I originally wanted to go in to brokerage for the usual reasons (entrepreneurial, eat what you kill/meritocratic, high income potential, opportunity to us a skillset/access to network with capital/knowledge to eventually perform my own deals one day), but the more I've read on investment sales, the more I think I would like to pursue it. Having a skillset where you understand all the intricate details of a deal/valuation, where you might not pick up that much in a traditional broker role focusing on deal execution/calling, fits my personality + it sounds like a safety net to fall back on.
I am hoping you guys can add more color or correct me where I am wrong: It sounds like you join a team as an analyst on a base salary + some sort of bonus structure. Expect to spend 2-3 years performing financial modeling (argus), some level of calling, and misc. grunt work and then the opportunity to move up the chain as an IS broker OR it seems like IS analysts have more opportunities to move into development, acquisitions, REIT due to their years spent in the weeds and not just cold calling and trying to execute deals.
Also, I've searched Linked In, and there do not seem to be too many "investment sales" brokers. I've noticed there are some "capital markets analysts" for the big guys (CBRE/JLL). Would this be the same role?
capital markets generally means arranging the capital stack for your clients through debt & equity. These guys are also called structured finance, debt & equity brokers, etc.
Investment sales is selling properties. Some of the larger shops put both of these business lines under one umbrella called "Capital Markets".
You are right in that the bigger shops usually bring you in as an analyst and you grind numbers for 3-6 years (or more) before you actually become broker. At boutique shops and even sometimes at the larger shops, you can find associate level roles where they will start you out from day one on the phones and developing your own business/sometimes partnering with senior brokers on their deals. If you see yourself as the more analytical type and are more interested in that, look for the analyt roles. If you want to grind and hustle and pound the pavement from day one, look for the commission based associate roles
Thanks! This was helpful. Do you mind expanding a bit on what you mean by "arranging the capital stack for your clients through debt & equity"? I don't tie together how a brokerage shop would play into this as it seems like something a bank would do, unless they are advising on how much/what type of debt equity to take on for a certain project and coordinating that with the bank (or do brokerage shops have their own finance arm?)
Could you perhaps share an example of debt/equity broker helping a client achieve 'outcome x' if that would be easier?
example: developer is looking to buy a multifamily deal worth $100MM, and wants 75% LTV. The mortgage broker packages their deal and pitches it to financing sources (CMBS, local banks, debt funds, life insurance cos, etc) in order to get it financed either through a giant senior loan, or a combination of senior debt + mezzanine/pref equity. Then mortgage broker collects a commission for arranging the capital stack and getting them their loans. Industry standard is a 1% fee. This fee can go up or down depending on a number of factors. Google is your friend. google "debt and structure finance" these roles are usually just as (if not more difficulkt) to land than investment sales.
This makes much more sense. So the developer could technically go to traditional mortgage broker, or (it sounds like) CBRE/etc. have these "brokers" in house under their capital markets/debt and structured finance division, and they can coordinate with the financial institutions?
What’s the best way to break into an analyst role on a capital markets team? Would getting a masters in real estate be the best move if I only have a tenant rep background?
i have a general rule to not get an advanced degree simply because you want to leverage it into a specific job. I'd make sure you are genuinely interested in the course work.. From reading this site, i think most people here would disagree though....
For the most part on brokerage teams, analysts are personality fit more than advanced credentials. It definitely wouldn't hurt your resume though.
Ya from what I've sort of generally gathered from this site: a masters of MBA doesn't really help in brokerage type roles. Network. It would seem better fit if you're trying to come in as an associate (maybe analyst?) at a REPE, development (Hines, etc.), or acquisitions team. Again that's just what I've gathered from reading here and someone that is not currently in RE.
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