3/22/11

I am graduating college and am seeking a position in commercial real estate in Chicago. I am trying to gain a better feel on the highest paying positions in this field and what areas are the most lucrative to get in to, (ex. Commercial brokerage, RE IB, REPE, Development, etc.) I am also seeking advice on entrance in to these fields and the different requirements and skills needed to be successful in each of these sectors.

Comments (79)

3/22/11

Managing Director at the Baupost Group is a pretty good one...

But on a more serious note: As a younger guy / entry level analyst - real estate investment banking at a BB is going to be the highest job around... a position at a very top RE PE firm like Blackstone would have similar pay, too. If you're looking to get into IBD you're going to want very strong grades in a major like finance or accounting, or if you're majoring in something else (preferably something technical, but doesn't have to be), then you'll want an internship or two showing that you have some interest in the business.

Jobs at a real estate developer could be cool too, but they'll pay less. Jobs at places like CBRE / JLL would be another option.

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3/30/11

If you want to be in Chicago and work in Commercial Real Estate, you should be eyeballing Jones Lang LaSalle.

As for the most lucrative areas, this is not the best question to ask. There are commercial brokers who are out there killing it making +$1MM, for example, they aren't your local Remax agent. You can work in any area and make a high wage. It boils down to your skill set and interests. Here are some possible places to start out:

Investment Banking in the Real Estate groups (BofA ML, GS, firms like HFF place capital too)
Life Insurance companies such as MetLife, and Prudential are HUGE real estate investors.
The full service real estate companies such as CBRE or JLL.
Development firms - tend to be smaller and thus harder to find openings with, but there are some large ones such as Related, Hines, Trammel Crow, Brookfield Properties.

Real Estate is a very small world. Luckily, people are personable and intelligent. Find alumni, and set up informational interviews to get the ball rolling. Also, get familiar with ARGUS. It's a clunky piece of software but everyone uses it for doing quick DCF models rather than using excel.

3/30/11

do u have a link for bio of these $1m+ commercial brokers (assuming they are on the web somewhere) just to see who they are and background

3/30/11
kmzz:

do u have a link for bio of these $1m+ commercial brokers (assuming they are on the web somewhere) just to see who they are and background

These guys have profiles on the web typically because they want people to be able to contact them. Check out CBRE, Colliers, etc.
http://www.cbre.com/en/aboutus/pages/ourpeople.aspx

The last entry level broker I talked to was at JLL in NYC and he played QB at an Ivy. It really depends though because it's all about relationship building. It's not a technically demanding job.

4/5/11

http://www.cbre.com/usa/us/ga/atlanta/pprofile/sam...
http://www.cbre.com/usa/us/ny/new+york+lex/pprofil...

Two guys I know that are both Vice Chairmen, about as high as you can climb at CBRE without becoming the CEO. Both guys pull down north of $3-4MM. Commercial RE is an interesting industry. Very few of the top brokers went to ivy leagues and even fewer hold advanced degrees. CRE is mostly an old boys club.

3/28/13

what is the difference between brokerage and reib?

4/16/13

Yakehito:
what is the difference between brokerage and reib?

c'mon guy seriously?

4/16/13

Yakehito:
what is the difference between brokerage and reib?

One's a broker and one's an investment banker. You can tell this from the names "brokerage" and "investment banking"

4/16/13

CRE:
Yakehito:
what is the difference between brokerage and reib?

One's a broker and one's an investment banker. You can tell this from the names "brokerage" and "investment banking"

Apologize for the ignorance but isn't investment banking analogous to brokering... I mean investment bankers broker companies right?

It seems that in RE its just split up between brokers as the dudes selling the properties and reib as the guys raising the debt/equity for deals, often working in concert just as people from the different product and industry groups do at Ibanks. At least that's what it seems like to me after talking to some friends at Eastdil Secured.

I just only became interested in RE--admit the above question was pretty elementary

4/16/13

Yakehito:
CRE:
Yakehito:
what is the difference between brokerage and reib?

One's a broker and one's an investment banker. You can tell this from the names "brokerage" and "investment banking"

Apologize for the ignorance but isn't investment banking analogous to brokering... I mean investment bankers broker companies right?

It seems that in RE its just split up between brokers as the dudes selling the properties and reib as the guys raising the debt/equity for deals, often working in concert just as people from the different product and industry groups do at Ibanks. At least that's what it seems like to me after talking to some friends at Eastdil Secured.

I just only became interested in RE--admit the above question was pretty elementary

I think that some of your confusion is from the way that brokers have a tendency to call themselves investment banks simply as a function of working in the capital markets. Eastdil for example labels themselves as a real estate investment bank, but really functions as a broker. The distinction is whether they are raising public or private capital.

True REIB, like neilcaffrey said above, is raising capital in the public markets, M&A, etc. Same as any other industry specific IB group, just focused on real estate firms.

Brokerage is when a firm raises money in the private market, generally on the asset level. This can either be on the investment sales side (coordinating the sale of the asset) or the mortgage brokerage side (arranging the financing).

4/16/13

are these top brokers basically just extremely social/sales people with huge networks?

4/16/13

jasper90:
are these top brokers basically just extremely social/sales people with huge networks?

Extremely social with huge networks, yes. "Sales" people flame out though - it's corny. They're more like consultants with a bottom line.

Anyhow, top broker or private developer are the best ways to make money in CRE.

4/16/13

What do you think salary would be as a 1st, 2nd, and 3rd year analyst? Assuming your deal flow is average?

4/16/13

jasper90:
What do you think salary would be as a 1st, 2nd, and 3rd year analyst? Assuming your deal flow is average?

Depends on what you do. For REIB and maybe even REPE, it is structured like banking and based on market and firm size like banking. For brokerage and some developers, it isn't structured at all.

4/16/13

CRE:
jasper90:
What do you think salary would be as a 1st, 2nd, and 3rd year analyst? Assuming your deal flow is average?

Depends on what you do. For REIB and maybe even REPE, it is structured like banking and based on market and firm size like banking. For brokerage and some developers, it isn't structured at all.

Oh sorry, I meant to say brokerage. Like HFF, JLL, and cBRE. I get that it is unstructured, any one have idea on a range?

4/16/13

jasper90:
I get that it is unstructured, any one have idea on a range?

$25-$85k starting pay? Not kidding on the variance either.

I think a lot depends on market size (obviously) but also on one's intentions. Firms are aware of the differences between hiring a guy into research to learn the business for 6-12 months before becoming a broker and hiring a guy into research because he's just a back office type of guy. The latter usually gets paid better, in my experience, because they don't care about the person "not staying hungry."

4/16/13

REIB deals with REITs, construction companies, and other RE companies to raise money through the public markets and deal with any m&a between firms. This is the same thing other IB groups do to other companies. Brokers handle the sale of the properties between the firms.

4/16/13

Yakehito:
admit the above question was pretty elementary

It wasn't that bad of a question imo. While I agree most of the larger reibs do the type of work associated with ib's, most boutique reibs do appear to merely be glorified brokers.

4/17/13

Exactly, in markets such as NYC, this market is dominated by brokers.

4/17/13

Interested as well.

4/17/13

I can't help much but props on getting that gig right out of school.

Best Response
4/17/13

http://celassociates.com/prime/wp-content/uploads/... Not much out there other than Glassdoor, you could also see if there's anything in the WSO compensation database. I don't think you're underpaid though.

4/17/13

Agreed, if anything it sounds like he might be overpaid.

OP from what it sounds like you're in a spot a large majority of people on this board would kill to be in. Congrats on the gig. @prospie is right though, the CEL site and Glassdoor are the best sources of info. Not a ton of granularity though because as I'm sure you've seen roles can get squishy depending on the firm you're at. RE isn't known for their extremely defined corporate structure like an IB is.

4/17/13
undefined:

http://celassociates.com/prime/wp-content/uploads/... Not much out there other than Glassdoor, you could also see if there's anything in the WSO compensation database. I don't think you're underpaid though.

Beat me to it. This is the reference point I usually use.

Also, I think OP is very well paid. That's a big bump from year 1 to year 2 and year 3.

4/17/13

VP these days essentially is manager status...like an Acquisitions Manager. I have a lot of contacts in this arena. Generally speaking there is a low range of $95k to a high of around $135k. Plus bonus. I've seen so many different bonus structures though that I'd hate to even comment on that.

PE is very much so production based as you're probably looking to source sponsors. So I would imagine the $200k range is possible but you have to book deals.

4/17/13

Thanks for the feedback I appreciate it. I will definitely take a look through that website real estate compensation survey. Wish there was more clarity but this seems to be the most in-depth I have seen.

My job today mostly consists of sourcing, underwriting, and hopefully closing LP and GP joint-ventures with Sponsors throughout the West Coast. We work with some of the top developers such as Alliance, Wood Partners and TCR.

But I would definitely love to hear from other people about their expectations or what current market salary is for someone with 2-3 years of experience.

BC

4/17/13

I'll throw my hat in the ring.

At my development shop directors are looking at 150 to 200 all-in. We have directors as young as 25 and as old as in their 50s.

VPs have a base in the mid to high 100s but have interest in the deals; ie they collect a generous amount of the fees and sale profit of the deals they source and close. Total comp at the VP level is 500-1.2m+ We have VPs in their early 30s to 50s.

Some shops offer lower base but higher share in the deals, netting slightly higher total comp during the good years.

We don't hire analysts or associates.

At the dev company I interned at years ago analysts were looking at 55-65 all in. Although the pay wasn't IBD, it offered the relatively rare opportunity of breaking into development right out of undergrad. Lifestyle was significantly better too.

I'd say you are way above average for pay considering your experience.

The CEL Associates link is a good one when looking at avg pay. Frankly, there needs to be more focus on those figures than on the rare and exceptionally high anecdotal figures everyone on this forum always seems to be concerned about. To that end, on average RE finance, like corporate finance, still offers high pay when compared to other profressions.

4/17/13

Graduated from Pomona I'm guessing?

4/17/13

and what'd you major in?

4/17/13

First analyst year was at a shop doing a lot of Asset Management, 60k all in. First year analyst with a small group inside of a huge financial institution, all in should be in the 90s. basically 2 years exp.

4/17/13

" Started my career in Real Estate at a Los Angeles Boutique Real Estate Shop as an analyst doing joint ventures for multifamily development as LP Equity. "

Can you elaborate a little more on the latter piece? What were you doing "as LP Equity"? Just picking apart deals for your company that would like to invest money in with a GP as an LP? Why weren't they using that money to be a GP themselves? How did you get all the access to the materials? I assume a GP sourced the deal, your company got a blast for LP contributions and you took the book and did your analysis yourself ensuring the pref and residual split/distribution from sale was accurate and achievable?

4/17/13

@futuremonkey32432344 right across the street at Claremont McKenna and I majored in Economics and Finance. Did you go to one of the 5 C's?

@cre123 We would go and find GP / Developers who needed equity for their development deals. Pretty standard but we would play in the $2M-$10M space which is too small for institutional equity but too large for family and friends. We would find deals through word of mouth of our company, developers, and brokers. Yes my job was spent underwriting each deal along with creating the investment packages to our investors along with due diligence and closing. I would say I was lucky in that I got this job right out of college vs I feel as if in general most people have to go to one of the big brokerages firms prior to jumping over the equity side.

BC

4/17/13

anyone located in NYC who wants an intern for the Spring w/ previous RE Finance experience? Save me the pain of cold-emailing alumni please.

4/17/13

thanks everyone for throwing virtual poop at me

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4/17/13

Great find - thanks for sharing. Would be interesting to see how it varies by market but this is really interesting information

4/17/13

Thanks for sharing, this is good.

4/17/13

I wonder if the northeast location of many of these organizations inflates the comp. I'm located in the Mid-Atlantic and am well informed about different salary levels of present and former co-workers. They are at the low end of the comp ranges in most cases. For example, a project analyst in residential development making $70,000 (median) base and a 17% bonus is simply preposterous based on my actual experience in that realm. Same thing with the Asset Management salaries--preposterous in my neighbhorhood and based on my experience. The only reasonable explanation is that the NY/NJ area drastically inflates these numbers.

4/17/13

I would assume that for secondary & tertiary markets ONLY, the compensation figures would be significantly lower. I mean it's pretty obvious that cost of living will skew compensation.

I am in a primary market, and for the comps that I am familiar with (Acquisitions, Asset Management) this data is close to reality.

4/17/13

As Scholar said the numbers look pretty accurate on primary markets from what I'm familiar with. One thing to keep in mind is that median "Aquisitions Associate" probably have 5-7 years of experience and should not be compared with entry level compensation that a lot of this board is probably working with.

I'm in a primary market and I'll tell you my begining salary was so low its not even on that chart. I started at 50K 50% bonus, then raise to 60K 50% bonus, then 70K 50% bonus (bonus hasn't come in this year obviously but we seem to be on track for another ~50% bonus) for my first three years here.

So keep in mind median experience when looking at median salaries.

4/17/13

SHB:

As Scholar said the numbers look pretty accurate on primary markets from what I'm familiar with. One thing to keep in mind is that median "Aquisitions Associate" probably have 5-7 years of experience and should not be compared with entry level compensation that a lot of this board is probably working with.

I'm in a primary market and I'll tell you my begining salary was so low its not even on that chart. I started at 50K 50% bonus, then raise to 60K 50% bonus, then 70K 50% bonus (bonus hasn't come in this year obviously but we seem to be on track for another ~50% bonus) for my first three years here.

So keep in mind median experience when looking at median salaries.


Totally agree. Nothing about these numbers is surprising ... not the multifamily project analyst or the asset manager comp. And I am not necessarily thinking white-shoe NY comp.
4/17/13

Based on my experience in the D.C. market, these #s are way inflated on the junior end (analyst level) and way low on the senior level, but that could be a reflection of how comp in my area works. I mean, I know what I've gotten paid at certain positions, I know what I get paid now, and I know what my co-workers--more or less--have been paid in the past. These numbers just don't reflect my experiences in the D.C. market.

4/17/13

acquisition #s are more in line with REIT than REPE..

4/17/13

Most of these are on the higher side in the southwest US, but attainable if you work at a decent company.

MF asset managers only make 80k base? seems low for any area of the country

4/17/13

REValuation:

Most of these are on the higher side in the southwest US, but attainable if you work at a decent company.

MF asset managers only make 80k base? seems low for any area of the country

My assumption was that, because they list so many other tiers/layers of asset manager jobs, this would be the youngest and most junior of those - also, Asset Management for multifamily just doesn't seem as cerebral. You're not comparing multi-million dollar commercial leasing decisions, you're not reviewing 5-year Argus projections, etc.
4/17/13

The "High" column seems to be in line with what I have seen for Asset Management at NYC firms.

4/17/13

RockBridge?

4/17/13

I think that's market on salary but light on bonus (market's around a year, give or take, based on what I've seen). I'm giving you big fund/major city numbers...not sure what to think about Ohio. Dramatically lower cost of living, but I would need a premium to move there.

Of course, what you can and should negotiate is equally a function of market pay and opportunity cost. RE PE hiring for acquisitions positions is somewhat thin right now, and many of the big RE PE firms are much less keen on hiring MBAs than their corporate PE counterparts. Not sure of your background, but I don't think I've ever seen an MBA hired without prior real estate experience.

I would probably be cautious about negotiating without a competing offer. Also, as a general rule, I don't think it makes a lot of sense to negotiate on target discretionary bonuses. The range they provide indicates their general philosophy and inclination toward compensation, and I would take that for what it is.

4/17/13

$100 million of new businesses are actually a lot even with 6 years of experience. I know many guys do less than $50 million a year. RE debt funds (or even real estate in general) don't seem to have a standard compensation. Some places do core mortgage but the top originators are paid 3-400k, other places do high yield mortgages but originator are paid 1-200k.

For your question, assuming they have 1st quartile performance, they can easily charge 40bps on average. That is $6 million in fees. So the originators can definitely make 300-400k each.

4/17/13

Development is one of the few areas in CRE that is next to impossible to break into without experience. I would focus on getting acquisition experience first.

Please don't quote Patrick Bateman.

4/17/13

I too am very interested in RE PE/IBD and would love to know about the hours/compenation/etc.

4/17/13

generally, comp is not as hi as vanilla pe/ib. this mostly b/c of the shift in the risk/reward profile for real estate investments AFTER 2008. pere will most def be less lucrative going forward, as returns/carry will diminish, even for investments that perform VERY well relative to the mkt. it will be like this for a while, too.

as far as cutlure goes, most of the guys in the re business in generally tend to be social and friendly while at the same time intensely focused on their business. typically, hrs are not as bad.

if you are thinking pere will be just as lucrative or just as prestigious as vanila pe, you would be mistaken...unless you are working for Blackstone or Carlyle Group's re business. still, vanilla pe would be more lucrative.

---
man made the money, money never made the man

4/17/13

For anyone curious, seems like Pru pay (and lifeCo pay in general) is really low -60kish (for super junior out of college). Would really like to switch from banking to one of the more better opportunity funds - surely the comp has to be better than that? Making 90k now as 3rd yr analyst with assumed 0.8 - 1.1x for bonus..

4/17/13

Marcus addressed this exact topic about three months ago or so. Do a search.

4/17/13

Thanks I did see that, but the reason I was posting was I heard maybe there is some discount in Real Estate PE? Was trying to see if anybody on WSO in Real Estate specifically knew for the large Real Estate guys (Colony Capital, Walton Street, Starwood, Blackstone, Carlyle)

4/17/13

There is definitely a discount to traditional PE but with those top funds expect a slight bump in comp but better and more predictable hours. There is much less of a standard in RE PE though and even at the funds above it can really vary.

Disclaimer here is that I left the industry before doing a post-analyst, pre-mba role so I don't have first-hand data points. Anecdotally though I have heard 100k base, 200k all-in for Westbrook. My guesses would be Walton Street and Starwood to be below that, and BX above that. I know this isn't the best data but hope it's helpful

4/17/13

Thanks fk- that data point is helpful.

I guess if I were to get the 3rd yr to associate promote there'd be some opportunity cost (~$50k) that first year. I feel like at some point if you want to leave to the principal side, you should though. Do you think there is some disadvantage interviewing as 1st Yr associate in banking against kids who are 2nd/3rd yr analysts in banking trying to leave to RE PE?

4/17/13

Yep I think the same disadvantages exist as doing the same for corporate PE. They will be less willing to consider you for pre-MBA associate roles, but you won't have enough experience for post-MBA associate/VP roles. Would def try to get in earlier if your ultimate goal is REPE

4/17/13

Thanks fk, that was helpful

4/17/13

I'm a non-target and work in REPE out of ugrad at a mid 9 figure shop. Blackstone REPE is probably the best opportunity out of u-grad for a non-target.

4/17/13

anyone else

4/17/13

eastdil

4/17/13

in almost any industry the highest paying jobs are going to be the positions that generate revenue (namely sales). My previous company (tech) had 3 or 4 salespeople that we're regularly paid more than the CEO in annual compensation.

You want to make big money, quickly? Be a broker. Broker anything: leases, investment sales, mortgages, ect. Top brokers in NYC easily pull in over $1m+...then again those that suck earn $0.

You asked about highest paying, so that that's how I answered.

Salary wise in a more stable position, I'll have to let others answer that. I expect that it would be the usual suspects, BB REIB, REPE mega funds, ect.

4/17/13
djc225:

in almost any industry the highest paying jobs are going to be the positions that generate revenue (namely sales). My previous company (tech) had 3 or 4 salespeople that we're regularly paid more than the CEO in annual compensation.

You want to make big money, quickly? Be a broker. Broker anything: leases, investment sales, mortgages, ect. Top brokers in NYC easily pull in over $1m+...then again those that suck earn $0.

You asked about highest paying, so that that's how I answered.

Salary wise in a more stable position, I'll have to let others answer that. I expect that it would be the usual suspects, BB REIB, REPE mega funds, ect.

It's annoying as hell to be in a tech company and see sales guys schmooze and fast-talk their way to earn double what a technically-savvy, hard-working, smart developer or analyst makes.

4/17/13
econcomputingCRE:
djc225:

in almost any industry the highest paying jobs are going to be the positions that generate revenue (namely sales). My previous company (tech) had 3 or 4 salespeople that we're regularly paid more than the CEO in annual compensation.

You want to make big money, quickly? Be a broker. Broker anything: leases, investment sales, mortgages, ect. Top brokers in NYC easily pull in over $1m+...then again those that suck earn $0.

You asked about highest paying, so that that's how I answered.

Salary wise in a more stable position, I'll have to let others answer that. I expect that it would be the usual suspects, BB REIB, REPE mega funds, ect.

It's annoying as hell to be in a tech company and see sales guys schmooze and fast-talk their way to earn double what a technically-savvy, hard-working, smart developer or analyst makes.

Sorry, but those guys are the reason 'hard working, smart developers or analyst' have a job.

4/17/13
econcomputingCRE:
djc225:

in almost any industry the highest paying jobs are going to be the positions that generate revenue (namely sales). My previous company (tech) had 3 or 4 salespeople that we're regularly paid more than the CEO in annual compensation.

You want to make big money, quickly? Be a broker. Broker anything: leases, investment sales, mortgages, ect. Top brokers in NYC easily pull in over $1m+...then again those that suck earn $0.

You asked about highest paying, so that that's how I answered.

Salary wise in a more stable position, I'll have to let others answer that. I expect that it would be the usual suspects, BB REIB, REPE mega funds, ect.

It's annoying as hell to be in a tech company and see sales guys schmooze and fast-talk their way to earn double what a technically-savvy, hard-working, smart developer or analyst makes.

knowing how to sell is no less of a skill than knowing how to code or build or design

4/17/13

It's the other way around, arguably (but really, in this business, it is)

4/17/13

Formerly a CMBS/MBS TA - Now international mortgage analyst in AM wing of a BB. 1 year out of college and making around 95k + bonus (bonuses tend to be smaller in my group though)

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