complex will definitely have a larger economic impact on the surrounding area. There might be further development in the area, whether residential or commercial. I want to understand the way that private firms work with local or municipal governments, residents of the area of interest, and other organizations in order to come together under a deal like this.

I hope to follow the progression of the deal as it takes place in order to see what factors play into financial brokering.  I also intend on gauging to what extent it will affect economic development of the area. I think it'll be fun!

I plan on posting every week to keep track of the little details and big events that take place, and hopefully, at the end of this project, I will be one step closer to understanding finance and economic development in an urban context.

Thank you for reading my first post, and I'll see you next week!

Tenth Week (AKA What Now?)

Hey everyone, sorry for the very late post. I've had this post written since Thursday and was intending to add more to it, but I was at UCLA for freshman admit weekend from Thursday onward and just got home (five minutes ago). It seems that I am good at planning ahead and terrible at executing those plans. Regardless, it was an amazing experience and I am very proud to announce that I have committed and will be attending in the fall. Go Bruins!

I have officially also finished my presentation and I have found that there are several factors that play into commercial mortgage brokering. Without giving too much away, there are four: property value, loan analysis, market conditions, and personal and professional relationships. I basically had to review the commercial mortgage brokering process to reach that conclusion, and as you (more or less) know from following this blog for the past ten weeks, it begins with a loan request, goes through analysis, then brokering, and finally closing.

I guess the question now is what comes next. I will actually continue working at Churchill over the summer, which is an amazing opportunity to learn more about commercial real estate, and I am very grateful to Mrs. Hammond for the opportunity. I start tomorrow and will (hopefully) stay here until I move to UCLA in late September. Overall, the professional experience has been not exactly what I expected, but I think I have been given a lot more liberty than I could have expected. I have heard plenty of horror stories from peers and seen Hollywood portrayals (like the Devil Wears Prada), but everyone that I've had the pleasure of working with has treated me with respect; any question I had, no matter how small, was always answered without condescension, which has not been my experience with several of my classes, surprisingly. Working at Churchill has been an amazing experience, and I am so thankful to be able to continue here.

It's hard to believe it has been ten weeks already. Learning all of the new terms and ways to act in a professional setting was really hard in the beginning, and I can only assume that a transition from only going to high school to working is always a little bit challenging, to say the least. However, the difficulty of that transition was definitely worth it; I have learned so much and found another field I may want to pursue further in college, perhaps as a minor. There's lots of possibilities.

Anyway, as this is my second-to-last post, I should probably mention (maybe I've already done this- I can't remember) that my final presentation is May 6th, from 10:50 to 11:05, and as much as I don't like public speaking, it'd be really cool if you came. I promise I'll try my best not to be boring!

Thank you so much for following my blog as long as you have! See you soon for one last post. 

Ninth Week (AKA Hey I think I'm Onto Something)

Hey everyone, and welcome back to my blog! This week wasn't all that exciting; I've just really been working on my final presentation (May 6th, which, even though it's a little under a month away, feels like it's coming too fast).

The most exciting thing that happened this week was that Churchill hired a new analyst, Ryan, who started working on Friday. He seems cool! He also seems like he's doing a much better job than I was on my first day, so kudos to him.

Other than that, like I mentioned, I've been making real headway on my project. I've got a solid 70% of it finished, and the weekend just started. I hope to have a finished draft to show my on-site mentor, Mrs. Hammond, by Monday. I'm planning on structuring it so that I go over the commercial real estate process, from initial loan request, then to loan analysis, then to brokering, and finally to closing. After that, I'll base my analysis on common factors I found throughout all of my project, or in other words, I'll be looking at what things are important when we are trying to convince potential lenders to invest in a property. So far, I've found that it's property value, market conditions, personal and professional relationships, and expected rate of return for each loan that determine whether or not a loan is attractive to a potential lender or not.

I'm really excited about the way that my presentation looks. I don't want to really spoil anything, but there's a certain satisfaction when everything looks professional and put-together. I used a template from Slides Carnival, a website with a bunch of free powerpoint and google slides templates (10/10 would recommend for google slides, but not so much for powerpoint- there are certain features that are not available in the powerpoint template, so it's been a bit of pain figuring out how to get everything to look just how I want it to). I'm planning on putting together several maps with different radii that will help me explain what it is that makes my specific project valuable, but until I figure out how exactly to put radii on a map, I'll keep the specifics under wraps. The only issue is I'm not entirely done with it and it's already fifty slides, so I have to find a way to make both fit in fifteen minutes and not be boring.

Sorry this week's post was mostly boring, but I hope to have some new cool stuff to tell you about next week!

Eighth Week (AKA Crunchtime)

Hey everyone, welcome back to my blog!

Last week, I started on my final project, and this week has more or less been a continuation of that. I finalized a neighborhood description, which actually took me several hours. Neighborhood descriptions are more or less a one-stop shop for everything about a surrounding area: market conditions, nearby developments (residential and retail in this case), municipal plans for expansion, and other things that may or may not be important. For example, in the case of the retail center that I'm working on, I had to mention housing developments within a five mile radius, population demographics (as in, how many people live in the area and how much they make in a year), Queen Creek's Economic Development Strategic Plan, and the impact of having the ASU polytechnic campus and the Phoenix-Mesa Gateway airport nearby. Surprisingly (or I guess as is normal by now) there seem to be lots of factors in determining the value of a property, including its surroundings.

Other than that, I finished creating maps and aerials, which is not as exciting as it sounds. I don't get to fly a drone over the subject property (although I will definitely be suggesting that to Churchill), but I instead have to look at the Maricopa County Assessor's Website and get my aerials from there. I think it's ironic that I've visited that website hundreds of times by now but I still don't know his name.

This deal seems like it will also be put off for a later date, as we do not have access to sales numbers for Staples and Petco, the other two major retailers in the shopping center, and therefore, we do not know if they have an incentive to renew their loans after they expire in a year and a half or so, regardless of whether or not Walmart chooses to stay. However, I will most likely continue to do the market research for this deal, as Churchill is doing another refinance for a different shopping center in Queen Creek, and the information I gather will be useful anyway.

I've been on a Dutch Bros cleanse for a couple weeks now and it's not going well, to say the least. I don't drink coffee daily anymore, which has led to me being overall more sleepy and a little cranky, if I'm being honest. I would not recommend going about this the way I am. Note to self (and to all of my wonderful readers): coffee is not something that you should drink a lot of and then none at all. See you next week!

Seventh Week (AKA Smeared Lipstick and Final Project!!!)

Hey everyone, and welcome back to my blog. I am excited to announce that I started work on my final project for Churchill (a complete loan package) last Thursday, and while I have held off on talking about it for a while to ensure that this indeed was my final project, I know for sure now.

Churchill will not be working on the deal involving the apartment complex near the light-rail, so I am instead working on a retail center refinance in Queen Creek (buckle up- this might be a long post).

This specific retail center is located on the intersection of two major roads in Queen Creek, one of which runs straight through town, and therefore sees lots of traffic. The properties that are being refinanced exist in a center that is shadow-anchored by Walmart. In reference to a retail center, an anchor refers to the main or biggest business in that complex. For example, the Safeway near BASIS, on Frank Lloyd Wright and Via Linda, would be the anchor tenant for that complex. A shadow-anchor is a relative term, in that it means that the anchor is not part of the deal at hand; the owners of the properties that will be refinanced do not own Walmart. This complicates things for a number of reasons, but the main one is that the next two big businesses in that complex, Staples and Petco, are co-tenants with Walmart. Co-tenancy basically means that if Walmart decides to leave that complex and vacate the building, Staples and Petco will most likely also leave or see major reductions in their rent. Lots of new terms, I know, but bear with me here.

The reason that this project is a good one to explore economic development of an area before and after a commercial real estate deal occurs is that Queen Creek is one of the fastest growing cities in the Valley. Over the past fifteen years, it has seen an increase of 100,000 people, and expects to see 20,000 more by 2021. In addition to this, the median household income is increasing relatively quickly as well, with projections showing an increase of approximately 10,000 dollars per year for each household by 2021. Increases in population and median household income tend to signal the economic development of an area. In regards to the specific center, I'll have to look into the growth of the surrounding area, and to what extent it was facilitated by the development of this retail center.

As for what I've been working on over the past week, I've started with the preliminary analysis of the property. I first worked on the rent roll, which, as you may remember, tracks the rent paid by all of the tenants. These properties make over 1.6 million on rent alone. I then had to work on Bumps, which is the amount per square foot per year that the rent increases for each tenant. The increases are usually less than a dollar per year, and oftentimes the bumps happen more than one year apart. After that, I worked on the operating history, which is very similar to the work I was doing for the loan reviews; I took a look at the sources of income and the expenses that the properties had overall, and based on that, potential lenders can see how the properties operate in a nutshell. On Wednesday, I worked on taxes, which was a little tough.

Tax information is based on parcels as designated by the Maricopa County Assessor's office. Parcels are small areas of land, and this particular retail center has at least 15 different parcels that make it up. I originally did all of the tax information for all 15 parcels; the tax information that I collected consisted of the amounts paid for the past 6 years, the valuations of the parcels for 2016 and 17, and the projected taxes for 2017. As you can imagine, it took me a very long time to do this for 15 parcels, and after I finished, I went back to double-check that I did all of them correctly. Upon doing this, I found that I had collected the information for 9 parcels that weren't part of the subject properties, and missed 3 entirely. It was quite frustrating, but at least I know now to check before I start doing this.

Today, I've been working on the neighborhood description, as well as the maps and aerial photos for the loan package. All of the work I mentioned previously goes into an excel spreadsheet to keep it organized, and it will eventually also be included in the package. The neighborhood description and maps are more for presentation purposes (to give the potential lenders an idea of what the properties look like) than economic ones. I think this is probably the hardest portion of this for me so far, because there are several aspects that have to be addressed in the neighborhood description, such as demographics, economic development of the area, and expansion or development plans for the area as outlined by the municipal governments. I've been working on this all day and I still don't have a decent draft going, because of all of the information that I have to synthesize into a page or two (I'm sorry Mrs. Hammond!).  It's taking me a while to understand the demographics and market information that Churchill has provided me with, but I hope to have a decent draft by Monday. As for maps and aerials, they tend to take me an hour total, so I figure that if there's ever a point at which I have no idea what's going on as I glance over these numbers, I can work on those for a while and have those finished by Monday as well.

Anyway, while I haven't embarrassed myself that much this week, I decided to take a risk this week and wear red lipstick! It wasn't the best decision. Maybe it's just the specific lipstick I have, but every time I eat or drink something, it gets everywhere. All over my chin and even my nose, and then on whatever unfortunate food or beverage I'm having in the moment. I suppose for every big victory there has to be a little loss. Thanks for reading, and I'll see you next week!

Sixth Week (AKA It Doesn't Get Any Easier)

Hey everyone! There's a lot going on this week, so I thought I would post a little earlier than usual.

I'd like to begin with a correction; loan reviews (thank you, Mrs. Hammond, for clearing this up) are actually for loans that have already been closed, and the purpose of loan reviews is to just give everything a once-over every year and make sure that nothing needs to be altered. For this week, I've mainly been working on several different loan reviews, including ones for various business parks, a retail center, and even a drugstore. I have five different spreadsheets open right now, and frankly speaking, the amount of money that is casually reported in income statements from property owners and operators is unimaginably large sometimes. Some of these properties have $100k worth of expenses on just external building management (like keeping the front of a store clean, for example) for one year.

I wanted to mention something that I haven't really talked about in the past. In the creation of loan packages, much of (not the majority, but still a significant portion) the work involved goes into the formatting of the package. As such, the information used in the package may be easy to find, but with the inclusion of various maps, market data tables, and property images, seemingly little things can cause problems (page orientation, headers, footers, text alignment etc). Of course, the creation of packages is mostly done in Microsoft Word, and while we are currently looking into creating a powerpoint template for packages, formatting has been one of those things that caught me completely off-guard- I never expected it to play such a large role. That can be said for a lot of things that I've encountered, I suppose.

As the days pass by while I continue my internship, I don't think I'm getting better at becoming an adult. If we make a list of good things that have happened so far today:

1) I have a gigantic box of papers to shred. You all know by now that it's a little joy of mine and I do it when the going gets rough, or my eyes start to ache a little after staring at spreadsheets for so long.

2) I finally bought enough drinks at Dutch Bros to get one free! I don't know what that says about me except that I probably spend too much money on coffee.

I'm still sort of floundering in adultiude.

1) I waved to the receptionist with the cool hair as I was walking into work this morning, and not only did I manage to hit myself in the face with my keys, I also dropped them and then just stared at the ground, sadly. Three people other than the receptionist saw me.

2) I bring my own lunch now to work, but today I grabbed the wrong box of food and I have a lemon and a package of fruit snacks (what a sophisticated snack- five star restaurant worthy) for lunch. It's ok; I have my Dutch Bros coffee to console me. Of course, I could go out to lunch and grab something, but I already have this gigantic coffee, and I wouldn't want to waste more time going out again.

3) I don't have that many professional clothes, and while I have slowly been going shopping and getting more, I had nothing to wear this morning except a floral yellow dress that is so bright that the sun reflects off it, making me look like a walking highlighter. Great.

Anyway, enough of me rambling. I'll probably post again this week to update you on how the loan reviews turn out, and what I end up learning from them. Thanks for reading, and see you then!

Fourth Week (AKA Loan Reviews and Coffee)

Hi everyone, and welcome back to my blog. I would like to apologize for my recent absence; I've been really sick lately.

Week 4 was eventful in that I started working on loan reviews, which was entirely new for me. Loan reviews, from what I gather, are meant to give potential lenders an idea of how a certain property performs during a given year; based on this information, lenders can decide whether or not they will give a loan to the owners or operators of the property. For example, I was working on a loan review for a business park, and as I looked through the income statement, budget statement, and rent roll for the property at hand, I had to format the information in front of me into a simple, concise description of net operating income and what lenders can expect in terms of returns on a loan.

Loan reviews, it seems, are where all of the tiny pieces that I had to research on various databases, like the Maricopa County Assessor's Office, and CoStar, came together. Every aspect of the property, from the net rentable square footage to the end dates of the leases of the tenants, matters, and it's best reflected in what expenses, reimbursed or not, and what income the property generates. This information is best summarized by the debt coverage ratio, or the DCR, which is calculated by taking the net operating income and dividing it by how much debt is paid back in a year. It basically represents how many times over the income of the property can cover the debt, and the higher that the ratio is, the better. Perhaps my calculations are wrong, but for the current loan review that I'm working on, the DCR is 19.14, which means that the income of the property can cover the debt 19 times over. Of course, I've normally seen DCRs between 1 and 2, which gives me sufficient reason to doubt the DCR I calculated. It's a work in progress, I suppose.

As far as I know, I'm nearing a relatively okay understanding of all of the services that Churchill provides, and it will soon be time for me to create and finish a loan package for one of their active deals. I am not yet sure what the deal will be, but now that I have a decent comprehension of all of the terms mentioned and the sources of that information, I will be able to track economic development of the area of interest.

Thanks for reading, and I'll see you next week.