Anyone expecting to be let go soon? I think I'm on the chopping block
No transaction activity. No fees. Nothing to do. They've pretty much implied next month I will gone and projecting 60% of my team will be let go.
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What type of firm are you at? I’m at a debt fund with minimal office exposure and not forecasting any layoffs but could be wrong
Non-Bank private lender
Surprised to hear of layoffs in debt fund world. CMBS makes sense, but private lending is surprising.
Not sure why I got MS’d. Sorry to hear about your situation, but if you’re in lending, you’re not in as bad of a spot as you think. I get emails regularly from recruiters looking for lending associates-VPs. Things have definitely gotten worse with treasuries in the 5s, but we will see
What have they said that you know you're being let go? Know a lot of interns not being hired full time, but others are hiring so things are picking up.
Same case, no work to do even for full time employees. Them on their phones during the middle of the day or taking a long time to answer emails.
It’s slow right now for sure. I think many firms without a base of fee income have had or will have layoffs. It’s an unfortunate part of this industry - incredibly volatile. I don’t think many people realize this when they take certain jobs that the type of firm they are at severely affects job security. If you’re at a developer, for example, once development dries up - jobs go by the wayside as firm income goes away.
Which RE areas and types of firms/companues are the least volatile to the most volatile given OPs question?
Least volatile think LifeCo, asset management, core strategies, family office. Middle is more like well established REPE funds. Most volatile think middle market developers that have hit-or-miss capital sources, local operators, etc..
This isn't a take all list. I know several local developers or operators that run so lean and don't get over their skis when the market is euphoric that their VP/Directors in their early 30's have no fear of being canned right now. They didn't buy a bunch of terrible deals at the peak and now they're just sitting waiting to snipe some good deals. They aren't going to can their VP/Director just b/c they haven't done a deal for a year because then when the deals start coming they will have no one to execute.
What's the head count to AUM ratio that you're seeing for these lean, well positioned firms?
Also know family office's that run very lean and similarly "snipe" deals. Unfortunately they don't even make good bets when that happens and I didn't love having no control/visibility into day to day. There were executives there for 15-20 years that were established C-suite but had no power or say on anything, takes a certain type of person to work in a family office environment. They're at the table so to say on major decisions like hiring and company future and the executives can say hey we need to hire 2 people here to ramp up, but it's up to 1-2 people who really have no insight into the day to day needs creating a disorganized environment.
All ready there buddy. Hope you can avoid it, straight up not having a good time right now.
I’m at a bank and think we will get hit. Now that we are so slow, you can clearly tell there are too many senior people who don’t really do much. I’m 50/50 on if I’ll be moved to another group or not. (2nd year analyst)
Anyone at a CB, CW, JLL, Eastdil, Nmrk hearing anything about layoffs or already seeing it?
Don’t work at any of the shops mentioned, but read an article the other day, stating CBRE is making $150 million in cuts. I assume layoffs will be a majority of the cost saving cuts. CW is apparently looking at selling pieces of the company, not sure what lines but worth noting.
CBRE already did $700mm in layoffs earlier this year. Do you have any idea which roles will be let go of next?
Cuts are taking place at all of the above. One of the aforementioned very recently laid off 10-15%.
Saw an article Monday that said CBRE's revenues are down ~50%? They're not going to broadcast it but yes there will certainly be layoffs at those firms. I don't think this is getting better anytime next year. The mantra I keep is hearing is survive till '25.
Will there be layoffs? 100%.
One thing I wuld note is that, a lot of people in the finance part of our business fail to realize how big these firms are and the breadth of what they do. CBRE has entire groups that focus on things like renovating all of the Taco Bells in South Carolina or huge appraisal groups or stadium planning advisory groups or property management groups. These firms touch so many elements of the built-environment that the layoffs may not come out of the capital markets groups. I think there will be a bloodletting of the excess fat on the transactions side of the house, but I'd hazard a guess that these firms are likely to cut some other areas more heavily before it hits the capital markets groups. That's my prediction, but Bob Sulentic makes the big bucks for a reason.
This is correct - I think the majority of the revenue of the big shops like CBRE come from outsourced real estate for corporate accounts which in some ways in completely unrelated (in a direct sense) to broader capital markets.
Layoffs are CLEARLY accelerating. Anyone who doesn't think recession is on the horizon is willfully blind. Company's hoarded workers in 2023 and now they realize 2024 is going to probably be even worse - as a result, they're cutting before the new year due to new budgets.
I hope you make it through (myself as well).
Real estate is 10x worse than the rest of the economy right now. Read the wsj economy section. People in the broader economy are getting raises, unemployment is near all time lows, consumers won’t stop spending… so the fed is keeping rates high. It’s killing our industry in particular, but everyone else is doing just dandy.
Agreed, but think of the impacts of substantially less RE activity vs. the last few years - much less construction projects = less work for contractors, less demand for building materials, so on and so forth. in 2023, there was still a good amount (?) of in process projects being wrapped up but now hardly anyone is cracking ground on new developments.
Point being, this will have major downstream implications and the dominos will continue to fall. Tech was first, then RE/finance, and now you're starting to see layoffs really spread into various industries - see: Panera layoffs, Staples layoffs, Union Pacific layoffs, all of the Insurance layoffs (Geico, Liberty Mutual, Farmers, etc.), Delta, Lumen Technologies, ViaSat etc. etc. (most of these were within the last few days).
Think of all the over-levered PE-backed companies (yes HC with your 7x Leverage @ close w a 15x+ PPM) -- DL/priv credit is going to take a hit and some of the equity will get completely wiped.
Remember when Office was the only problem child in CRE? Plenty of Multifamily and Industrial properties are going to get raped as well. I see a handful of newly built distribution warehouses just sitting EMPTY (and not just Amazon's).
When the layoffs accelerate, that is when residential housing finally starts to crack.
Am I too doom and gloom? Only way I think my thesis is wrong is if we suddenly drop to near 2% inflation and the fed can cut 200-250bps+ - just really struggling thinking they can pull it off, but its possible. Once the layoffs get rolling, it's impossible to stop it on a dime.
Get over it. Low rates juiced your business and crushed natural resources for the last 10 years. Now it's your turn to take some pain. That's life
Not sure if you meant to reply to me, but I wasn’t complaining - just stating facts.
People in real estate need to understand that pain in our sector is going to be around for a while, because there’s not nearly as much pain in other sectors. No one is lowering rates to save landlords.
Sounds like a RE guy banged your girl or something haha
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