Dev->Brokerage, is this crazy?
Been in development a few years (3-6). Received title and seniority bumps, pay is fine. Got lots of preconstruction/construction experience in MF/retail/some office. Been in both family office and PE environments. I have:
(1) no interest in being head of development/construction or doing this as a career, but I like RE a lot;
(2) want lots more independence and the ability to say “screw it, im WFH today or visiting a property I want to buy for my own portfolio” without penalty. All three firms I’ve been with, the head of development was on a tight office leash, same with head of acquisitions.
Is moving to brokerage (I have a full broker license) a terrible move under the circumstances? I don’t have the resume to move to acquisitions or more finance oriented roles. Starting out in brokerage in early to mid 30s seems bad at first but if I chose the right firm maybe it could be great long-term? Any insight or examples would be appreciated.
If you want to sell sell sell and understand what you’re getting yourself into, it could be a great move. But if you think it’s an easier life - I think you’re mistaken. A successful broker needs to work 12 hours per day - it doesn’t matter which 12 - just need to work 12. It’s a really hard job. But if you are good at it and enjoy it, it can be an extremely rewarding career.
FYI if you move to an institutional team, you probably will be on a tight leash until you run your own team because you’ll still work for someone. If you work for yourself right away, you can do whatever you want.
Also, brokerage is client services. So that day off you think you’ll have - well your client needs the BOV Monday and it’s Friday at 5 PM. Guess you / your team are working the weekend so you can have your chance at the upcoming fee which may or may not materialize.
Thank you for the helpful response. I would not do institutional. Are there any areas of real estate or companies you recommend for a more hybrid or full WFH schedule? I’ve seen some LIHTC full remote development positions but no interest in that product at this point.
You are not too old. Just get on a good team that sees value in your experience and focus on a product type with a viable future. IS or D/E, depending on the market.
Thank you. Realistically I’d want to do IS, probably MF. The CBRE type shops are very formalized and less entrepreneurial, so I have gathered (maybe this is unfair). There’s also a ton of M&M type shops that’ll grind you to dust. I am keeping my ears open for a firm willing to accept WFH for longer term brokers that is not known as sleazy.
If you're going to make the move you want to move to a CBRE, JLL, Newmark (not M&M). I was at a shop lesser than M&M in a big market and the name brand is terrible for future opportunities. Sure it's more entrepreneurial, but people will literally ask who tf you and your firm are when you call = meaning it's very tough to get business. It's about branding and perception, it's great to be more entrepreneurial but you have less structure, more bs, and coming in as new you want a very experienced team you're working on (talking billions of dollars in deals at one of those three teams, can find their name with completed $x0mm deals everywhere, have impressive backgrounds/websites) not some middle market sleezy salesman that looks like they could've been in the mob and provide very little infrastructure, are not organized, don't come in early and leave late, and have very little to no news and if they do it's close a 1k SF retail lease in a shitty area of a $2mm deal elsewhere. You're making the switch a little later, you want to do the most you can to set yourself up for success and work for a respectable brand. I would 100% say only go for those three I listed and be willing to work very hard, take a big pay cut, do what you need to land on those teams. Reach out to #1 guys at those shops, mention your development/principal (potential client) connections, get coffee and get to know them. You can 100% do a cold email but I am assuming you have some possible warm intros to some of these guys.
Perfect Scenario:
Who the hell is this VP at random middle markets shop calling me, I just got another cold call/reach out from a VP at Newmark who's team did $x billion last two years, I respect that firm let's go with them. And oh wait the other shop barely has a website, yeah no way I'm trusting them with 75% of my net worth even if they have experience. *FYI these guys could have done the same level of business at a top vs unknown shop but top is going to win 100% of the time due to perception, also you only want a brokerage which takes on exclusives none of this off market only bs.
first thought is land sales, although in this market there's literally no movement.
if you're wanting brokerage long term, start asap. no point in trying to time entry into the market because once brokerage volume returns so will your development gig in terms of bonuses and pay etc.
Thank you for the response. I want to leave sooner rather than later but I’m on my third or fourth job in 3-6 years. I really need to make the most informed, most considered decision possible so I can stay somewhere more long term. My title and pay bumps made one year stints understandable, but my resume would be underwater if I left in the next nine months.
I will second looking into land sales. With your development/construction background, it would be a great fit.
I will also second that it is a ton of hard work, but can be a lot more rewarding to the right personality. It is definitely the least "sell, sell, sell" type of brokerage as land deals straight up take forever to complete and you aren't pulling the wool over anybody's eyes. Most of my deals are 12-18 months to close, so you need a long runway to support yourself before your first deals close, and those deals won't pay much for the time involved anyways. It takes a long time to get up and running because you need to learn each city's zoning, identify parcels in areas that have desirable zoning with development potential, research and call all the owners, filter through a bunch of quick sale duds or loony sellers, and then you will have a bit of inventory to start marketing to developers. Then you have to market it to a tons of developers to hopefully find a fit, and then the 12-18 month timeline starts. So, a very very long time compared to most forms of brokerage.
My company gave me a draw for almost 3 years before I started making any money, but if you have savings already then you can get by without having to convince a company to give you something like that. This all sounds like undesirable, but the reasons its great are varied. First is because there is very little competition, since even in a large market, there may only be 5-10 commercial land brokers compared to 100s of brokers in every other product type. It allows you to get into working on large deals with big players much quicker than the traditional finance route. I've gotten to personally invest on the GP side of deals with our clients directly because they want us to keep showing them sites. Second is that its far more creative and allows a good broker to add real value to developers by being a legitimate advisor as opposed to a pushy salesy broker. We do a lot to help get these deals over the line and I work with these developers throughout the whole process to get it closed. Third is that the fees per deal are much larger than other deals at the same price, so can do lower volume, but still hit high revenue. Fourth is that because these deals take forever, you tend to be a bit insulated from the smaller ebbs and flows in the market. Fifth is that once the business is up and running, it's a much easier job per dollar earned than as an employee, but you have to get through the slog at the beginning.
I was told when I started in brokerage by an older broker that this job is the worst job you will ever work for the first 3 years and is the best after that. It was 100% true in my case and am super happy with where I'm at today, but it wasn't quick and easy street.
Bat sh*t crazy, don't do it..
Please explain. Everyone here has said it could work out.
This week markets just crashed and it's likely this is just a beginning.
If you read a few posts on WSO, there has been a c.20 to 30% delta between sell side ask and buy side bids - how do you think it will effect the brokerage sales volumes in the near future?
Usually 90% of brokers starve and 10% really good ones 'eat well' - I mean they eat very well but those ones work their a$$ off.
Many really good agents have a background in asset management, development or buy side before they become self employed brokers. Of course, there are a few pure brokerage super stars, but the odds are stacked against and not for you at the moment ( see the links below ).
Yeah, It's been a gravy train for the past decade in brokerage. Many new young brokers got into business making 'fat-stacks' and pushing 'cool-wheels' but in IMO what's coming up is much worst than 2008. Yet again, I subscribe to Michel Burry view on the market which is not the most popular amongst the investment community.
The short answer is I don't know for certain ( nobody does ), it's your decision to make at the end of the day. May be you have connections in brokerage a regular person does not have. Who knows, may be you make a switch and become like Darcy Stacom @ CBRE 'The Queen of Skyscrapers' or Robert Given @ C&W ' The King of Multifamily'.
If it was me, I would switch to brokerage in the market that is ramping up and not otherwise. The worst market is side ways, nothing is happening. Again, I don't know for certain - may be I am wrong, I've been wrong before.
https://www.bisnow.com/national/news/commercial-real-estate/jll-profits…
https://therealdeal.com/new-york/2022/10/27/cbre-plans-layoffs-400m-in-…
https://www.bisnow.com/national/news/commercial-real-estate/cushman-wak…
NB: if you do decide to switch into land sales, happy for you, it might be your niche - call Bill Eshenbaugh, good old TX cowboy (you can tell him a past client referred you to him to pick his brain) - this group runs significant volume of all land sales in FL ( a team of 8 with 126 land listings i.e. if you get into land brokerage you want to be like this group ), the hottest market for multi dev in US for past 5 years - https://www.thedirtdog.com/company/
How do you not have the resume to move to acquisitions, you have 3-6 years of principal side experience you could definitely do it start networking more with peers in that area may be a tough time but overall have the exp. Also if you want more flexibility go to a large, brand name family firm that is established in your market. They usually have stable assets, better quality of life, and not right away but maybe a year in you have flexibility with wfh/office especially in today's environment.
VP+ is kind of in/out as they want but they have to work prob 50 hours a week min. Slower pace and less deals because they don't have to get done but still get the name brand on your resume/assuming good perks.
Also was a broker at a not brand name firm and it's feast or famine in general. Only time you're seeing deals is at the #1 team in NYC and that's literally 1 or 2 teams max for IS or D/E. Even other teams doing $1-2 billion a year junior guys like senior associate/VPs get fucked by the more senior guys and they expect you to bring in deals to make money. It is not easy, not sure where you got that idea it's do what you want making the same money - maybe when your established but there are guys who work crazy hours and are established and you wouldn't start there. Also interest rates are insane and with where the economy is you could do $1-2 billion last year and do $1 billion or less this year so drastically affects income, brokerages laying off, and interest rates are affecting the CRE market for years to come which lowers transaction volume. Also that $1-2 billion is in a Tier 1 market like NYC which from what I understand does WAY more transactions than any other markets. You could be a VP making $3-400k one year then half that due to volume drop. That's not really a lot in your 30s in a very expensive market with family, where your income drops due to things way out of your control. Even the top brokers at the firm I was at where they were in Traded doing $40mm+ deals were broke, it's insane.
On another comment I saw, there's tons of time where you're pitching business you don't get even as a top 5-10 team in a Tier 1 market, during that time in your current role when markets are good or bad you know what you're getting every month. At your level in brokerage maybe $100 or $150k could be guaranteed pay but the rest not and that's in a Tier 1 market. Brokerage is very volatile, again to my last point in the last paragraph brokers that closed $100-150mm in deals one year and prob made $1mm income that year didn't close anything the next year and at times was asking me a first year for thousands of dollars to cover expenses.
I don’t want to be an analyst or even an associate. I want a lateral move and they’re not hiring acquisitions directors or managers without direct experience or an mba. I don’t have what they’d want.
I mean if you' have 3-4 years of exp then you might just have to take it an associate role but I guess from that you have closer to 6. Who have you talked to that said that? You just applied and assume thats the reason? You can build relationships with people at these firms and get in that way, it's not so cut and dry as no MBA/Masters you're not getting in.
What does your day to day look like? You can pick up modeling and try for an acq/dev role. Firms are more dev heavy now and not so much acq so good time to go. Talk to someone your level/you know on the acq side of your firm. Tell them you want to learn more about it, look at the models on the side, try to UW deals. Then put it on your resume.
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