CMBS Compensation / Impact of Situs on CMBS Jobs

the First part of my question pertains to current CMBS compensation at the analyst / associate level. I've done some searching in the forums here but most everything relating to CMBS salaries seemed to be pre-2012ish. As most of you know, the conduits have seen a massive resurgence lately so I'm wondering what more recent hires are getting? Preferably at the new analyst, and associate (or 2-5 years of experience) level.

I read an article awhile back about how many people working for the BB CMBS shops are actually contractors from Situs. This obviously allows the banks to throttle up or down their staffing much easier than having actual employees based on what their demand is. How prevalent are Situs employees or contractors overall in the BB CMBS shops? How does the compensation for comparable jobs at Situs compare to the ibanks?

Thanks

 

I second what Raz and tobeornottobe said. Most people use them as a check. I know of one to two large banks who hire them as contractors and they are their analysts. As far as comp, I'm not sure what the situs contractors get paid. Associate level with 3-5 years experience can pull in anywhere from 150-400. Obviously it really fluctuates on the firm and how many deals you originate.

 
Best Response

Situs is used as a means to reduce internal overhead costs. A lot of the employees at small lean CMBS origination shops utilize Situs for due diligence outsourcing, and do a small amount of due diligence in house. Their employees generally source and structure the deals. At big banks however, a lot of employees in the conduit are employed by Situs, but sit at the bank. Their compensation is similar to if not the same as on balance sheet employees, including bonus (although it is probably all cash rather than partial stock). Basically banks have to allocate overhead (i.e. accounting/legal/compliance) to each groups headcount, so if a group has less on balance sheet employees their expenses are lower.

 

From what I've heard, DB and UBS do contract employers somewhat from Situs in their CMBS groups. The people that I knew though did not seem to have a negative impact on comp, but they did feel more pressured in a downturn. GS and JPM do not contract employers and a friend of mine at one of those confirmed a increase in base salary commensurate with their classic IBD counterparts.

 

Reading this makes me wonder if anyone actually knows what they are posting about.

Situs is one of many 3rd party UW firms. Most BB use these firms for underwriting purposes because of what thisguy22 said.

 

A buddy of mine was a CMBS originations analyst at a top life-co and did $60K base + 20% bonus his first year (left after that); note that's a reflection of the work-life balance (think 50-60 hours/wk, no weekends)

 

hours and comp vary pretty significantly. The above $ for Lifeco actually sounds pretty accurate. Lifeco pays very different but is less intense. Hours are normally always choppy depending on the pipeline. I have buddies that would be putting in 30-40 hours one week, get slammed with deals and end up 90+ the following week. Also depends on the focus of the originator. The more complex the deals, the more painful for the analysts. i'd say a decent run of thumb for a year1 analyst is $100-$135k net avg 55-60hrs /wk. I never worked for a true CMBS originator but originated a lot of CRE loans, a decent portion of which was securitized. In my experience, the first 3-6 months are relatively rough. After that, i could crank out deals at an insane clip but i also had a lot of real estate experience. Regardless, the learning curve should be steep and once you get in the swing of things the work is a lot more manageable.

 

Some life cos have hybrid AM/origination jobs.

Life co analyst (focus on b-notes/single asset deals) - 80k + 25k bonus - about 40-50 hrs a week for a 2nd year. (1.5 billion portfolio + 250 million in new purchases a year)

Life co associate (AAA focus) - 95k + 45k bonus - same hours. (2 billion portfolio + $300 million a year in new purchases).

 

Some life cos have hybrid AM/origination jobs.

Life co analyst (focus on b-notes/single asset deals) - 80k + 25k bonus - about 40-50 hrs a week for a 2nd year. (1.5 billion portfolio + 250 million in new purchases a year)

Life co associate (AAA focus) - 95k + 45k bonus - same hours. (2 billion portfolio + $300 million a year in new purchases).

[/quote] What do you mean purchases? If you're talking about buying notes, I didn't think that was common among lifecos.

 

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