A little background about me - I'm doing my MSRE at a non-target. As I'm interested in structured products, I feel like MBS is what I really wanna do. So I guess my question are: 1. As Dodd Frank risk retention rules imposed at the end of 2016, is CMBS market shrinking and less opportunities for entry levels? 2. How is the structures of CMBS groups? Originating team (I saw some Linkedin description claiming distribution),research team (or modeling team?), ST team...... Do they usually fall under the same division? Which one is easier to break into? I just assume the research or modeling stuffs need very strong quantitative backgrounds, please confirm or deny. 3. Non-target and no relevant internship, I know that hurt. My GPA is not bad and I sat for CFA Level 3 this month (don't really think it helps). So is it nearly impossible to break into CMBS? Any insight will be much appreciated. Thanks in advance.
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I was on CMBS sell side (primary issue, not S&T) and then CMBS buy side for a few years. Given your background, I think your best shot will be CMBS originations/underwriting and then if you really like the securities stuff, try and pick it up on the job and then hope to lateral to S&T or get recruited by buy-side. Depending on how many years you racked pre-MSRE, I would expect you'd come in as a mid-level analyst or an associate. To the extent you can do direct networking, that would be a positive. You can also try tracking down Sonali Dhall, at Situs, which staffs lower to mid-level talent at several CMBS shops. CMBS underwriting has a lot churn so they're usually looking for people, whether or not the industry is shrinking. Try to land at a BB or a shop that's more likely to survive the shrinkage that's happening right now. I wouldn't want to be on the wrong end of the negotiating table when it comes to retention and bookrunning these days
Thoughts on LNR, Rialto Capital? Are those decent shops to begin your career? And do you need any license/certifications (like NMLS) for CMBS originations/underwriting? Thank you!
Actually I don't have much real working experience, so I'm focusing on OCR now. Is originations/underwriting MO? Do they have open positions for entry level analysts? Thank you!
Yeah I don't know how well OCR feeds into CMBS groups. The BB I was at took a handful of entry level feeders from the SA rotations but the vast majority of junior and mid-level people had lateralled in at odd times. In my experience, CMBS primary issuance hiring is more like the rest of CRE - just in time - rather than structured S&T/IB recruiting
Strictly defined, originations/underwriting is a front office function - you're directly dealing with clients (in this case CMBS borrowers)
Hey man, not sure if you are still active on the site, but would love your insight. I am in the early stages of my career and I have an opportunity to work in CMBS origination/underwriting at a bank that is one of top 20 CMBS originators, but on the lower end of the top 20. They also have a balance sheet lending group. While the good news it that they seem to be on a hiring spree, a bit unusual at this stage of the cycle and have also survived the massacre that killed tons of CMBS shops. However, my concern is that with risk retention, the CMBS space is going to structurally change where there will be severe contraction, and it wont be as impactful as it once was and not finance 25% of CRE as it always has and there will be fewer players in the space. Last year, only half the lenders contributes loans to CMBS deals compared to 2016. Are my concerns valid? If you were in the early stages of your career today, how would you feel about being in the CMBS originations, underwriting space? Really appreciate your insight, thank you!
It's been a minute but I would say those two are in it for the long haul
If you're talking about LNR then you mean b-piece? If so, probably a great experience for the sheer volume of real estate you get to look at. Not to bash sell side but I imagine there's more intellectual honesty in the b-piece exercise than there is in CMBS underwriting/originations. Even if you're hoping to have recouped your basis before you get blown out of the stack, at least you're acknowledging that SOME NUMBER OF LOANS IN THE POOL WILL GO BAD AT SOME POINT.
I think there's been some posts on here about Rialto. Check those out
I didn't do or need any certifications. For BB S&T they would surely make you get some
Thank you! do you think working with b- pieces at LNR/Rialto/Eightfold is less lucrative-salary wise (I am not too concerned about prestige) compared to CMBS underwriting/originations?
yeah you are going to end up getting paid less but it'll be a more stable job, think of it as investing in a lower cap rate market.
I wouldn't sweat a 20 or 30K delta at your age. Worry about the experience and the long-run exit opps
Bump Any insights on research team? Thanks in advance
It's hit or miss with research, especially with junior roles. Just thinking through the various current/former sell side research guys/gals (both heads/juniors) and their trajectory, its all over the place. Most of them end up in good places, but they knew, or understood quickly, that is was a means to an end.
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