RE focus grad school or find a new job first
A little background: I started working in valuations about 4 months ago. Transitioned from research at the same CRE firm. I am not a fan of the valuation job and I feel like I have already gained the base knowledge I need from it (Argus, cash flow models, leases, market info, etc.). I want to eventually get into AM or acquisitions. I thought a good way to bridge that transition was through going to grad school but I am starting to think I should get some AM/Acquisitions analyst experience under my belt before pursuing an MBA. I was one of those social science majors so going to grad school is an eventual must. My big worry is paying big dollars for an MBA and to come out with a lack of investment experience for the jobs I would want.
Question: Should I just knock out grad school and attempt to get an AM job after or would it benefit my career more by first working as an analyst for an RE investment company than pursue an MBA?
Thanks for the input
Some MBA programs actually allow the RE students to gain investment experience (through case studies, whether it's real money or fictitious money). I will say that you'll face headwinds directly jumping to an AM/ACQ job at a top shop because of the market and because of your background (you will be competing with people who already have IB or REPE/REIT experience with finance/real estate majors). But, that's not to say you can't do it, because you can if you put your mind to it. You have a background that is definitely transferable to AM.
What are you valuing on a daily basis? Direct investments, JV? What kind of risk profile? Any development? Do you just run DCFs or have you branched off and done replacement cost, comps and direct cap valuations? How complex are the properties? How do you get your assumptions? Do you need to build models from scratch? Are you able to do a complex DCF without using ARGUS? Do you have experience presenting your valuations? If you've covered all of these questions and are confident, I'd say you have a solid/above average foundation that will help you if you choose to hold off on an MBA and make the move now or sometime soon. If not, I would just be cautious with saying that you've gained the base knowledge in only four months. Also, valuation is a big piece of ACQ and AM, so make sure you really understand why you don't like your current job.
End of the day, I think you are in a good position and you're thinking the right way. If I was in your shoes and had the money, I would work my ass off and get into a solid MBA program. If I didn't have the money and didn't want to take on the debt, I'd work my ass of to find an AM/ACQ job.
Also in RE an internship during your MBA program doesn't guarantee a full time job like it's does in investment banking.
I would try to get more experience before an MBA. There are not a lot of companies that have RE internships and it's getting very comeptitve. This past summer I saw several Ivy League and top RE MBA program type guys taking internships at places like life cos. Not that life cos are bad but Jesus.
I think valuations is fine experience. You will be able to move after 1/2 years to an acquisitions role. In the end, acquisitions is valuations. After 4 months, chances are you have not learned all you need to know.
Also, Life Cos are some of the largest buyers of real estate in the country. They may have a sleepy reputation, but they have more money dedicated to real estate, whether that be debt or equity, than many private equity players. Also want to note, you will get very well respected training at a life co and can jump ship to top developers, private equity, etc. after a few years. Bonuses at a Life Co may never be 7 figures, but you won't be hurting for cash and most people never see that 7 figure bonus anyway (doesn't mean you shouldn't shoot for it). Lastly, the lifestyle at Life Companies is generally extremely relaxed and hours are light.
I've been around the block and know about life cos you didn't need to give me the elevator pitch. I'm just saying it is absolutely shocking that kids at CBS (and comparable) think making 40% LTV loans on core buildings is "cool" OR (more likely) it is so damn competitive now they'll take whatever they can get. Don't kid yourself into thinking top MBA students are targeting life cos. 10+ years ago you would have easily been able to get in to an RE opportunity fund from CBS if you wanted.
I hear what you are saying. I want to preface this so you know I am not arguing, however, recruiting is very different from 10+ years ago. That is why top MBA students now target Life Companies. The top Life Companies invest throughout the stack in different strategies. Many of them have third party capital. Is 40% LTV loans on core assets vanilla?-yes, but some of the Life Co.'s have construction and mezz lending which is a sought after area. They also do development and value add deals on the equity side. The Life Co.'s are very attractive opportunities and if you don't want to stay at a Life Co., you can lateral to a fund that focuses in an area you want to focus on.
Yeah I think it's more a function of there not being a lot RE companies that have SUMMER INTERNSHIPS and life cos have a lot of them in different offices. Pru has been doing this for a long time (undegrad too) and getting solid guys. Maybe it's just that the other ones are catching on.
And the growth of the RE major + people realizing corporate finance is boring as hell and boom
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