Real Estate Q&A
PE
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(Gorilla, 513
Points)
on 7/2/12 at 5:00am
So the deal I have been working on won't close by the end of the year. This means I'm going to have a few slow weeks heading into the holidays and will need something to do. I've been getting a lot of PMs about Real Estate lately and thought it would be good to get a good Q&A going on RE.
Ask anything you want about RE or RE finance and I'll do my best to answer. International Pymp, Mr1234, VT4ever and the other RE focused monkeys can also chime in to help.
Thanks,
RE_Banker






What jobs in the finance
What jobs in the finance sector would best position you to get the experience needed to start building your own real estate portfolio? (specific firms would also be useful, if any)
What would you personally consider to be 1- the best/most respected RE/RE Finance firms and 2 - the best compensated RE/RE Finance firms.
Also, what advice do you have for somebody trying to get financing for their investment properties (I know this is a really broad question but bear with me). I'm referring to both residential/commercial RE.
thanks for making this thread by the way.
steve001 wrote: What jobs in
What jobs in the finance sector would best position you to get the experience needed to start building your own real estate portfolio? (specific firms would also be useful, if any)
What would you personally consider to be 1- the best/most respected RE/RE Finance firms and 2 - the best compensated RE/RE Finance firms.
Also, what advice do you have for somebody trying to get financing for their investment properties (I know this is a really broad question but bear with me). I'm referring to both residential/commercial RE.
thanks for making this thread by the way.
1. The best jobs for learning how to build your own real estate portfolio will be smaller private REITs/REOCs and possibly working for one of the brokerage firms that deal smaller assets. Unless you have a few million you are going to start by buying small multi-family residential or strip malls. The skill sets you want to learn are asset and property management skills. The small REIT/REOCs will give you those skills i.e. they will teach you about finding the right tenants, setting up the leases, basic due diligence, and bank financing while the brokerage experience will give you local contacts to help you source deals. I spent a summer in my early university years working with a well know brokerage firm in the small retail team ($1-15mil assets) and basically they called their friends first to see if they wanted the assets and if not, that is when they would do wider marketing. In terms of specific firms - it depends on your location. Remember RE is very local, especially when you are dealing with smaller assets.
2. Best RE firms - it gets very specific on geography and sub-sector focus. In the US, the top REITs include Vornado (Diversified), Simon Property Group (Retail), Brookfield Properties (Office), ProLogis (Industrial) (this is a good list http://en.wikipedia.org/wiki/List_of_public_REITs_...). In Europe there are a bunch of good REITs like Unibail-Rodamco (continent) and Land Securities (UK). In terms of REPE - Blackstone Real Estate is tops. PERE puts a list of the top 30 firms http://www.perenews.com/resources/PERE%2030/PERE_3.... Some of the firms at the top are struggling like Whitehall and MSREF, but others are doing really well.
In terms of best compensated, again it is Blackstone, although Colony, AREA, Carlyle, Starwood, Beacon and Lone Star pay really well too. What is also starting to happen is that some of the big PE firms are starting to build an RE presence and I have heard rumours of pretty good comp packages. To give you an example, TPG wants to buy ING REIM and KKR was in that process as well. Apollo just bought Citi Property Investors.
3. I've never done this, but I'd go about it in the following way: Find an opportunity (the hard part). Model out the cash flows and get a good chunk of the DD in order. Make an appointment with the person who does commercial mortgages that are in the range you are looking for. VT 4ever might have more experience in this.
Wow, thanks for the quick
Wow, thanks for the quick response. This is way more info than I ever thought I was going to get. repped.
I am looking to getting a summer position in some type of RE/RE Finance organization. Currently, I'm an undergrad finishing up my 3rd year in May. Do you have any suggestions as to what the best way to enter the Industry would be? Ive done some casual research on the firms that you mentioned above and it would be awesome if I could work at one of them, only problem is that I dont have prior experience.
Also, whats standard entry level compensation for these types of firms?
Finally, I know WSO asks this question way way way too much, but what type of exit ops exist after ones started out in RE? My goal wouldnt be to get in and get out as quickly as possible, it would be more of an 'in case things didnt work out' type of assessment.
Again thanks a lot for your help, its been really useful.
steve001 wrote: Wow, thanks
Wow, thanks for the quick response. This is way more info than I ever thought I was going to get. repped.
I am looking to getting a summer position in some type of RE/RE Finance organization. Currently, I'm an undergrad finishing up my 3rd year in May. Do you have any suggestions as to what the best way to enter the Industry would be? Ive done some casual research on the firms that you mentioned above and it would be awesome if I could work at one of them, only problem is that I dont have prior experience.
Also, whats standard entry level compensation for these types of firms?
When you say RE/RE Finance organizations, do you mean the REPE firms or REITs or brokerages? I'd go about the job search in the slightly differently for each.
Finally, I know WSO asks this question way way way too much, but what type of exit ops exist after ones started out in RE? My goal wouldnt be to get in and get out as quickly as possible, it would be more of an 'in case things didnt work out' type of assessment.
It depends on where you start in RE. I hate the term pigeon-holed, but generally if you start in RE it is because you want to do RE in the future and your exit ops will be RE related. With that said, RE is pretty diverse and you could theoretically start in a development company and then move onto a REIT and do asset management before ending up working for a pension fund in their RE investment arm.
^+1 to that. starting in RE
^+1 to that. starting in RE is not ideal if you want to do anything other than something RE related over the long term. That said, real estate is a huge and expansive industry. You can work at REITS, REPE firms, REIB doing advisory, Developers, Brokerage Houses (sometimes pseudo-REIB), Equity Research Coverage of RE-industry, Asset management, etc...
Question: RE_banker, do you
Question: RE_banker, do you know much about Carlyle REPE in D.C.? Anything about pay/culture/hours would be very helpful
International Pymp
Question: RE_banker, do you know much about Carlyle REPE in D.C.? Anything about pay/culture/hours would be very helpful
Unfortunately I don't know too much about the DC team, but I have had dealings with the London and Paris teams. I got on pretty well with one of the associates who told me that hours are not bad (and I was never able to get a hold of him after 9pm). Pay for a fresh associate would be around 60K GBP but I'm not sure about the bonus. I suspect that they don't get as much as the PE team, but that is speculation on my part.
To tie it into my earlier post about unclear exit opps - a quick look on the Carlyle RE team in the US shows that a lot of the junior folk didn't do i-banking - they came from real estate companies (CarrAmerica, Marriot) and other RE investment and consulting/brokerage firms (JLL).
double.
double.
Yeah, I've taken a peak
Yeah, I've taken a peak through their associates/analysts... A few impressive resumes, but also some pretty soft ones (random colleges, etc.)
thanks.
Thanks for all the info, its
Thanks for all the info, its been extremely helpful!
I have sort of an odd ball question, hopefully you can help out. I'm currently working in a structrued finance group that focuses on CMBS and CDO structuring/issuing (not the best place to be, but slowly starting to come back). However, I'm interested in eventually trading CMBS. So I was wondering if that is a logical career switch, to go from structuring or RE IB, or RE PE to trading real estate related assets? Or is trading a completely different beast? Thanks!
Dman33 wrote: Thanks for all
Thanks for all the info, its been extremely helpful!
I have sort of an odd ball question, hopefully you can help out. I'm currently working in a structrued finance group that focuses on CMBS and CDO structuring/issuing (not the best place to be, but slowly starting to come back). However, I'm interested in eventually trading CMBS. So I was wondering if that is a logical career switch, to go from structuring or RE IB, or RE PE to trading real estate related assets? Or is trading a completely different beast? Thanks!
I must admit I don't know a ton about CMBS trading. I've only been on one deal where our client was trying to buy back CMBS,. It sounds logical, but I should say the liquidity of CMBS is pretty questionable right now, so I don't think there are too many jobs on CMBS desks. Maybe someone from FICC division can chime in. Quickly googled CMBS analyst and found this. It's not exactly trading, but it's a step in that direction - and shows that your structuring experience is useful in that type of roll: http://www.fins.com/Finance/Jobs/53516/Real-Estate...
Wow, thanks a ton for the
Wow, thanks a ton for the quick response!
This thread is really
This thread is really helpful. Can anyone elaborate on the distinctions between what REPE and real estate Hedge Funds do and what it is like to enter and work in both?
Also, what are some sites I might be able to find news or read up on distressed real estate?
Real estate hedge funds
Real estate hedge funds invest in instruments with real estate-linked returns. For example, listed RE securities, unlisted funds, index derivatives, REPE club deals and mezzanine debt funds. Generally, they don't physically own the bricks-and-mortar.
REPE is simply PE for real estate. The fund owns the bricks-and-mortar. The typical strategy is to find properties with asset management potential and manage them out to get the valuation uplift, or to develop properties and hold. It's a more aggressive strategy than what REITS usually undertake.
PERE News is a great source of information on the latter.
I work for a RE hedge fund and I enjoy every moment of it. Real estate is not particularly cerebral so I like the contrast between the two disciplines.
aussie82: Thanks, that
aussie82: Thanks, that cleared things up for me
Hey All, Are you guys
RE_Banker, Have you seen any
superlyduper wrote: This
Takeover wrote: RE_Banker,
steve001 wrote: Also, what
Are there any schools that
What are some good REPE and
To answer a few
TeachmehowtoBucky wrote: Are
JBelfort wrote: What are some
Okay guys, I've finally
^I think townsend is in
@dagwood: interesting
International Pymp
it definitely could be...
aussie82 wrote: Real estate
Hoover1 wrote: aussie82
Thanks for starting this
WSO definitely needs an RE
Learn Financial Modeling
Interview Guides
Resumes
SAC wrote: WSO definitely
Dr Barnaby Fulton wrote: Long
Second that
dagwood wrote: If you're not
dagwood wrote: SAC
Dr Barnaby Fulton
Dr Barnaby Fulton
SAC wrote: WSO definitely
Great performance by Baldwin.
Any thoughts on LSE MSc Real
LSE program is pretty solid
Thanks RE Banker, this is
Dr Barnaby Fulton
I'll say I think that the
What a fantastic thread. What
tprb52 wrote: What a