What do CRE analysts/CMBS analysts really do at fixed income shops?

I have seen many postings for CRE analyst/CMBS analyst at buy-side fixed income shops recently (including top buy-side like PIMCO. The language in the postings sounds like they are hiring people who can underwrite mortgages at the property level. For example: "Assist in asset-level credit underwriting of CMBS loans", "Assist with deal execution, including drafting and negotiating acquisition and joint venture term sheets, and reviewing deal documentation", or "Research, analyze, underwrite and evaluate commercial real estate investment opportunities".

Is it common that buy-side fixed income shops hiring people for asset-level underwriting for CMBS investment? I thought that CMBS analyst at places like PIMCO, Doubleline, or TWC tend to spend the majority of the time to research macro things such as prepayment trend, delinquency trend, business activities, etc. What about at places like Pine River or Lone Star? Do they underwrite at the property level or they solely focus on macro things?

 

PIMCO manages +$15b of property investments in the US & Europe. They launched their opportunistic real estate investment platform in 2007. They fly under the radar for their direct investments, however, they recently closed BRAVO II at $5.5b.

So I am going to go on a hunch, but I would assume that the opening was for an analyst position within a direct investment platform.

 

Do these guys participate in the investment process at all such as selecting which CMBS, which tranche, etc. and managing the portfolio such as duration management, yield curve/spread analysis, etc.? Or they pretty much just underwrite at the asset level and save the work in the database so that the real "bond guy" will determine which CMBS to buy?

 

hey I work on the CMBS trading desk of a buy-side shop.

How it works here is that we have the 2-3 guys on the desk (me, an analyst and the MD) and a Credit group that does the underlying CRE analysis when we're looking at new issue and secondary market positions. The Credit group also functions as Underwriters of direct loans, mezz, and construction additionally (which our firm also does).

My main role is to run bond-side analysis on the purchases and look for new trade ideas in the secondary market.

The analyst's main role is reporting and running monthly cash flows on level III accounting positions (which exist due to accounting rules I'd rather not go into) while they're learning the ropes.

Although I will say that when we have a time crunch, myself and the analyst will pick up some of the work from the Credit group and help underwrite loans in the pool we're looking to purchase tranches in. I started as an analyst here on the desk and learned a ton even after doing some CMBS investing in my first role. It helps to have a background in CRE for the positions - such as an internship or coursework directly related to commercial real estate finance. Also being good with technology is a huge plus and something we look for in new hires.

**** One more thing - if an analyst role like that sounds interesting we're currently hiring for one our desk. PM me for resume exchange if you feel you're interested and qualified. If you're not interested or qualified I can still hopefully help answer some questions you may have.

  • whip
 

If you're looking for more information on the day to day or a CMBS investor the RE subforum may not be the best place. Once CMBS gets packages and sold the fundamentals of what makes them a good investment are far from real estate. They are just another credit product.

There are very few hedgefunds that invest in CMBS. If they do its because most of the tranches are wiped out or its a b-piece they are buying. Most CMBS (by volume) buyers (as I'm sure you know since you work for an issuer) are insurers, banks, money managers etc.

But anyways the bond forums here will be much more help to you.

Good luck

 

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