CRE in a nutshell
Can someone explain this industry to be in a nutshell? I started college more into the IB/IM side of things and I am starting to care more and more about real estate funds. I think it just feels more....tangible to me.
I understand what a commercial real estate analyst does but I don't know anything about the progression or comp. I'm wondering how you get into the industry out of college, how you progress from there, what the typical career path is, what is the lifestyle like in terms of hours and comp, and in general do you like your job?
I get that I am asking for a lot but any help at all would be appreciated. Hope everyone is staying safe and healthy during this all this craziness.
In a nutshell, there are three business models (this is clearly an oversimplification, but that is what you asked for!). Note the items in () are the actual department/job fields.
Raise Money (Cap Mrkts/Invst Rel) -> Buy Property (Acquisitions) -> Collect Rents (Asst. Mngt) -> Pay Profits, Keep Some (the business of RE IM, REPE, or just "ownership")
Raise Money -> Buy Land (Acq.) -> Design/Build Stuff (Development, Construction Mngt) -> Sell/Keep/Refinance (the business of Development)
Raise Money -> Originate Loans (origination) -> Analyze/Underwrite (underwriting) -> Collect interest (servicing) - Pay Profits, Keep Some (the business of Debt Lending)
There are also the "service" industry that help all that happen that is above. Real estate brokers, investment bankers, appraisers, property managers, research/consultants, data providers, etc.
Again, major oversimplification, but in all reality CRE isn't that complicated of a business. You either buy, build, or lend. That is the game!
bump. Can anyone talk about how to get into CRE and what lifestyle is like?
You get in primarily via networking and/or applying to roles online, like any other job.
The lifestyle varies wildly based on company, company type, role, seniority, strategy, etc.
There are tons of resources here and elsewhere to answer some of these bigger questions you have. We're generally happy to answer any specifics once you've done your research, but "Can someone explain this industry to me in a nutshell" is waaaaaay too broad.
Got it. I'll look deeper into it. Need something to keep me occupied during quarantine anyway
To echo the above...
"get into CRE" is really broad.... Going to work for Blackstone in REPE will be really, really tough on a good day (but I mean, they do have to hire sometimes...)
There are tons of shops and firms of all sizes. It's more diverse and spread out that IB, PE, or anything else in finance. If you go get a real estate sales license (which can be a simple as like 60 hours of instruction, passing a test, and being a HS grad), I bet you can get hired as a "commercial real estate broker" by the afternoon. That won't mean much by itself, but it is true.
Lifestyle is just a diverse. Large corp jobs just like IB or corp fin, to small entrepreneurial. I mean, not to offend, but you kinda asked a question like "how much does the average bag of groceries weigh?" ..... Even if you got an answer, I'm not sure it would mean anything.
People like and stay in CRE because it is challenging, fun, and very rewarding when done right. We tend to find traditional finance and corporate stuff boring by comparison (at least personal opinion). So welcome, to the club, as you learn more, it will make sense!
Thanks for the help. I'll do more in depth research and figure some stuff out.
Interned @ repe shop (+20bn aum), can agree with most of the posts here that it can be very broad. As with any job, networking. I enjoyed my time, however, decided to transfer to REIB in bigger city for more exposure and more English team.
Path at my shop: Analyst, Associate, Manager, Senior Manager, Director, Sr Director, MD. intern/analyst hours probably 60 good week to 75. You can be looking at Public Mkt arbitrage via REITs, buying up an entire city via four story apartment buildings, creating internal whitepapers on certain RE food group, it really depends and you get to wear a lot of hats...
In addition to searching threads on this website, perhaps start with some more formal reading materials. There are lots of RE book lists on WSO as well, but I think a good intro book is The Real Estate Game by William Poorvu. It is development focused but also covers some other areas such as financial markets, REITs, etc.
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