Development vs Loan Workout
I’m a graduating senior trying to decide between two job offers and could use some advice. One is with a large real estate developer in a smaller to mid-sized market. It’s a rotational program and the firm just raised a new fund, so they’re very active right now. The other offer is with a loan workout team in a major city with lots of deal flow.
Both are great opportunities, but I’m struggling with whether to start on the equity or debt side. I would love to hear thoughts about exit opportunities for each and which might provide better long-term value. Also any advice on best things to keep in mind as I make my decision.
Look, you should pursue the things that interest you. Development is going to be a more traditional real estate role. Loan workouts are more of a pure finance play. One isn't better than the other, just different.
However, since you bring it up repeatedly, it is worth saying this. A development firm which is still raising money and still active after the last few years is one which is very likely to have a substantial pipeline going forward. A loan workout team is almost by definition going to be super busy now, but may not be so in 5 years. The point is, for a development firm, we are in the bottom of a trough for their business, or close to it. For a loan workout team, it's the absolute top of a peak, or close to it. If future deal flow is that important to you, I think the development firm sounds far better positioned than the loan workout team. A company that stays busy off cycle is more impressive to me than one which is busy in a hot market.
Loan workouts is very broad. Are you joining a note buyer or like a special assets group at a bank?
It’s a CMBS Special Servicer loan workout team
I’ve never worked for a special servicer but have worked with some former special servicers. I think you will see a lot of deals across a wide spectrum so you will learn a lot. I used to work in workouts at a lender and enjoyed it but a lot of what happens is so far out of your control. I think development will be more interesting tbh. I would only look at the special servicer job if it’s one of the top 3/4 shops.
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