All my folks in the office space market….thoughts??
2nd year analyst; currently interviewing for an Asset Management Associate role for a RE PE firm in the DC area.
The firm is primarily value add and looking to buy distressed office assets in the near future. I have some reservations in light of what’s been going on with the office market.
If you work in office investments or are in asset management, what is your 5 year outlook on starting a career there? How are things going for your firm? Is there an opportunity for a good career?
Based on the most helpful WSO content, here are some insights regarding a career in office space asset management:
5-Year Outlook on Starting a Career in Office Investments:
Market Conditions:
Career Path and Opportunities:
Firm Performance and Industry Trends:
Current Industry Sentiment:
Asset Management Importance:
Career Longevity and Growth:
Conclusion:
If you have more specific questions or need further details, feel free to ask!
Sources: Asset Management as a long-term career?, Why Work in Asset Management?, Fork in the road: Career path in Asset Management, Real Estate Job Market - What's the Temp?, How to start an International RE family office
For a more junior asset management role, it could be an excellent opportunity. However my answer/opinion would be very different if it were an acquisitions role.
Being involved in the AM of assets in a tough sector/value-add capacity would bring a lot more learning opportunities and interesting situations (tougher refi negotiations, creative leasing strategy, asset repositioning, etc etc) when compared to easier market conditions. Relatedly, this is why AM is especially important during tough times.
Would I want to stay in office forever, no. But you’ll probably learn more and quicker.
Thank you FMY96, I do agree there’s much more to be learned navigating the challenges in the office sector. Acquisitions folks are definitely going through a rough time right now.
would they be looking at buying deals in solely DC?
We own both- AM seems really boring for resi. Completely different for commercial. Granted we own nice, large deals. IMO I’d rather be a junior on commercial side of AM for learning purposes. Acquisitions and actually being the owner might be a different story lol.
Thanks credev99, yes their primary market is DC. With how oversupplied the DC office market is it makes me question the longevity of my career with the firm in terms of progression (title, comp, etc). Though AM is easier when the buildings are already stabilized, these are gonna be very hairy and risky deals…not sure if I can stomach that….
Personally as a junior- I’d welcome risk and hairy deals and I like the idea of going into the asset class everyone is running from (with the caveat that I’m working for smart people who know what they’re doing).
Sounds like a good learning opportunity IMO. But everyone is different and it makes sense to not want to set yourself up for failure. Ultimately I’d go with your gut.
I am in office investments and do quite a bit of asset management, in addition to acquisitions / development. As FMY96 mentioned, if you want to learn a lot about refis, repositioning, workouts / deed-in-lieus, etc. then it's probably a good spot.
Personally, I can't wait to get out of office into another product type. It is quite unfulfilling to work in a vertical that has really questionable future demand, and where the end users want nothing more than to be anywhere else except your building.
I would figure out if they do value-add in other product types if I were you. At this point I would not want to be pigeonholed into office early in my career.
Thank you porkbellies. One of my primary concerns is exactly that; being pigeonholed into a sector such as office where future demand is bleak.
The firm I’m looking at is probably 80%+ office and maybe 20% data centers. I will see if there is opportunity to be had in data centers. Thanks!
The question to ask yourself is what asset class(es) do you eventually want to work on? Alternatively, do you want to be a generalist? If you eventually want to get into an operationally intensive asset class like hotels or multifamily, you’ll have a tough time switching to an operator from office. But if you’re looking to stay in the traditional commercial food groups - office, retail, industrial or self storage, you’ll be fine going to an office investor for a few years.
Given you’re in the DMV you cannot go wrong doing data centers, and I bet that becomes a traditional asset class in due time particularly in NoVA.
I would not be anywhere near Office unless it’s a firm buying it to tear it down or convert it (which rarely works)
It’s a dead property type
I work in office. When I leave my current role I will not be working in it again. While I’ve never totally enjoyed office - I always felt it was extra brain damage for no extra return - at this point in time why go to an office firm. Returns will be down for the foreseeable future. That means bonuses will be down. Why take less pay?
With the above said - as a first job it’s a totally fine learning opportunity. Take it for a few years. If you like it - great. If not you can move on.
It’s hard to overstate how dead office is at the moment. I originated a junior mezz position a year ago on an office asset at 150M in a workout and the junior mezz lender is now completely wiped out.
The values plummeted - like collapsed and then plummeted some more - and then interest rates went up at the same time - and all of the offices had floating rate debt originated when interest rates were low…
Now tenant’s leases are expiring and no one is renewing.
It is a disaster.
Thanks for sharing carpinem…. It’s good to hear war stories and the reality of the office market…its an eye opener when considering a career there
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