How "hands on" are REPE firms?

I work in REPE so will give you a view based on my experience, but others might see things differently. I think a role in REPE acquisitions is a great way to see the business side of real estate.

How hands on are REPE firms?

It depends on how they are set up, the strategies they pursue and what asset classes they acquire. t also depends on what country you are doing deals in. All good REPE firms will be hands on in terms of investment / key decisions, but some will be less so in terms of the operational / technical aspects of managing the assets.

Some are more vertically integrated than others. Some REPE firms have large asset management teams, but others do not and mainly rely on JV partners or third party managers to take care of executing the business plan. Generally REPE firms will partner with developers if they enter into development deals. Also, remember that there are some REPE firms that pursue corporate deals and they will have even less involvement in the assets on a day to day basis.

What REPE firm's generally look for is control of the investment and the major business decisions (i.e. hold/sell decisions, business plans & budgets, all refinancing decisions, major lease decisions above a certain size, etc...). Basically, the PE firm calls the shots on the decisions that matter. So if you are looking for a role where you are talking to architects, planning authorities or tenants on a daily basis than an acquisitions role in most REPE firms probably won't be for you. In an acquisitions role you will be dealing more with investment brokers, bankers, lawyers, other RE owners / operators and investors.

Options for someone who wants to be "hands-on"? - REPE Asset Management: Bear in mind that it is generally much easier to go from acquisitions to asset management rather than the other way around. Also, the pay tends to be better in acquisitions and I personally think it is a better training for someone who wants to run their own firm / RE business the future due to the contacts you could make.

• REITs (e.g. Vornado, Boston Properties, British Land, Hammerson, etc...): This might be more interesting than REPE asset management in terms of getting to work on the portfolio as you might own the assets for longer and generally REITs manage all operational aspects of their portfolio. Again, I would highly recommend entering in on the acquisitions side of a REIT if you are able to as it will give you more career mobility and better access to senior management. Some REITs develop their own property as well so it is probably a better idea than joining a small developer who has a cyclical business model.

• Established Private Real Estate Companies (e.g. Tishman Speyer, Related, Hines, etc...) Usually owner run and have a different culture from company to company. Generally they are financed from their own funds, a series of specialised GP/LP type funds similar to REPE firms and/or they raise capital / do JV's with institutional investors. These companies tend to be more operationally focused than REPE firms, but their cultures, compensation and the way they are set up will vary more from firm to firm. The better of these kinds of firms are reputable and pay well. These kinds of companies also come up with a lot of the development projects you see around you, so if you are interested in that these are great firms to work for.

• Other small time developers (i.e. with only a few projects / no third party capital/funds business or investment portfolio) You'll probably very "hands-on" if you get into one of these firms and they actually have a project that they are developing (big if), but even if you do you won't be paid much and will find it harder to move to other roles unless it is a brand name firm. The majority of these projects don't get financed these days so I would be cautious.

• Real Estate Investment Funds, insurance companies, etc... (CBRE investors, LaSalle, Legal & General, etc...) Generally these kinds of institutions will not be operationally involved.

What happens after an REPE firm deploys capital / makes an investment? Some firms have separate acquisition and asset management teams, others combine the two. Generally firms that are more hands on will separate the two. Bear in mind though that REPE firms are very lean so there is a lot of interaction between teams.

During the acquisition process the acquisitions team (working with input from advisors or the asset management team) will have identified various areas where it can improve the asset physically, financially, or through the legal process (leases and planing approvals). If an asset requires a lot of physical work (e.g. change of use, expansion, etc...) than the asset management team or JV partner will be responsible for implementing that, but will always come back to the MD / Principal of the PE firm (usually an acquisitions guy) or the investment committee of the PE firm to approve the course of action.

Generally it's the acquisitions / investment team that will decide what deals acquire (propose to the investment committee), negotiate JV terms, raise debt financing, and will decide on refinancing / exit.

Trying to break in to REPE If you are still at university and think that REPE might be for you I would suggest networking to try to get an internship and find out what it is like. REPE hiring tends to be more needs based and less structured than investment banking. Networking matters a lot in real estate. At the junior level brand names matter (do people know the firm you worked for) and modelling skills are essential.

A lot of the bigger REPE firms and REITs recruit investment banking analysts so that might be a way to get in.

There are a few old threads here about REPE that are worth searching for and checking out. Also, see websites like selectleaders.com or efinancialcareers.com to see what kind of RE jobs are out there and the roles/skills required.