Dream Chaser Wanting to Build a REIT (Build my Career)

Hi people,

I'm looking for a little advice here with my career. My ultimate - swinging for the fences - long term goal is to build a diversified REIT (Multi-Fam focused on affordable housing, lodging focused on upper upscale, and luxury hotel, and finally data centers). This is a life time type goal. Short term goal is to make a jump into the REPE, REIT, or Brokerage field. I don't know which would be best for my long term goal.

I have my undergrad from a top 75 (I know not great), but the hospitality program which I graduated from is a top 25. I've worked for some of the big name hotel brands since graduating and have been moving up rapidly. I've hit a number of highs in my career with breaking sales goals and other career achievements etc. I'm 29. I was looking to make a jump in about a year, but with what's all going on I've stepped that up.

Currently --- I'm doing some self study in financial analysis, modeling, and real estate analysis. I'm in a smaller market MSA is under 2 MM. There's only one REIT in my city and CBRE is the only other big name employer in this field that I can find. I have a strong network, connections to large and small VC funds, and have some people that are willing to introduce me to REIT professionals in NYC and other larger markets, but I want to be make sure I'm prepared to make an amazing impression. I understand that someone coming from hospitality without a prestigious school might be looked down upon. I'm someone who grids it out because I was never a classroom kid, but I'm quick to learn.

I have plenty of questions, but here what I want to know; knowing my long term goal and background how would you build my career? Ideally, I'd like to work for a REIT focused in Hotels/Lodging, but that won't happen for a couple of years until I can move.

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Comments (20)

May 4, 2020 - 4:46pm
DavFamous, what's your opinion? Comment below:

Hey, thanks! I've had a lot hard knocks in my life, I love criticism it's helps flesh out the ideas further. I've considered what you said before.

I got a long ways to go until I get to actually putting together a fund. Before I get to that level of having all three asset classes I would start out focusing on an individual class and then build on from there. For instance start in multi fam then look at jumping into lodging etc. Maybe building a separate fund, but that's not my focus right now. Right now it's getting the right exp/knowledge and network first. I really appreciate your insights!

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May 4, 2020 - 6:23pm
Trunk Yeti, what's your opinion? Comment below:

I also don't wanna crush dreams, but I feel like you haven't really thought this through. Diversified funds do not provide additional value to their investors. The only benefit gained would be portfolio diversification, which would be more effectively accomplished by spreading capital across multiple vehicles.

Those asset classes are pretty much on the fringes of commercial real estate, and frankly, are almost entirely different businesses. The only similarity between data centers, luxury hotels, and affordable housing is that they sit on dirt.

Lastly, capital would be almost impossible to raise. Equity is already difficult to raise for those asset classes, and it would be compounded in that the investor would need to be interested in investing in all three. Debt would also be near impossible to raise. REITs rely on RLOCs to smooth of their equity inflows. I can't imagine that there would be very many banks interested in getting in on a syndicate that is lending to the most obtuse REIT in the marketplace.

You're already at a disadvantage in that you do not have finance or real estate experience, you're in a MSA with limited opportunity, and that you're going to be in your 30s soon. My recommendation to you would be to cast a very wide geographic/asset class net and seriously consider graduate school. Once you get into the industry, focus on one asset class and become the master of it.

May 4, 2020 - 6:58pm
DavFamous, what's your opinion? Comment below:

Great insight, I really appreciate it! I don't know what I don't know and reading your insights are perfect experience for learning. The graduate school route is something that I've been highly considering, but I want to cut my teeth in a role before going to get a bit of meat on the resume. For graduate school would you suggest the MBA or MSRED route?

I guess a follow up question would be what job would you suggest I dive into next to understand REIT's better? Or am I in a "just a get your ass in the RE field type of situation."

May 5, 2020 - 12:59am
Trunk Yeti, what's your opinion? Comment below:

Well, being that you're 29, I assume that you already have several years of work experience. If you feel that you can land at a top 20 MBA program then by all means go that route. If not, then I'd recommend finding a lesser known real estate specific program that places well regionally in the markets that you'd like to work in.

What specifically do you find interesting about REITs?

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May 5, 2020 - 8:31am
DavFamous, what's your opinion? Comment below:

I do have a bit off experience. 6-ish years working for major hotel brands, Marriott, Hilton Etc. To your question about why I find REIT's interesting. Well when I was early in my career I interned at a luxury property that was still being developed, so I was there for the pre-sell stage. It was what we would call a destination property, but that's just code for rural. I was only there a summer, but I saw how the project lifted so many people out of poverty and gave them a job that they felt pride in. I also really liked seeing how much the returns were. In an area that was previously farm land, the sales team was selling these hotel rooms for rates that would make The Plaza blush. I saw this and felt the urge to get into building and developing properties. A director of the project, who I would call a mentor, advised me that I should work for some major chains then start diving into the RE world after.

The way I see it to develop properties like that you need to understand how to raise and deploy capital. The best way I see to raise a lot of capital is through the public markets, hence, REIT's. At least, that's what I've come up with so far. As my journey continues I'll probably adjust and that is why I'm on WSO.

May 4, 2020 - 8:05pm
weaksaus, what's your opinion? Comment below:

I agree that you need to get some work experience before going to grad school, or at least a MSRE. Start researching brokerage teams in the area and try to network with individuals at those firms. Operators or even Property Management firms could be good options to get started as well

Being an analyst on a larger team would be a great stepping stone. Since you have experience in hospitality, it may be worth taking to teams that focus on hotels and lodging. Now is obviously a tough time, but six months ago that would have been the most natural transition and likely easiest to get some traction.

After getting some real world experience, you'll have a better idea of what you do and don't like, what types of roles interest you, and how you can fit into the industry. At that point a MBA vs MSRE decision can be made. Generally speaking, MSRE is for CRE professionals looking to pivot/advance or professionals looking to pivot into CRE. MBA is going to be a much more comprehensive program

May 5, 2020 - 11:30am
DavFamous, what's your opinion? Comment below:

Thanks for the input, that's really solid advice! I was actually looking at teams that focused on hotels late last year/early this year and was planning on networking in 2020 then making the jump in early 2021, but... things changed a bit. Ha. Thanks again!

May 4, 2020 - 9:37pm
frankzombie96, what's your opinion? Comment below:

Just to play devil's advocate - STWD not only is diversified REIT in CRE, but also does debt and equity - and even has resi and infrastructure exposure. It can be done, but you need to really get 'up there' to Barry's level. Your head is in the right place keep learning and see what happens. Even if you dont get to your ultimate goal, you'll be surprised as to what you could achieve. Remember Real Estate can be pretty entrepreneurial and you may change your business model/ambitions many times over the next few years.

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May 5, 2020 - 8:39am
DavFamous, what's your opinion? Comment below:

STWD is actually one of the REIT's that I have based this idea around. Barry is someone who I deeply respect and have looked at just about everything he's done under a microscope. I see my model changing as I learn more, but you got to start somewhere, right? I much rather have a big - unattainable - type of dream and not meet it than to dream smaller and meet it because I'd be asking myself if I could have done more with life. Thanks for this advice, it was helpful to me!

May 4, 2020 - 10:33pm
creops, what's your opinion? Comment below:

I would highly suggest networking into the REPE field. The problem with REITS in your situation is that since they are publicly traded, institutional players, there's simply not that many of them, and a lot of them are located in large markets because of the greater access to talented real estate analysts and managers. REPE shops may be much easier to find in your market. Coming from a REPE fund would give you a much more property-level insight into how these deals are analyzed and underwritten, bought, managed, and sold. Once you figure out how the #'s work together you'll be in a much better position. Good luck

May 5, 2020 - 8:42am
DavFamous, what's your opinion? Comment below:

See I would have though that it would have been harder to break into REPE vs REIT's. I guess that more because of the REIT's visibility. Since they're public I can do more research and find info more easily. I'm going to dig into REPE a bit more now, thanks!

May 4, 2020 - 11:27pm
redever, what's your opinion? Comment below:

Okay, so I think you have received plenty of takes on merits of diversified vs. focused REITs, why that was so relevant... well... welcome to WSO.

To your actual question, how to get in the game... or eh... institutional commercial real estate.

The answer is to take whatever route you can find that is open to you. Don't be picky, just get in the game, you can figure you next steps from there. You may be able to join a hospitality focused team at a brokerage or asset manager, given your career exp. Frankly, anyone can get into CRE brokerage, but unless at a high quality shop on a true institutional team, I really wouldn't recommend it.

If you really want the best shot at your long-term goal, you probably should look at MSRE programs in major markets. Take the plunge, move, go to school, get involved like crazy, network, and get a job. You are not too old (that is silly, yet it was implied in some answers), and MSRE programs are designed with people like you in mind.

If you could get into a really top MBA, that may be a better route, but unless you get a super high GMAT, no dice. You seem like a good fit for an MSRE. Check out NYU, USC, Georgetown, etc. They are not that hard to get into if your UG GPA wasn't super high and they generally don't care if you have taken the GMAT if you have work experience (this can be hit and miss).

May 5, 2020 - 9:21am
DavFamous, what's your opinion? Comment below:

Thank you, thank you! I needed to hear that about brokerage because it seems like the easiest route to get in, but it doesn't seem like I would learn the skills necessary for what I want to do.

Georgetown is one of the programs that I'd looked into, but I'll dive further into those you mentioned. My Alma Mater has a top 25 MBA program, so I might be able to squeeze in there. I'm going to move and get into a larger market, but not just yet. I have some other commitments that I have to wrap up before I can.

I appreciate you making note of the commits on age, but those types of commits are comical to me. I know they come from a good place and mean well, but you would think my life was over. Ha! I network with a lot of people my age and older and what I keep hearing is from 30-40 is when you can really get ahead. Taking the next 10 yrs and doubling down is where a lot of growth and learning can happen and late 30's/40's are a good time to launch businesses with the knowledge you learned.

I see 20-30 as more of the finding your footing stage. Personally, I was extremely aggressive in my early 20's which blinded me in a way. Launching side business without the adequate skills, taking promotions without thinking though my career goals. 30 is a good time to look back and take a snapshot what you liked and what you didn't. Where you flourished and failed etc.

Thanks again for your insights, it means a lot!

May 5, 2020 - 11:50am
CRE, what's your opinion? Comment below:

I'm a little confused as to why you specifically want to "build a REIT." I understand the long term desire to start your own company, but specifically wanting to start a specific structure of company just seems...odd.

Commercial Real Estate Developer

May 5, 2020 - 12:22pm
DavFamous, what's your opinion? Comment below:

Thanks for the comment! From being in hotels I've worked for owners that are either pension funds, REIT's or PE. REIT's seemed like the most easily accessible because I was able to look at their structure through 10-k's and annual reports. Though I know a lot of work goes into setting it up on the front end it seemed easier to raise funding through public markets. Or that's the conclusion that I've come to. If I'm totally off base let me know.

Is there a good book, or resource that you'd suggest to learn about different types of RE structures? I'm all ears and here to learn!

May 5, 2020 - 1:12pm
MonopolyMoney, what's your opinion? Comment below:

If you want to do a whole bunch of different asset types, why not just try and start a company that has a few different funds?

CIM Group could be a good example of this done on a large scale, they have funds/ reits that target all sorts of different asset classes, Class A Office, Single Tenant Retail, Single Tenant Office and Industrial, etc.

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May 5, 2020 - 6:41pm

I don't get this at all, isn't the goal just to get rich any way you can? Try to own some properties instead. Anyway, any time I look at REITs I fear for my life at this point because the dividend can always be at a threat, RE for the sake of appreciate makes no sense since it's cyclical in the medium term. Also look at macro data, it's not like things are going to rise in real value, just nominal at best.

May 6, 2020 - 7:29am
Dr. Rahma Dikhinmahas, what's your opinion? Comment below:

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