Finding a path to REPE.

Basically I've just made up my mind that I want to break into the Real Estate business upon graduating undergrad, and hopefully moving into Real Estate PE down the line. The issue is I'm a rising senior and don't have any experience directly related to RE.

Stats:
-Rising senior at non-target school in Boston (BU/Northeastern)
-Dual concentration in Finance & Accounting. 3.5 GPA
-Leadership positions in finance clubs etc.

Internships:
Trade Support at big AM firm in Boston
Interest Rate Derivative Sales-trading at a MM in NYC
Financial Leadership Development Program at a F10 (Current internship, not done until July 13)

Basically none of my experience points to a career in Real Estate and this worries me because I will only have the fall FT recruiting season to secure something that will put me on the right road. Enough whining, here are my questions:

1) What concrete RE related activities can I realistically put on my resume between now and FT recruiting season? (ex: Argus experience, organizations I can join etc.) I've already rearranged my schedule for the fall to get myself into a high level RE finance course but putting current relevant coursework on a resume won't turn any heads.

2) How are full service CRE companies like CBRE/JLL viewed by REPE firms? CBRE has "The Wheel" program, is this any good? I imagine what business line you're in matters quite a bit but do REPE firms hire off the capital markets desks of these places like they would out of REIB groups?

3) Are there any strong REIB boutiques/MM shops in NYC/Boston that don't have generalists pools? Meaning you apply directly to work in a RE group (nothing wrong with generalists pools, I just feel as though I can't compete for the few FT spots at the BB and elite boutiques).

I apologize for making a huge "Look at me!" thread but there seems to be quite a bit of knowledgeable people roaming this forum when it comes to RE and I'll take whatever help I can get. Thanks for your time.

 

Why REPE? The Interest Rate Derivatives S&T internship sounds legit and I think working at an MM in trading would be really nice. I'm working to get that type of internship my junior year. Just curious though, how did you go from trade support, which I thought was generally a back office role, to a front office S&T role? Anyway, great job on the internships fellow non-target!

 
Best Response

The world of private real estate investment is fairly broad, and so depending on what you are hoping to do in real estate, there are a lot of options. One subset of that space is the global/national opportunity funds which is what I think of as "real estate private equity." These firms are sometimes part of larger multistrategy PE sponsors (Blackstone, Carlyle, TPG) or investment banks (Morgan Stanley, Goldman, though these are dwindling), and a some are independent (Starwood, Walton Street, Westbrook, Northwood).

Of these firms, I know MSREF, Starwood, and Walton hire undergraduates (but from very select schools). The vast majority of these funds recruit analysts from the real estate groups at investment banks.

To answer your specific questions: (1) I don't know what organizations you might have access to and I don't think there's much you can do in the given timeframe. Knowing Argus is helpful, but not particularly necessary. Anything you can do to demonstrate an interest and commitment to the industry might be helpful. (2) I can't recall meeting any junior hires from the real estate brokerage firms like CBRE/JLL. Sometimes RE PE funds will hire more senior level people from these places. (3) There is one strong REIB boutique, if it can be called a boutique, and that is Eastdil Secured. They are sort of a brokerage firm, but they don't do leasing, only investment sales and debt/equity placement, and they are a subsidiary of Wells Fargo. I have seen well-known PE funds hire their analysts. You are better off taking a job at a middle market investment bank in the real estate group than going to a brokerage firm.

Again, I have tailored these responses toward an interest in a very specific subset of private real estate investment. There are a host of rewarding career options in real estate that fall outside of these recommendations. Good leasing and investment sales brokers at some of the firms you mentioned (CBRE, JLL, etc.) in good markets make a fortune and have a great lifestyle.

 

Thanks for the response re-ib-ny.

So it seems like the best places to be in to move into REPE are Investment Sales and Debt/Equity Placement (Capital Markets) at a RE focused Investment Bank. Would this be an accurate generalization?

I've also been told it's important to find firms that work at "the asset level". I'm not entirely sure what this means.

I downloaded the Argus DCF free trial and I'm going to try to find some free resources out there to get me started. I also purchased "Real Estate Finance & Investments: Risks and Opportunities" by Peter Linneman and I'll start to work through that as well.

 

Asset-level means working with properties as opposed to corporate-level advisory where you're working with REITs and portfolios. While you would think that asset-level experience would be more relevant to private equity, the reality, in my experience, is that RE PE funds prefer to hire investment banking analysts from bulge bracket Wall Street banks (whose experience is largely portfolio-level) rather than analysts from brokerage houses (whose experience is more asset-level). That's just my observation.

There aren't really any "investment banks" that are real estate-focused, the one exception being Eastdil (and they are really a real estate brokerage house that don't do leasing work, and therefore style themselves as real estate investment bankers). Most "investment sales" or "debt/equity placement" is conducted by brokers.

 

Have you thought of targeting MM and boutique REPE funds as another option? Many of these funds target one-off transactions and you would probably gain a solid balance of asset-level and modeling experience. The only thing you might not be exposed to is creating your own portoflio level cash flow model as many of these funds have their own proprietary excel model that exports cash flows from Argus. Also, besides some of the bigger shops, Real estate companies hire during off-peak times and don't neccessarily have a dedicated hiring class every year.

In regards to Argus, its funny because it really only takes a couple of days or a week to learn. However, some companies see it as a dealbreaker if you don't have any experience with it on your resume (only applies to experienced hires though).

 

I wasn't sure how feasible it would be to move directly to REPE out of undergrad, although I have heard of it happening. Does anyone know where I could find a database of Boston/NYC MM and boutique REPE firms I could start cold calling?

Again thanks for the responses thus far guys.

 

Join Urban Land Institute (ULI) in Boston and start networking with people. I believe they have a lot of events and whatnot. May pay a smaller few since your a student, you'll have to look into it. Could be somewhere to start, since you do not have any RE experience.

http://www.uli.org/

I feel it would be pretty tough to do REPE straight out of undergrad without any prior RE experience. Typically, most shops would want someone will prior experience (1-2 years minimum) and also have experience with valuation. An appraisal background is great for someone who wants to make the jump to acquisitions, because appraisers understand how to value property. Not many younger guys want to become commercial appraisers because it can get boring and no big upside, just engagements for a fee. I think its a good stepping stone. Get some experience then make the jump. Check out the Appraisal Institute. http://www.appraisalinstitute.org/

Just my opinion, and what I have come to realize.

 

I set up an informational phone call with an alumni in the Private Capital Group at CBRE in NYC.

The group website (http://tinyurl.com/7cabhtw) says this:

"PCG’s primary service offerings include:

Real estate disposition and financing services
Asset review and financial analysis
Investment strategy development
Due diligence support"

So it looks like the group's focus is connecting sellers with buyers in the private markets. I'm confused though if this is just a niche brokerage group or if the "Investment Strategy Development" and "Financial Analysis" are more core RE Finance responsibilities. Anyone care to wager a guess?

 

CBRE's bread and butter is primarily providing brokerage services and capital markets advisory but they also do direct investing as well through the umbrella of CBREI.

From the looks of the website, it seems it is just a niche brokerage group as you guessed that targets high net-worth investors. See this article: (http://www.mibiz.com/news/in-the-news/18163-cb-richard-ellis-announces-…)

Informational interviews are always helpful but if you want to gain more of the buy-side experience, I would target the institutional side if you are trying to do the investment sales route.

 

I've had two informational interviews in the past two weeks by phone. Both went well and stressed getting an Argus certification if I want to be taken seriously.

Since I'm a student I think I can go from start to finish for a total of $1,438 ($99 for student edition, $890 for beginner + advanced modules, $449 certification advanced bundle). This isn't exactly chump change, but I could swing it if it's necessary. In the view of people in the industry is this a worthwhile expense? I have the free-time to dedicate to preparing and could potentially start my senior year of undergrad with the certification.

 

I think such a role will open up a lot of opportunities in commercial real estate. Eastdil is often seen as the "elite" firm when it comes to asset sales as well as debt placement. It also seems like a "good career" from the people I have met there. From a firm-perspective, probably about as good an entry point to acquisitions that you'll find at a brokerage, but much better to come from banking if you're looking to RE PE. Hope that helps.

 

re-ib-ny, could you expand on the Eastdil exit opps. I know of a few people who have transitioned to elite REPE firms as well as REITS. these come from an extremely small pool of analysts as well. Also, from my experience, a lot of the large players in REPE have very little experience at the asset level, with most people coming from a IB/corp fin background. there are certain advantages to having asset level experience in my opinion, you just have to play your cards right

 
any143:
re-ib-ny, could you expand on the Eastdil exit opps. I know of a few people who have transitioned to elite REPE firms as well as REITS. these come from an extremely small pool of analysts as well. Also, from my experience, a lot of the large players in REPE have very little experience at the asset level, with most people coming from a IB/corp fin background. there are certain advantages to having asset level experience in my opinion, you just have to play your cards right

I agree. In particular, if you are interested in special situations/distressed real estate investments (e.g. shops like Mount Kellett) then a stint at a shop like Eastdil would be highly beneficial as you would have been used to this type of asset level analysis.

Too late for second-guessing Too late to go back to sleep.
 
re-ib-ny:
I don't disagree. I currently work at a firm where I do mostly asset-level work but come from a REIB background. For whatever reason, though, it seems most of the "elite" REPE funds tend to hire from REIB backgrounds and were often formed by people who came from banks. Mt Kellett, for instance, is mostly ex Goldman.

Ouch, I shouldn't have used Mt Kellett as example in my post. It is unsurprising that most of their people are ex GS seeing that the shop is basically the continuation of GS Special Situations Group. Speaking of Mt Kellett, have they done any major real estate deals at all?

Too late for second-guessing Too late to go back to sleep.
 

I was in a similar situation as the OP earlier this year. I networked my ass off with alumni and other real estate professionals (PE, Pension Funds, Brokers, Appraisers) and joined ULI and a few other local industry associations. Through this I was able to build a solid foundation of contacts who are very willing to help out and make additional introductions. Having just graduated from a target school I noticed that there were very few real estate companies conducting on-campus recruiting and most positions are filled on an as need basis where those connections made through informational interviews will be very helpful.

Also, from the several conversations I have had consensus seems to be that Argus is a plus but can be easily picked up while on the job. That being said having that one line on the resume could be beneficial and also demonstrates interest and a commitment to real estate.

 
OB23:
I was in a similar situation as the OP earlier this year. I networked my ass off with alumni and other real estate professionals (PE, Pension Funds, Brokers, Appraisers) and joined ULI and a few other local industry associations. Through this I was able to build a solid foundation of contacts who are very willing to help out and make additional introductions. Having just graduated from a target school I noticed that there were very few real estate companies conducting on-campus recruiting and most positions are filled on an as need basis where those connections made through informational interviews will be very helpful.

How successful was your search if you don't mind me asking?

 
theBEEGEES:
OB23:
I was in a similar situation as the OP earlier this year. I networked my ass off with alumni and other real estate professionals (PE, Pension Funds, Brokers, Appraisers) and joined ULI and a few other local industry associations. Through this I was able to build a solid foundation of contacts who are very willing to help out and make additional introductions. Having just graduated from a target school I noticed that there were very few real estate companies conducting on-campus recruiting and most positions are filled on an as need basis where those connections made through informational interviews will be very helpful.

How successful was your search if you don't mind me asking?

Job Hunt is currently on delay as I did my final semester abroad and am travelling before heading home to begin my career. I have a long list of contacts across the industry that I met with already, are aware of my situation and are expecting me to get back in contact once I return. This is one of the big advantages to informal recruiting.

I was contacted before I left for exchange by the real estate group of a top pension fund where the hiring manager was recommended to get in contact with me from an alumni I met with in the summer. I went through a few interviews but the position was for an immediate hire. This clearly demonstrates the power of networking starting to pay off though.

 
re-ib-ny:
They bought Pac Mutual Center in LA in April for $60MM. They were chasing a bunch of stuff in SoCal for a while.

Thanks. I know that they have been looking at deals and also JV opportunities with REITs but am no aware of them making any major (100mm+) acquisitions. They must be under a lot of pressure right now to deploy the $4 b they raised for their fund. It is gonna be hard replicate their track record from GS Special Situations.

Too late for second-guessing Too late to go back to sleep.
 

Has anyone found any specific books to be helpful/interesting? I'm currently reading through Real Estate Finance & Investments: Risks and Opportunities by Peter Linneman but I'd be interested to hear other recommendations.

 

"Real Estate Finance and Investments" by Brueggeman and Fisher was used as the main text in my real estate finance and investments class. Pretty good with several online additions (excel templates ect).

A good book that outlines different careers within the industry is "The Inside Track to Careers in Real Estate" by Stan Ross.

and other good reads that are a little more entrepreneurial...

Confessions of a Real Estate Entrepreneur by James Randel

The Real Estate Game by William J. Poorvu

 

there's nothing different about your "story" from what i can tell. you're just a college kid. not sure what the special context is. just get the best RE internship you can. if it were me, i'd network my ass off and go for BB REIB next summer. as long as your GPA isn't a 2-point-something.

 

At my firm (and I believe generally), Associates will take first look at resumes. If they impressed, they'll circulate. I personally would not be reaching out to investment shops until you get experience elsewhere. The reason undergraduates typically do not work in REPE out of school is because these firms do not have formal training programs like large banks, and the teams run lean and do not want to spend much time training employees. That said, the second you mention you have no experience, they will find a way to cut the call short (if you are lucky enough to get them on the phone).

This is not meant to be discouraging, but rather suggesting to use your time wisely. Take baby steps - REFM courses, RE Finance textbooks, RE courses at your school, attend networking events thrown by organizations such as ULI and NAIOP. Build a foundation that can make you helpful to a firm. Unpaid interns are a dime a dozen - MBA students from schools like Columbia are among those fighting for those same unpaid internships.

I'd spend most of your concentration gaining some foundation and then trying to get ANY internship - Leasing, AM, Acq., Dev., portfolio management, Project management, Construction etc.

 

There is no linear path to RE PE in my opinion. You can go on Linkedin and see the many different career trajectories that led these people to their current roles in RE PE.

One thing that is repeated as the credited answer on this board and others like it is if you are going to get a Master's in Real Estate (which is being listed more and more as a desired or required alt to an MBA in Finance for RE roles) and want to land a top job afterwards you must must be tapping the school's extensive network (classmates w/ re backgrounds and better yet working adjuncts) for internships opportunities while you are in the program and cycle through at least 2 and better 3-4 internships in an investment capacity before you graduate.

If you do this then you will have both experience, contacts (x each internship's employers plus all the parties you came into contact with during your stay be it other jv partners, lenders, funds, re attorneys, brokers, etc. and even their contacts) and a credential (which is req for advancement in many places beyond associate level). It is all about those internships (gives employer comfort that you have been signed off on by other investment professionals and possess practical skills to be applied day-one) and the connections (exponential given the amount of internships and connections of connections) which will help you land something solid after graduation.

 
BakersDozen:

One thing that is repeated as the credited answer on this board and others like it is if you are going to get a Master's in Real Estate (which is being listed more and more as a desired or required alt to an MBA in Finance for RE roles) and want to land a top job afterwards you must must be tapping the school's extensive network (classmates w/ re backgrounds and better yet working adjuncts) for internships opportunities while you are in the program and cycle through at least 2 and better 3-4 internships in an investment capacity before you graduate.

What do you mean internships in an investment capacity? How would I go about getting 2-4 internships before I end a 3-5 semester masters program?

 

superandy241, please take a stab at looking at linkedin and see how successful MSRE post-grads broke into RE PE or RE IB. The theme will start to appear in the Matrix. One of the overarching things that they have in common is that they made sure they had multiple internships during grad school.

Take this successful candidate (blue chip internship plus being a graduate assistant and co-chair to local ULI) as one example of many:

http://www.linkedin.com/in/sarahxumcgill

Investment capacity meaning doing analytical work such as underwriting re investments in excel/argus/etc,

 

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