CRE Debt Asset Management vs Equity Asset Management
Anyone have experience with working in both debt and equity CRE asset management? I will be working on the debt side but my goal was to be in equity such a REIT developer or Multifamily owner and operator. What is comp, WLB, and culture like between the 2?
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Bro why did you take the job if you are asking these questions.
Debt AM is harder at the earlier levels, while Equity AM is harder at the later levels.
What do you mean by "later" vs. "earlier" levels?
This is a ridiculous statement..I would love to hear the rationale behind why monitoring why a DSCR is 1.2432985x instead of 1.25x is harder than Equity AM. Debt AM (assuming we are talking basically Loan AM not Debt PM which this forum always gets confused when talking debt..two completely different roles). Debt/Loan AM is basically a 9-5 job.
Debt AM in a good market is a cake job, but not so much in a downcycle. I was doing problem loan workouts and restructures coming out of the downturn in 2009-2012 and it was extremely difficult. You have to know the loan docs in and out, understand the legal implications of any action you take, analyze property financial/market conditions for internal valuations in case you take it back, be able to communicate what your doing both at a high level and in detail with all stakeholders involved, and negotiate with a desperate sponsor whose relationship may or may not be worth salvaging. It was probably the best learning experience of my career and definitely opened the door to many front end opportunities on the debt and equity side.
It also depends a lot on the kind of deals you work on.
My portfolio is all transitional with a whole lot of construction.
My job is to be up to speed on loan documents (and our options to do/not do stuff), local legal/zoning practices and requirements, and the engineering/construction process. Yes, I have a lot of consultants and outside people to help me, but it isn't like I can just sit in my office and rubber stamp shit and it will all be okay.
I'm part of that hybrid PM/AM crowd where my role bleeds into portfolio/fund construction, investor relations/reporting, but I still handle day-to-day AM as well.
That isn't to say that one is harder than the other. The skillset is different because the focus is different.
I don't need to know hyper detail on leasing in a sub-market. I don't need to have strong tenant relationships.
What I need is to be strong on the legal/compliance side. Understand lien law and how taxing authorities work (because they can prime my mortgage). I have to understand in depth about insurance, environmental and general property maintenance issues.
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