I talked to a CRE banker today at Citizens same age as me (31) who told me he made $150k+70% bonus last year working 40 hours weeks. I believe him. Why am I working 60 hours/week in REPE acquisitions making $140k+30% if I can just be a banker and do basically nothing? I thought banking comp was so much lower? What am I missing?
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You’re probably missing the scaling of cash compensation and carry. Also, REPE isn’t the highest paid cash comp just because it’s “PE”, there’s really only a handful of firms that pay really well, the rest pay average.
Yeah makes sense but still from a risk/reward perspective you’d expect REPE acquisitions to be making significantly more than a non-top level commercial lender! I could lose my job any day if we weren’t acquiring new properties, he’ll never lose his. My company would also never hire someone with that type of experience. Sure, I have minimal carry but we’ll see if it actually gets paid out.
Plenty of origination roles at banks have been cut due to the lack of transaction activity.
1 - he could lose his job
2 - if you are at a small shop that does a couple deals a year it is conceivable he does more volume alone than your shop
To be clear is that an associate making 250?
Relationship Manager II
Yeah, but what is your "title"?
U gotta get ur bread up. Curious what others think but sounds like u are underpaid.
Right.. I’m trying to find good REPE acquisition Associate/VP compensation comps to show my boss, but they’re hard to come by
RealAssetzz has a solid one
Bonus points if you scrape NYC postings and adjust for COL
Banks pay well. I’m on the portfolio management side and make like ~$140 TC as a 25 year old in a T2 city and I rarely work over 40 hours now. However, the work is incredibly boring unless things go wrong.
Sounds pretty accurate. A lot of these bankers/producers/whatever title can pull quite a lot compared to their buy side counterparts (at the junior, mid-senior level).
I’ve seen many analysts and associates routinely take home $200k+ in great years, as well as mediocre years. But as we all know, everything is team dependent.
Debt side is rough. Much higher deal flow. Not sure why people think you do nothing as a banker…if you don’t produce you get fired. You’re selling cash - a commodity. The only way to win is lower your pricing, give less stringent debt covenants, or increase proceeds. All things create higher risk…
This. If I want to get a loan on one of my assets I can speak to 30-40 lenders and get 10-15 thought through term sheets. If I want to sell my asset, I’ll be lucky if I 5 credible bids in the current market. There’s a serious amount of competition in debt and there’s a lot of work both inside the bank and outside of it to be competitive on deals.
That only kinda helps make the case that you have tons of places you can work on the debt side, atleast relatively compared to the brokerage side. The 30-40 places you will go to are not working on term sheets only for you. They have other clients as well. There is a lot of work to go around. Debt especially banking is a place that has a lot of bloat where you can coast and still earn $200K+ with majority of that being base pay. This does not happen in REPE too often. There is a reason why you will have so many lifers coasting in banking than REPE. The Citizens example OP pointed out also helps makes this case in the sense that Citizens is a bottom of the barrel bank and one can earn a good comp with a strong base even there. Yes people can get laid off in banking just like anywhere else but atleast you are earning a strong base pay till you get laid off and should not be too hard to land on your feet given the number of shops there are.
Some grains of truth, but overly simplistic and not necessarily true at many types of banks or other lenders during this period of higher interest/lower new origination volume generally. You might say it's only temporary, but we're about 2 years into this environment and it could continue another year or two without major change.
Generally speaking, all lenders or banks aren't just trying to pump out new loans at all times. Even if the macro variables shift to a better liquidity environment, each lender is going to have specific capital limits and budgets.
My basic point is saying "debt side is rough" is like saying "no new deals are penciling right now". Might be true for you, not at all for others. Debt side can be rough, it can also be the opposite for very extended periods, and for certain roles nearly always.
100%. But when the average loan term of the bank loan book is 3 or 4 years - if they don’t keep pumped out new loans profits will fall. I’m going to agree to disagree with you.
I'm at a smaller shop as an associate (mid twenties) working on our acquisitions team. Not a true REPE moreso owner operator who co-invests. I'm making $125k+20%; you are for sure being underpaid.
What market are you in?
What do you mean not a true REPE, more a owner operator that co-invest?
Doesn’t REPEs co-invest? Your firm just doesn’t have funds (asset by asset)?
- Midwest but assets across the country
-Bread and butter is mgmt fees from operations. Minor co invest on the GP side but not on every deal we manage.
I'm 29 and do the same thing as that guy (CRE banker/originator, but bigger bank than Citizens). Currently making $142K+25%. Less than him but similar to you. I feel underpaid, so I would concur with others that you are underpaid, given REPE, years of experience, etc. I work 35-40 hours a week. What market are you in?
Are you an originator that goes out and hunts for new business or essentially an account manager that works on deals when a client (typically institutional) comes to you instead?
Moreso the latter - have a portfolio of clients who come to me when they need a loan. They are mostly upper middle-market to institutional profile. When times are good and we need to grow loans, I'll do some hunting for new business, but it's a focused list of "prospects" who fit our target borrower profile, not just anybody. Right now appetite for new CRE exposure is low, so we're just focused on existing clients vs. bringing on new names. My comp is correlated to my loan production, but it's not a formula AKA i don't get a defined % in bonus for every deal. That has pros and cons.
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