CRE Debt alternative career options
Currenty in D/E brokerage working primarily on the debt side (~2YOE).
Like many other WSO users, my initial plan was to transition to REPE acquisitions. Over time however I've started to really enjoy the debt side and am interested in exploring more credit-focused roles in the world of real estate that aren't traditional direct RE lending.
Wondering if any RE guys on here have any experience in the world of leveraged finance, ABS, back leverage lending, loan on loan (RE specific) or any areas that I may not be too familiar on.
The goal is to eventually transition to a more traditional credit role but maintain real estate as a focus. I've looked at leveraged finance roles and ABS teams at banks, potentially fund finance etc. (CMBS not really a thing in Europe) but I'm assuming it is near impossible to get these roles without a banking background.
Another option is a traditional RE debt fund that gets a bit more creative with the cap stack/ takes leverage / has various capital pots etc. but am keen on the idea of a slightly more traditional finance based role.
Any thoughts on roles I may not be aware of or any experiences on transitioning as an analyst would be much appreciated!
Based on the most helpful WSO content, here are some alternative career options and insights for someone with your background in D/E brokerage on the debt side:
1. Leveraged Finance and ABS Roles
2. Loan-on-Loan and Back-Leverage Lending
3. Real Estate Debt Funds
4. Fund Finance
5. Structured Credit and CLOs
6. Alternative Lending Platforms
7. Private Credit Funds
Transition Tips:
These paths align with your goal of maintaining a real estate focus while transitioning to a more traditional credit role.
Sources: Debt and Structured Finance Brokerage Exit Opps, Role of Quants in Credit Investing/ Trading: ABS, Structured Credit, Corporate Loans, So you want to work in CRE Debt? Here are the options..., CRE Lending Exit Opps?, https://www.wallstreetoasis.com/forum/real-estate/state-of-the-cre-debt-markets?customgpt=1
bump
This is an interesting post. Have a buddy, plus a few guys on my team who made the opposite move. My two cents - it's easier to move from corporate credit/ABF/LevFin to real estate credit than vice versa. Not saying you can't make the jump, but it may require an MBA. If you want to take a crack without Bschool, warehouse/note-on-note CRE lending is likely where you'll get the most traction.
Idk man I’ve done several years of corp credit and leveraged finance but not able to move into RE Debt
Thanks for the reply - would totally expect that to be the case in terms of transitioning from CRE credit to ABF/LevFin and vice versa.
I feel as though to increase the chances of this being achievable I'd probably need to make the jump relatively soon while I still only have 2-3 years of experience. I'd imagine the longer I leave it the harder it is to get in as an associate, whereas from my uninformed view is that perhaps these banks may take a chance on an analyst with a few years of experience (tell me if you disagree).
Any thoughts on finding these warehouse/note-on-note roles? I don't see them anywhere at all but I agree this is probably the only type of role I'd have any chance at getting in the LevFin world (and still incredibly slim).
ABF and LevFin seem doable, but you aren't going to know until you try. If you don't get a bounce, keep the MBA card in your back pocket.
Finding a warehouse gig should be fairly easy, but you've gotta network and likely move to NYC (if you aren't here already). Start with some of the bigger shops like Atlas, Blue Owl, Waterfall, etc.
Bank credit could work. Banks are in dire need of talent in credit. Portfolio managers can make 150k or so with bonus, and senior credit roles can do better. Income potential is somewhat capped though. It is a pretty cushy job / career path.
I agree, your at $150k for a relatively stress free job. I know most of this forum would hate the pay, but the lifestyle is incredible.
Can confirm.
I genuinely know next to nothing about this career path. Any insights into day to day tasks? Why is income capped? What do you do before this type of role and what could this set you up for?
PM here. Day to day tasks on the debt side are largely around collecting financials and running DSCR/LTV calculations. Nothing too crazy. Then quarterly we do write ups for management and its nothing too hard either. Alot of times we're on the phone with borrowers either requesting info or asking questions. A handful of every PMs deals will go south and once that happens that gets transferred to our special assets team. Depending on the bank and if you have analyst support or not, you're typically managing 40-50 loans. Most of which are performing fine. Income is capped because your not really doing anything on the relationship side such as bringing in new business or anything. Its really a 9-5 job, heck I know people that have weeks where they really only do like 25-30 hours of real work on slow season. Reporting time your probably looking at 40-45 hours a week. Director levels make around $220-$280K though. Higher than that you make $300K+ but youre not really running any loans at that point, more so just managing a team of PMs.
At your level, prioritize a bank over an RE specific firm; ideally anything front office in a financing group (e.g., DCM, lev fin, ABS, etc.), otherwise explore adjacent teams such as credit risk. I've seen juniors lateral internally from support roles into banking teams but would flag these moves are bespoke and uncommon; it can be done but definitely need strong performance/hustle. Patience required here. Would flag a move out of credit will become more difficult the longer you stay.
This is the perspective from US. Agree on your point with CMBS in EU. Those teams in London do a fraction of what is done out of NYC. Warehouse finance teams at banks have been growing hugely since pre-COVID in the US, but not sure how those groups function out of EU - may be done more generally out of a sponsor finance banking team.
Thanks for the reply - this is really helpful. Noted re. prioritising moving to a bank rather than a RE specific firm. I will say that the lack of a European CMBS market seems to mean that my existing skillset would be almost entirely irrelevant in lev fin, ABS etc. over here which is unfortunate which is why I think warehouse finance teams are probably the go-to option for staying within CRE but transitioning more towards the traditional finance side. For context, these teams have also become very active in Europe but their structure varies quite a lot across banks. I have never seen a role advertised at any of these teams so don't have much hope.
Unfortunately I don't think I'm at a point where I'd be willing to give up on CRE entirely and move into more general ABS/lev fin. This also doesn't account for the fact that I would assume it is almost impossible to get an analyst role at a team like that with no banking background. Would they not just hire out of their analyst programs?
Also in EU similar industry - had had a few discussions re NAV facilities, sub-lines, and loan on loan with banks. Typically it would be switching from RE desk to LevFin or derrivatives and I would imagine coming in with RE debt experience is probably less advantageous as one might guess, given these desks are more agnostic to the underlying collaterall (but just my two cents).
Thank you - that's helpful context. From the few bits of information I've gathered - there are a few banks who do this out of their traditional real estate lending teams but most seem to be operating out of their securitisation desks. I will say however that it looks like a lot of the guys (even on the securitisation side) are strictly CRE so as much as I agree that RE experience isn't the most relevant, I wouldn't discount the chances entirely. I would imagine this changes as you move more towards sub-lines and NAV facilities and away from loan-on-loan however.
Are you still looking to break into this kind of role? Have you seen many roles pop up and if so have you interviewed for any?
That could be the case, our firm has been trying to find options outside of loan-on-loan to give us flexibility with our capital on the type of investments we make. Personally, I find the scalability in those type of roles interesting, but all the banks and providers we have worked with are based out of London and I am not looking to relocate currently.
Tempora rerum dolores quam et voluptatibus natus. Consequatur sapiente illum ducimus alias quo quo maiores. Magni necessitatibus perferendis qui aut.
Cupiditate sed molestiae corrupti quasi. Laudantium debitis dolor nesciunt eius. Repudiandae perferendis necessitatibus non et consequatur. Quis sit praesentium est vero veniam voluptas consequatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...