Capital Markets I/S vs D/E
Hi,
I'm currently interviewing for the Capital Markets Internship at a RE firm (think JLL, Eastdil, CBRE) and one of the questions they asked is would you rather be on debt & equity team or investment sales team and why? I'm hoping to gain a better understanding of what each team does and the pro's/con's of each side. To my understanding, you get more exposure and reps on the D/E side but I/S might be better if you want to get into REPE or a development company. My background is in real estate development and real estate valuation but I'm taking a few financial modeling courses and in process of getting Argus certified. Any advice is much appreciated!
if this is gonna be your main internship be careful because you might not get hired after your internship. market is very ass. but to answer, IS works to sell the deal so they’ll take in place info from a t12 and also mingle in some bs assumptions. there’s a lot more selling in IS so more fluffing numbers but you can have fun in creating a storyline. D/E you’re underwriting to the in place or stabilized assumptions and UW for a lender so you (especially rn) won’t fluff much up. yes debt you see more volume because it’s acquisitions, refis, construction stuff etc. fees smaller tho. not the case for all teams but most if you start on debt you’ll see all property types so you’ll get to use but excel models and argus. if you’re just sales then you might just be in excel for multi or argus for office, industrial, etc. painful market rn, just make the team like you and don’t come across like you know what you’re talking about but kinda know what you’re talking about if you know what i mean. seem cool, brokerage people are like white collared blue collared men mixed
thanks for the advice!
Just got ARGUS certified last week. If you have questions let me know.
appreciate it! so i did the 2 day training on a pc at my previous internship but i only have a mac right now. did you do it on a pc? how necessary is it to have pc i'm thinking of buying a pc laptop so i can learn shortcuts b/c i know all the firms use pcs for modeling.
also, how many hours did you put into studying? i've heard some people say you can do 20 and pass and others say 50
get a pc. it’s worth it. you won’t learn on a mac
I suggest using a PC for sure. I probably spent 40 hours on it. It’s very simple, go through the entire e-handbook (manual) idk what they call it from the first page to the back. Make sure you can accurately do the case studies in the manual and do all the practice problems. You only have to score 70% on both sections.
D/E would be my choice. You’ll get exposure to all sorts of debt while also getting the equity raise side. You’ll likely work on more complex transactions as well unless we’re talking like IS with Spies/Harmon where you can be working on One Vanderbilt or The Empire State Building some day.
That said, the market sucks ass today and it really comes down to which group has the better team. Both are great options all else equal.
As we always say, and I cannot emphasize this enough, it entirely depends on the caliber of the team. But if we assume they are equal caliber then D/E all day baby. That's where I started and where I recommend everyone starts. If you work on a strong team, you will learn many product types and markets, how to structure complex capital stacks, see everyone's models etc. Drinking from a firehouse is an understatement.
My recommendation is search the top brokers on each team, find the deals they've closed, and that should give you some clues as to what you find more interesting as well.
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