Opposite of the other thread that was active in 2018 “worst places to start...”, yet this time - what are the best places to start in CRE right out of college? Especially in today’s environment.
The other thread seemed to be against: leasing, property mgmt, and valuations/appraisals as the first job out of college if you want to make it to the big leagues. Curious for everyone’s thoughts.
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Acquisitions/Asset Management. Capital Markets, and Brokerage for a jll, CBRE, C&W.
Yeah, I would skip leasing and property management. You will never be able to move to a different area of real estate. And, your skills will be limited.
Valuations/appraisals is hated on unfairly in my opinion. You learn about real estate from the ground up and are able to make contacts with brokers, buyers, sellers, etc. When using your network correctly, a valuation analyst can make the jump to REPE/capital markets if they wanted. I have seen it happen and I made a similar transition myself back when I was in valuations.
But yeah, agree with C.R.E. Shervin on the top roles to target out of UG
IB Real Estate Group at an bank with good RE deal flow then pivot to literally anything in the CRE space.
CoStar
Alright, what I am about to say is probably "WSO Contrarian" but that has never stopped me before....
I think the best place to start in CRE is at the job you get!
I know that is not a satisfying answer, so let me explain.
This industry rewards results, and doesn't really fixate on pedigrees/names the way the fin bros in the IB/PE/HF forums have to contend with. Thus, getting a "big name" job is now or later isn't really the major determinate of career success some think it is. It is what you can do, provide, etc.
You need to learn a lot coming out of college to be useful/productive, this will take YEARS. So the best job is the one that trains and develops you the best. In all reality, you probably suck the first year or two, so might as well just get it out of the way.
The CRE industry is very open to networking and thus job movement. If first job not optimal, moving along in a few years or so is easy.
You probably don't know what you really want to do or will be best at coming out of college. It's easy to get fixated with acquisitions or investment banking, but really, until you are in the real world, you are guessing (and probably basing on the opinions of others).
Earnings in real estate (all CRE roles) is far harder to figure out and less linear than in corporate or finance type roles. Some "small time" shop could out pay large/well known shops (not likely on day one, but by year 5, anything possible). Bonuses are more a factor of deals, portfolio, projects, etc. or even tied to fees/commissions. So a top player at a regional "no name" could earn more than an average player at a "big name" firm in a given market (in fact, this happens all the time).
So, don't stress, if you make a mistake you can correct. I had no idea I would want to do what I am doing today when I graduated from UG, so I wouldn't even know how to go back advice my 'young' self if that was even possible. Just learn, work hard, and seek forward progress.... everything else will take care of itself.
I agree with redever. I’ll take his WSO Contrarian view one step further and say wherever you end up do the best you can, keep your reputation in tact, try to learn from each experience. Mastery of your career comes from piecing together life’s randomness into a symphony. The big hope is your past, helps your present, which helps your future, but a future that is uniquely you based on your strengths and interests and goals/dreams. One cool thing about real estate is it can outlive is, come back to us, be envisioned and created, and so forth. Recognize that and find a way to make your unique place in the trade.
Break it up in two buckets:
(1) Principal Side (Development, Acquisitions, pure-play REPE) - Here you have the most upside (equity) - Here you will work the most hours - Most people see this as the end-game/goal
(2) Getting to the Principal Side - Real Estate Investment Banking (offers most flexibility and more direct route to (1)) - Lending (Bank, Debt Funds, LifeCos) - Investment Sales / Mortgage Brokers (Eastdil, CBRE, etc.)
There are a lot other roles that fall into (2), for example, appraisal roles, leasing, etc., but the road to (1) from such is much harder.
Really anything listed in (2) is a great place to start if you're not lucky enough to find (1) right out of school. Finding (1) out of school is very hard because there are very limited opportunities and outside of very large firms everyone else wants somebody with experience in (2).
Principal side:
Best place to start would be a shop that has an analyst pool like Crow Holdings. Their analyst work on modeling everything from multifamily to convenience stores and split their time between acquisitions and asset management. Doing both acquisitions and asset management that early in your career in my opinion would give you a leg up on the competition. It also allows you to figure out if you enjoy one or the other more.
Brokerage side: Somewhere like the old HFF where you work in an analyst pool as well. The old HFF would have their analyst work on all asset classes. After 2 years you are able to model any and every asset class.
In a nut shell- Best places to start would be a shop with a good track record that lets you wear a ton of hats. After a couple years you have good experience and you are able to drill down on what you actually enjoy.
I think this is especially important, not just when starting out your career, but in general when you are breaking into a new industry and don't have much prior experience. I've been able to do something like this and it's helped a lot, it would have been difficult otherwise to figure out what I like (and dislike) more.
Investing in commercial real estate is not as difficult as it may appear. With more and more listings coming on the market, there will be much more competition starting in early 2020. You deserve a better way to invest is real estate and a better place would be Houston. Enriched Real Estate, property shark and co-star can help you find properties.
Thanks, Mike.
BB finance teams/CMBS or brokerage. Or investing side for an actual analyst class... which is rare. Ppl love being on the equity side, but there are less opportunities out of college and many that exist have very little learning experiences/on the job trainings... while a CRE finance team has more of an analyst group (similar IB sell side role/training to PE if that makes sense vs PE out of the gate). I’m partial to bank finance/CMBS team but would agree that top broker groups are also solid starts. Massive deal exposure, all asset classes, locations, potentially debt and equity exposure/stretched capital stack, and most likely an actual analyst program (Argus training, seminars, more junior peers... associates/vps to lean on, etc). One would learn a ton and could effectively move to any group debt/equity/dev from here, after some experience. Also obviously getting strong brand name, networking opps, etc