I'm two years out of Undergrad and have two offers on the table. I have an analyst position offering with a well established REIT, I would do some acquisitions but more Asset Management. I also have an offer with a small 3 person REPE shop that is literally just starting up. Comp Reit 70k + little bonus, 60k +bonus repe. My end goal is to start my own REPE some day. Also I may have to get an MBA or Masters in RE depending on what happens in 2 years. Which would you take?
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$60K is pretty low in my opinion considering you have 2 years of experience. If the 3 members at the repe are serious about making money and are capable of growing quickly, then they would understand the importance of paying you market level (even if you're an analyst). Do you really want to be with a group of people who are stingy? Many people would disagree and say go with the experience, but to me salary is indicative of a firm's commitment and ability to grow. They compensate well because they understand the value of every member, even the dinky analyst who will do the number crunching. From my experience if the firm pays low at the analyst level, then they don't really know what they're doing.
With that being said, I would go with the REIT. You get some exposure to acquisitions and help manage the buildings, and will have the name to back it up should you pursue an MBA in the future. $70K is fair.
I don't consider $60k stingy if it is a start-up fund, depends on the size of the fund though, and the market. Also, the difference btwn $70k and $60k at this stage doesn't mean anything. I think you will learn a lot more at the start up, and is worth the risk at this stage. Also, If your goal is to start your own REPE someday you will not get any better experience than working for a start-up.
+1 Do you want to build your resume to jump into REPE or learn about a REPE start up? REITs tend to be a lot more defined (job role wise). Where as you wear a lot of hats at the small shops.
fez says nothing that I can disagree with, but if it were me, I'd think hard about the new office, as I just personally get a kick out of things like that. So many variables, though: - do the people seem more fun at one place than the other - what is the background of the founders of this new company (btw, the phrase "REPE" gets thrown around WAY too fucking much on here. REPE refers to an opportunity fund. Not "3 guys looking to put a couple deals together") - how big a deal is junior-level comp to you personally - if it fails are you fucked, do you have 100k in student loans and a 1200/mo apt in nyc? - what exactly would they have you doing there
etc etc. Just my 2 cents.
$1200/mo apt in NYC? Where is this apartment and can I sign the lease tomorrow?
It's at corner of East Murder Street and South Needle Avenue.
To add to prospie's comments (and similar to him, I'm usually for things like start ups and getting in on the ground floor), really look into the founders. How well funded are they, either personally or do they have a backer for the operational start up costs and the cost to raise a fund (which isn't cheap in itself)? Are they raising/have they raised a fund or what's their source of equity and how solid and discretionary is it? If they haven't raised a fund yet but are in the process, what's their timeline? Now add six months to that. If you're planning on bschool, will a no-name firm hurt your chances or do these guys have strong enough reputations that they could carry weight in admissions (for example, are they three brokers who are striking out on their own, no offense to brokers, or are they three senior MD's from Blackstone?)? Real estate doesn't necessarily require an MBA depending on the direction you want to take but that's probably a different discussion.
Have you talked about career progression with them? Assuming they haven't raised a fund yet, once that's closed or a couple of acquisitions have been made will your comp go up to market? If things go well can you expect above market bonuses because you're taking a risk? Do they see you as a 2 years and out analyst or as/if things start going well can you progress through the firm? I don't necessarily know if I'd want to join a start up fund if you're only expecting to stay 2 years because, even if they have a fund completely raised, you'll probably only see a few acquisitions, you won't really get to see a reposition of an asset and it's highly unlikely you'll see a disposition because you'll be there for too short a time.
Another thing to consider for both companies is what do they focus on? Property type? strategy? ect. and which one is more appealing to you? Also, with regard to the REPE firm...have they raised a fund? do they need to raise capital?
If the REIT position was in acquisitions it would be an easy decision however if acquisitions is what you want to do and you will get more exposure at the small REPE firm I would take that.
If a REPE firm is only willing to offer $60K, then every dollar matters to them. That is a fact. Therefore, it is safe to assume that they have little capital to work with, let alone a fund (everyone also seems to be raising for a fund). These guys are not in tune with the market because good shops know the true value of an analyst believe it or not. They pay them well because they will be busy and it's the only way to keep them happy. If they're serious about growing, how do you entice 20-something year olds to stay with you as you grow? Compensation. To piggy back on Prospie's comment, REPE gets thrown out there too much. If the firm seeks value-add investments, they are not a REPE firm.
Maybe I am naive however you don't consider a value add fund or even a core plus fund as REPE? Starwood purchases what I would consider to be core plus assets and they are generally considered REPE (I am not referring to their REIT).
Thanks for the advice. The reit, it gives me the ability to work with multiple asset classes and has billions in assets. Pros: Name recognition, Different Asset classes, Stable Cons: REIT, Corporate Structure
On the other hand if the REPE actually works out I'll basically be in a better position then when I come out of MBA school 4 years from now. I'll be looking for a position such as this when I get out. Pros: ground floor, good team atmosphere Cons: Fund being raised but have money to close high dollar deals, Comp
In my opinion whether or not you should consider the small REPE firm comes down to the reputation/experience of the founding partners. If its the former CEO of Vornado (or something on the same level) I would say take the job even if it is just you and him because the connections and exp will be great and even if it doesn't work out he would most likley help place you assuming you do a good job. If it is just some random guys getting together and it doesnt work out...you might have difficulty finding your next position because you cant name drop and say I worked for X's firm
I would take the well established REIT. Simple answer is that it is known. A new REPE firm could go bust. You can easily go from the REIT to repe. Reputation will open more doors. If you want an MBA or Master's, the well known spot will be better.
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