PE RE Asset Management vs. REIT Acquisitions

I've gone through the full interview process for (1) an Asset Management role within a MM PE RE fund here in Chicago and (2) an acquisitions role for a top healthcare REIT. Any opinions on which route would be more beneficial for both short term and long term?

 

MM REPE like GEM or something? I'd say look into the job description of the AM role. If it would have you basically doing property accounting and sending reports to investors from the property management team, then i'd be hesitant.

However, some AM positions handle refis, dispos, manage developments (from the capital partner end) and get heavily involved in the acquisitions process with due diligence and helping underwrite, since a lot of them know their markets better than the acquisition team. This type of position would allow you to transition into acquisitions much easier if you'd like. you prob also get paid more than other AM roles.

healthcare REIT could be interesting, but getting experience with multiple property types is helpful too

 

I appreciate the feedback Neal. You were spot on with the second description. This REPE role would involve hold/sell analyses with refis, back-end deal side with dispositions, and everything along the way to help realize the value that acquisitions forecasted. They've also mentioned that AM does work with the acquisitions team to provide insight for what they see in the markets and their portfolio. The property-level accounting is handled by a separate accounting group.

 
Uncle_Drew_02:

I've gone through the full interview process for (1) an asset management role within a MM PE RE fund here in Chicago and (2) an acquisitions role for a top healthcare REIT. Any opinions on which route would be more beneficial for both short term and long term?

Asset management is the most boring thing one can do in real estate. I did it for 18 months and hated every minute of it. Yeah, we worked with dispositions and refinances and everything your job description provided--that's all a distant secondary aspect of the job.

 

again it depends on the group. i know people in AM where that is not a distant secondary. although this shop has high deal flow so there are plenty of sales to work on and they have dozens of large developments, which are also very interesting to work on. occasionally they source and run their own deals too, so you can get great exposure.

they either stay in AM by choice or go to acquisitions at the same place. if they arent able to move to acquisitions they seem to have no issue moving to other shops doing acquisitions, or b school.

generally acquisitions is better, but you have to really figure out what type of stuff AM handles at the particular company. i agree it can be wildly dull but some groups place more emphasis on that group than others, and these places break the mold. its not typical but keep an eye out these jobs are pretty solid.

 

If the REIT is the large healthcare that I think it is, go with it. They have one of the best team in the country and the CEO is top notch. You will have a lot of doors that will open if you decide to stay in Chicago.

 
Best Response

I want to point out the obvious.. that the AM role is a direct route into REPE (assuming that this MM firm has a solid AM department because not all AM branches of shops are equal). Understanding asset management is a valuable tool to have. Yes, it is easier to go from acquisitions to AM vs. the other way around.. I am just unsure if the healthcare REIT would provide you the flexibility of working in different asset classes & different risk spectrums as the MM REPE firm will expose you to.

 

From the discussions I've had, this firm is not structured as 2 separate silos. AM has its hands on deals from the very beginning, until disposition. I am viewing this as a great opportunity to get into the REPE world, and gain direct exposure to the assets and how PE works. I guess this begs the question of how REIT experience is viewed compared to RE PE? Also, anyone have any idea what comp I should expect if I get an offer? All information I've found is based more off acquisition roles. Neal, any color on this?

 

if the AM team is as integrated as my example before, then it comes down to what type of role you find more interesting and possibly the name brand of the firm.

I'm not too sure on how pigeonholed you would find yourself working in healthcare. Obviously starting out in office or a multi-asset class role would give you the best mobility and connections. Remember you're going to be dealing and networking with people in the healthcare RE industry.

However, if the recognizability of the REIT firm stacks up along the likes of of SL / Vornado like maddux said, then that makes a pretty strong case for the blue chip name over the MM REPE, especially since its acquisitions.

Even tho I made the case for AM earlier, you really have to know what kind of group you're getting into. the AM group I mentioned was at a large well-known core investor and other groups in the industry know that the AM team gets good exposure to all aspects of the investment. In addition to making sure you get the relevant all-inclusive experience in AM, it would be helpful to know the path some of the AM team there has taken, if they even leave. You should make sure that the greater industry thinks of that AM group as more than glorified accounting.

As far as comp, I've heard different things in different markets. Gateway markets can put you up around 60k - 70k for a first year plus a 5-20% bonus, but smaller markets you will make less. But that's just a few data points. the RE industry is so variable it's hard to categorize it like IB or other finance roles. Honestly, if you get offers from both, comparing comp might give you an idea of what they expect out of you too. A crappy AM job is likely going to give you crappy comp, where the better AM roles tend to pay more

 

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