Am I an idiot?
I know I am, generally speaking, but I need to know in the context of this situation...
Coming out of the military and just started Y1 at a T15 MBA. Did a bunch of "self reflection" during the application process to try and figure out what I wanted to do career-wise. Talked to a bunch of different people in different industries/job functions and ultimately, landed on Development. RED just seems to have a lot of the qualities that I loved about my job in the Army. I worked with a small team of high-functioning idiots every day and we were just figuring it out on the fly. We'd develop a solid mission plan, pitch it to the commander, deploy, and then react accordingly when said plan fell apart (which I came to learn was inevitable). We all wore multiple hats and we had to adapt and flex on the fly. Most of the time I had no idea what I'd be doing that day when I showed up to work, a lot of days it was something I had no expertise/training in, but the team was relying on each other to figure it out; I liked it that way. I enjoyed the problem solving, people skills, and creativity required to see a plan through from start to finish...This is why RED stuck out to me, based on my conversations, it has a lot of similar aspects.
So, coming into orientation a few long weeks ago, I felt pretty solid about what I wanted to do. Fast forward to now, I'm getting a lot of weird looks when I tell my classmates I'm trying to recruit primarily for RED. I promise I'm not a pussy but this whole corporate world is unchartered territory for me and I've started to second guess myself ie act like a pussy...should I follow my classmates advice and recruit for IB or consulting this fall to hedge my bets? I know CRE/RED isn't necessarily tits up but its slowing down a lot. Given the current conditions, is it going to severely effect my chances of landing an internship this summer? (Looking at you Hines, Greystar, Trammell Crow) I'm planning to reach out to some contacts I've made to get a pulse check again but I figured in the mean time, I'd try and quell some of this built up anxiety by getting y'alls thoughts. Any advice would be greatly appreciated as I've gotta make a decision here soon.
Recruit for everything you possibly can. However if you like real estate development, you'd be an idiot to not apply for it. Who cares what your classmates think? All the best. Thank you for your service.
You are without a doubt not an idiot (in this case at least.) Your rationale for wanting to get into development and why you think you'd be good at it is already better than most that I see. I'd interview you for sure. Your classmates jerking off to IB and consulting roles is just standard business school nonsense. They want those roles because the internet tells them they want those roles. Yes, they will probably make more money than you on the outset, but you'll also be doing things beyond changing cells in Excel and slides in Powerpoint for 80 hours a week. You'll be using your brain, be given opportunities to shine, and still be able to work out in the morning, be home for dinner, and generally have a life.
The only hesitancy for real estate right now is market uncertainty, which could get in your way, but it also gives you something to talk about in coffee meetings/interviews/etc.
I don’t disagree with you, but just find it funny how people in RE (particularly development) find ways to rationalize the lower pay they make.
I hear you, but the hours difference is real and you don't have to pay NYC rent. It makes sense to me that a newbie banking analyst in Manhattan would be paid more than a newbie development analyst in Nashville. I wouldn't make the trade, personally. I like my life.
As someone in RE, the low pay compared to counterparts in other industries is real. It's not bad pay, though. But I agree it seems to be over rationalized but people in the industry. The reality is that unless you're working on mega projects, there just isn't enough money going to our firms to pay us like finance counterparts. But the money is still pretty good with ways to make nice sums on the upside while work/life balance is generally better. Having said that, I do have friends that went into banking and now that we are in our early 30s they are being recruited for executive positions on the corporate side that will get them to 7 figures a decade faster than me and their work life balance being generally similar once they get to those positions.
The people I work for make way more than any MD in IB or consulting partner. Sure, you may take a pay cut to start, but once you start getting incentive bonuses, you will make just as much as your counterparts and have a better work life balance.
Sounds like a win to me.
I went to a target school and was seen as a retard for being interested in CRE vs IB/Consulting etc. Back then the real estate club was a side show. Fast forward 10 years it has become one of the most popular and successful clubs on campus and its now a major which didn't exist back then. People are catching on. As a developer, I can tell you one thing with certainty - if you're afraid of what anyone else thinks and are not comfortable trailblazing into the unknown, then development is not for you. It doesn't sound like the case, in fact, it sounds like you figured out quite quickly and efficiently what you want to do, so don't listen to your idiot classmates that lack creativity and are only comfortable following the herd.
If you know you are genuinely interested in staying in RE for the long run, I would say go for it.
The issue with it is once you choose that route, it's really hard to pivot to something else. But those that do it and enjoy it are some of the happiest career guys out there.
I think it's actually probably a good time to be an intern. Hopefully you have a couple years to work your way into some promote sharing before the next bull run. I'm guessing most of those firms are still keeping the intern pipeline steady as it's not very cost heavy and needed for talent pipeline if things pick up, but I could be wrong.
What markets are you looking to?
One other thing I'll note which probably plays into the minds of MBA grads that may be getting a late career start with a lot of debt to pay off - Generally speaking, CRE is a long game in terms of compensation. Sure there are several shops that will compete on comp with finance/tech from day 1, but reality is that you will most likely make more money over the next 3 - 5 years if you pursue finance/tech roles. Now that shouldn't the end-all decision maker, but I think it's important to accept that risk before you pursue it. CRE still has lots of comp potential, but it really comes more in the form of promote that takes a while to pay out and it's sometimes harder to compete on cash comp with your counter parts in other industries.
Nah bro you are not an idiot, you just don’t want to be a corporate dork and work at Deloitte or something…which makes sense and is why I like development as well. Most people in MBA programs at top schools know nothing other than the herd mentality of grind in high school >>> go to best college >>> work in IB/consulting/whatever >>> do MBA >>> now what? It’s the group of people who are least risk averse and just want to check boxes. You will find a lot of hive mind mentality at MBA programs. I know a guy who did an MBA at an Ivy and recall him and I talking about how when he was in school literally everyone wanted to do investment banking. He worked at a top RE firm and now runs his own shop and will probably be worth 9 figures before age 50. Had he taken the safe path maybe he’d be an MD at a bank or something by now.
I would reccomend recruiting for IB internships at the same time. Take the CRE one if it's what you want to do and it's a good shop, but hopefully have some IB internships as backup if the market is tough. The modeling and PP skills you learn in banking are still highly applicable to entry level CRE work.
I used to scoff at why some of the top RE shops hire mostly IB analysts for their associate roles, but now that I'm older I realize it's b/c the mindset they learn as an IB analyst/associate makes for someone really reliable in RE even if they have to pick up the learning. An IB analyst/associate has it pounded into them to make sure all of their work is tight and they are working long hours to figure it out which is really helpful to have as an associate on a lean CRE team where your seniors don't have time to be checking over your work a lot. This same mindset is usually taught at the top CRE players you mentioned as well, but I think it's something that's lacking from people that start their career in smaller/more entrepreneurial shops
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As someone who broke into development from an MBA career switch (though I did construction before, not military), I'd highly recommend you don't also recruit IB. It's a huge time suck to do serious recruiting in business school and trying to do two will just drain your entire year (IB at the beginning since it's high structured, real estate at the second half of the year since staffing is often determined more last minute). Since there just aren't the same kind of institutions in real estate as banking that scoop up dozens of interns you will need to widen the net. Definitely aim for the Tishmans and Hines' of the world, it's great to get a name brand on the resume and you can probably learn a lot, but you also need to know that they aren't the end-all-be-all of real estate development. It's such a localized and fragmented industry, you could be with a 50 person company and make as good money as the big guys and have more responsibility.
As for recruiting, you need to speak to a lot of people since there is a good chance you won't land a spot at the top 6-7 national firms. You will need to do a lot of networking with all sorts of local players in the city you want to work in. And for banking it's similar but for depth rather than breadth. If you want to be a serious candidate for IB you need to go to every happy hour, every corporate networking session, have plenty of phone calls with the team, follow ups, etc., so people will go to bat for you when selection time comes. You can focus your attention on a smaller number of firms, but you need to go deeper, and it all takes time. Ending up at a 2nd or 3rd rate IB shop is far worse for your career than ending up at a 2nd or 3rd tier development shop, in my opinion.
I personally think that joining a smaller group post-MBA without any pre-MBA RE experience is a huge gamble. Some of these turn out to be great (your bosses are generous, you get some promote that pays out big, lots of room to grow with the company) but I'd say just as many turn into you getting paid under-market while a mediocre shop milks you and doesn't give you the best training. And I think it's really difficult to suss that out as someone that is coming into the industry new and without lots of connections.
The most success stories I've heard at smaller shops usually come from someone that first worked for one of the top players and then left to go join a small shop at their inflection point of growth and one where they already had a relationship with the principals. Think spending 3-5 years at a Hines or Top 50 REPE team, making it to senior associate level, building relationships with lots of people outside of your shop, and ending up going to join them as a VP running a region.
I wouldn't normally reccomend recruiting for IB as an MBA without pre-MBA experience for someone going into RE, but that advice was different here given the RE market has slowed down and I wouldn't want to risk having to take a low quality RE internship. I don't have my MBA - so where I might be off is if the IB recruiting already finished before RE starts, meaning you'd have to renege on an IB offer to go recruit for CRE.
Very well said
Do what makes you happy man. Congrats on getting out, prior infantry myself. Finance is tits, kinda miss it tho. Anyways, everything is a balance as far as comp and time off go. It’s not 1980 Patrick Bateman Wall St anymore. I know more and more people who break into PE, private credit, VC, etc without the IB background (I.e came from trading, WM, commercial banking, research, RED). I don’t think it matters anymore. Go with whoever pays the most for the most time off. Lots of guys grind out years in IB and end up at a good exit opportunity only to look over and see some guy from a more enjoyable field land the same exact job. What about a RE team at a bank? Comp and stability of a bank but work on RE deals.
Honestly, the CRE market is pretty shitty right now and I wouldn't be surprised if it affected your chances of landing an internship. Maybe not at the biggest shops, but it's hard to tell.
I would take a while to think what you want to get out of your job before you commit 100% to development. If you are fine with playing the long game in terms of compensation, have the patience to wait out a 2-5 year entitlement process then it might be for you. However - guessing you are a little older since you did military then b-school - you will have to be okay with seeing your younger peers who go into IB, then PE or hedge funds, outpace you in terms of comp for at least 5 (maybe 10) years. I went the GP development path, and while I really enjoy the work, it's almost impossible not to compare yourself to peers and get frustrated with CRE comp sometimes. Additionally, if you are trying to start a family anytime and don't come from an upper middle class background, it may be tougher with development comp in the near-term.
If you like CRE but may be interested in a different comp structure, you might consider the REGL (real estate gaming & lodging) group at an investment bank, probably an associate role. You could do a few years, gain a ton of knowledge and then have the option to head to REPE, a CRE debt fund, hedge fund....or a developer if you still have the itch. Gives you more optionality.
I have a similar background, but took a different path getting into RED. I was an intelligence analyst, got my degree after the military from a state school, did not do any internships, then ended up going into the oilfield briefly due to family issues (my family lives in a very remote area so not a lot of options). After a year and a half got the thumbs up to leave the area, so took a financial analyst ~ AM position for a family owned multi-family firm.
Pivoted from there to acquisitions for a REPE. Unfortunately our JV had ROFO and was running the clock out on all of our deals, and we were basically pencils down since November. I ended up getting laid off then recently was picked up by a Residential Builder for land acquisitions.
I definitely prefer acquisitions and development versus AM and finance. With your background you could realistically do either. The SFR/BTR side of things is dead right now, but a lot of the major homebuilders, and multifamily companies are still hiring. I believe my company just hired a fresh grad for an analyst position who interned at starlight.
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