Real Estate Investment Banking - Exit opps?

fritos:

mostly into REITs, that's about it, but this is only from BB's real estate group, i have no idea about real estate.

Of course MBA is always option.

no. REITs dont pay very well, that would be a step down from a BB. also, the OP was not talking about a BB. but in either case, best exit opps would be REPE. other exit opps might be developmen, RE investment sales, maybe something in the mortgage mkts...

mr1234:

hey i am curious, what do you mean by a large real estate co. with an investment banking division? dont think i am aware of such a thing. do you mean like cbre with their capital mkts group?

i remember a couple years ago when cushman & wakefield was hiring for their "investment banking" dept. i don't remember exactly what they did, but it was NOT at the corporate level. i.e. it was not equity offerings or bond offerings or mergers of real estate companies. it may have been structuring JVs/raising money/etc, but i dont remember.

if you want to be an investment banker, be wary of this kind of puffery in the real estate world. for example i think northmarq capital has called themselves an investment bank, and northmarq is no morgan stanley, that's for sure.

finding_nemo:

...but also heard from others that the skill sets don't quite match as in REIB, you do valuations mainly on corporate (not the asset itself) whereas valuation is more asset-focused in REPE.

Also, it is impossible to go from REIB >> generalist PE?

finding_nemo:

I've read from many posts that REIB >> REPE would be the usual route, but also heard from others that the skill sets don't quite match as in REIB, you do valuations mainly on corporate (not the asset itself) whereas valuation is more asset-focused in REPE.

Also, it is impossible to go from REIB >> generalist PE?

The first statement really depends on your bank and the deals you get staffed on. When you are dealing with a small private portfolio of assets, you will be doing be asset level work. When you get staffed on the refi of an unsecured loan, well you get the idea. So, it's very common to go from REIB to REPE.

Other exit opps include REITs/REOCs, other real estate oriented companies, real estate focused hedge funds, long-only REIT Asset Management, or anything you might go to out of banking from another group (random finance-y jobs).

Yes you can go to generalist PE, it is less common due to your skill set and you would benefit from a third year in a different group usually. Best way to get into generalist PE is to do lots of work with the mega-funds and their RE groups. Just use that as your in to the firm overall.

Thanks you so much for all of your thoughtful responses! :)

bump for more responses

Interested as well. Thoughts anyone?

Even at a lower/mid-tier firm, I'd still say real estate PE or mezz, real estate arm of a hedge fund. I've seen guys go to work for REITs. Plenty of interesting RE stuff you could do, but it would probably be hard to switch out of the industry. I think this has been covered in old threads

csf_45:

I have seen discussions relating to this topic before, and I have read through them, but I am going to get a little more specific with my questions. I am about to embark on a RE IBD Summer Analyst role at a BB and was wondering if what I read on this forum is correct - mainly that the only exit opps from this field of work are REPE, RE concentrated HF, REITs, and the like.

I know RE is very industry specific, but the thought of sticking with one industry from college through the end of my career is, quite frankly, scary for someone at my age. Don't get me wrong, I *think* I like RE from face value, but how much can we really know at this point? Would it be challenging to get interviews from other groups next fall because of this? Likewise, if I do a two year stint at a top tier place, is there any shot of transitioning to corporate work (IBD, PE, Mezz, HF, anything buy side)? Finally, would the old "Grad School Career Change" or intense networking (within and outside a firm) give me the leverage to potentially flip my industry?

I find it hard to believe that once you're in RE, you're always in RE. Not that it's a bad thing, I wouldn't know yet, I just want to iron out all the details prior to starting on this path.

Thanks in advance for your responses, they are much appreciated.

If it is only an internship I have a very hard time believing you will be stuck in RE. That is assuming you so easily get a FT offer in RE. Wait for someone else's definitive reply, but I am going to assume that unless this is FT, then you don't even have to start worrying about being stuck in RE.

Thank you for the responses. I am not trying to count my chickens before they are hatched, so to speak, I just want to get a feel for the possibilities. Looking forward to further opinions on the matter.

It's just SA dude ...

As an incoming summer analyst going to a BB you should still have some maneuvering room if you want to make a switch out of real estate. At most banks, if they give you an offer at the end of summer, you can often opt to switch groups. This can be a very tricky and political process, and you should never let on any interest in another group until you've secured an offer. If you are able to switch into a generalist group for full-time (either at your current bank, or laterally), then you'll be in position to recruit for generalist type PE opportunities. Of course, at some banks, opting to lateral to another group could result in you ending up in another niche-y sector like FIG or Power, where you might regret not sticking in real estate.

If you end up in real estate full-time, there is a very good chance you will be tracked into this sector, but based on your original post, it seems like you might be missing the big picture for the underlying reasons here. If you absolutely hate real estate, there are tons of jobs out there for ex-investment bankers who want to do something else. Also, you can generally lateral as a third-year analyst or associate to another sector within investment banking (or move to another bank in another sector).

But if you want to move to the buy-side, and specifically private equity, you're talking about a fairly narrow subset of highly selective firms that have their pick of IB talent. The best firms generally don't like to hire associates, and they generally don't like to hire MBAs without pre-MBA PE experience. In other words, PE firms generally like to hire--and get their pick of--the top analysts in relevant industry groups. If you perform decently well as an analyst in the real estate group at a bulge bracket firm, there is a pretty good chance you can get an offer at a top RE PE fund. In general, unless you hate real estate, that offer is probably going to be a lot more attractive than going to some second or third tier buyout or mezz fund that's struggling to raise money, or slaving away for four more years as a banking associate in another group, or going to get your MBA with no buy-side experience.

SA wise, I doubt you're going to limit yourself.

If you do a FT 2-3 year analyst gig - most likely pigeonholing yourself.

Thanks for your thoughts and advice, it is very helpful. I am learning a lot from your comments. I know it is just SA, but the time to think/build a strategy is before the fact, not after.

So from what I gather -- nothing is impossible, but it is more improbable to move to a generalist PE spot after doing something as specific as RE. But wouldn't something like FIG be the same scenario than? I would think that working on Gaming/Lodging deals would be even less pigeonholey than FIG. Also, would it be easier to get into a generalist role at a MM or even smaller PE type gig, since these are not as structured (to my knowledge).