Acquisitions vs Investment Sales?
I’m currently in asset management and am interested in making the switch to acquisitions or IS.
Curious as to what the pros and cons of each are and how they differ in terms of day to day, compensation, personality type, etc.
Also, any advice on how to leverage my current role to make the switch would be greatly appreciated.
Thanks!
Can you see yourself as a broker one day? If that’s a hard no, then just go into acquisitions. Investment sales is a great excellent place to learn, but if you know the client serving broker lifestyle isn’t for you, then you’re not missing a lot by going to acquisitions. If you’re unsure about either, then there’s nothing wrong with trying IS and then jumping to acq. One factor to keep in mind about IS though, is whether you want to join a more institutional team as in a support/production role or to join a team where you’re essentially a broker trying to win small deals and cold calling.
^This answer pretty much nails it. The only commentary I would add is the repuation and deal flow that both options present. If you are going to work for a small acq shop that only does a handful of deals, you are probably better off going to a larger instutional brokerage team that does a ton of deals and then jumping to a better acq. shop.
Thanks! This is super helpful. Can you speak to the pay structures, particularly how it changes from seniority level? I realize IS is purely commission-based but is this also the case for juniors? How is acquisitions compensated and at what point can I expect to get carry?
I can’t speak to acquisitions as much, but can provide my personal experience from an institutional multifamily IS team. The setup in this scenario is a couple brokers (1-2) and a couple junior brokers (1-3). The brokers probably make $2M - $8M a year depending on deal flow. I’m not as confident in a Junior broker estimate but I’d comfortably say $350k+ on a good team. If they’re closing their own deals then I’m sure they’re around a million or more. Experienced analysts - senior associate focusing solely on production can expect $120k - $250k. Clearly you can see the numbers vary a fair amount. Comp is highly dependent on deal flow, team size, market, and how commissions are distributed.
As said above, I wouldn’t entertain any brokerage jobs unless being a broker is what you envision long term.
You are already on the buy side being in AM. Most people start in IS then want to move to Acquisitions/AM. To now go to IS unless you really want it for whatever reason, makes no sense. You’ll just be spinning your wheels if you don’t like it and then want to go back to the buy side.
I thought AM is a back office type of role ?
If you’re tied to a desk running Yardi reports, then sure.
No, super important in the real estate world. Way more important than the acquisitions team, usually, though not as high profile.
Also depends on the shop. Some places, asset managers are the ones running a refi process in addition to the day to day. Get your hands dirty in a lot of different areas.
Thanks! I was interested in IS given the greater earning potential. How is acquisitions generally compensated?
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