Real Estate Investment Banking/REIT/Real Estate Private Equity Info?
Hey,
So basically, I went to a career highlight today at my school and realized that I might have an interest in the real estate industry. The career highlight was about being a realtor/appraiser which isn't really my thing, but I did a bit of reading and learned about REITs, investment banking in the real estate area, private equity dealing with that, etc. Here are my questions:
1. I'm still a bit confused about REIB and Private Equity in real estate, so can anyone give a general idea of what they do?
2. I go to a non-target, so I was wondering how hard it is to break into these specific groups. Do I need a masters? What are the typical admission standards for the absolute best MSRE programs like Wharton, Columbia, etc.?
3. What is compensation like in this area?
thanks
Real estate is going to be an
Real estate is going to be an ugly place the next few years. It will be hard to get a job and pay will be crappy compared to pre-recession levels. Still, it is important to be interested in your work.
You do not need a REMSF to
You do not need a REMSF to break into REIB or REPE and generally an MBA is a better overall degree even if you are interested in focusing primarily on real estate. REIB is not that much different from traditional IB except for the fact that you are focused on real estate transactions, REITs, and companies that have a tremendous real estate portfolio (i.e. Target). You will become familiar with debt financing, the non-existant CMBS market, cap rates, NOIs, FFO multiples and other valuation techniques associated with RE.
Compensation is similar to other industry groups in IB and PE.
Tabula is only partially correct. The RE landscape will continue to be ugly but the environment lends itself to a variety of distressed opportunities. Not to mention that credit is loosening up slightly (CMBS market and pre-2008 LTV levels are out the window). While transaction volume remains low (primarily due to the bid/ask spread between buyers and sellers of assets, absence of credit, etc) a 2 year REIB analyst stint at an IB or REPE shop would be an interesting experience. PM me if you have any specific questions. Coming from a non-target will be difficult but not impossible. Good luck.
i only have 18 months exp in
i only have 18 months exp in re finance, so take this with a big grain of salt:
1. generally, reib raises equity and debt capital sources for investors and reits, while repe invest equity (and sometimes debt for investors) in re. reib and repe operations are all but dead. i dont think reib groups will have a significant fund-raising impact in re to justify their value, today and going forward. reib is more or less a realllyyyy expensive way to raise capital, both debt and equity sources. repe is facing the same problem pe is facing: sellers are asking too much and buyers are asking too little = no transactions = no comps = less certainty on pricing = sellers asking too much and buyers asking too little = death spiral starting all over again etc etc. repes are REALLY screwed, theyre the equity in the capital stack. and some repes did exactly what reib did (source debt capital for investors), and vice versa.
reits are publicly traded companies that invest and operate in re only. the reit sector is kind of a mixed bag, some reits are really sucking while others are chugging and raising funds with ease. if you can get a job in a good reit, def go for it.
2. depending what sector of re you plan on getting into, going to a well-represented local school may work to your advantage. like i went to usc because i wanted to work in re in la, which worked to my advantage (i will elaborate on this) BUT if your focusing on the sexy groups (morgan stanley, gs's re group, and (very few) others) the pedigree is usually typical of ib and pe. those are hard to break into...which may not matter much as those specific groups are sucking wind right now.
if you are really interested in re, than by all means, go for the ms in re over an mba. the only way an mba would be an advantage would be if you want to break into the sexy groups (and you'll probably need a top 15 mba) or keep your career choices open in case you change your mind. the top 4 ms re programs are MIT, USC, Cornell, and Columbia, in that order. Columbia's program kind of sucks though, which is weird. those are the only 4 programs that are really worth going to.
3. compensation in re varies. like a lot. but for reib and repe, pay was similar to what you would get working regular ib and regular pe.
finally, my advice to you would be to NOT focus exclusively on reib and repe, for a number of reasons, but mostly because these groups kind of suck right now and because you dont have the sexy brand name degree. i would focus on a regional, relatively large investors that works you area, or in a large metro like out in portland. i mentioned before that location can work to your advantage. you would have a tough time trying to get a job in re investing/finance here in LA, but i would probably have a tougher time than you trying to get a job in portland....regional affinity to local schools tends to be strong in the re investing/operating industry.
hope this helps.
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man made the money, money never made the man