Generalist vs Specialist
Seeing the trend going towards firms and individuals specializing in one or two asset classes would be curious to hear others thoughts here and where people think best long term career prospects are in specializing
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So, I think everyone needs to develop at least one specialty (in reality, you may shift/augment or outright change over the course of a career) and generally the earlier in your career you do it the better. Despite the way it's discussed "analyst" with specialty in "modeling/excel" if of extreme unique value and not something you can build a career upon.
So.... what should you specialize in??? I mean.... here is the truth.... at the beginning, you prob don't have many options.. as in you get the job you can get. If you go the "acq/AM or investment sales" routes then becoming a property type specialist is pretty natural (and can move between all such roles within that property type as an advantage player). If you go the "capital markets, finance, D/E, lending" type routes then you can be more specialist in the type of transaction/financing/process (and move around as such in those fields or doing that type work for various buyside entities). If development, then you could specialize in part of the process (like design, entitlements, construction/project, mngt, or even acquisitions/land scouting and others), OR could focus on a property type (like being 'full cycle' for office or apartments, etc.) OR be market/sub-market focus (like anything that can built in this part of town, only a thing with small scale development in my opinion). There are also specialties like research/strategy (my current one in full disclosure), and investor relations/capital raising and other stuff like that (many have great flexibility across firms within the role specialty).
As to what one should focus on if they can direct their career as such (tbh, many of us are just sorta forced into our specialties and chose to just go with flow, and frankly that is often very optimal)......... I guess should try to go with what really seems exciting to you and will be in demand and you can be good at (that is the classic career advice way anyway).
Personal opinion (and not really common wisdom on WSO tbh).... the more difficult and/or less attractive it is to the "masses" yet still valuable to the industry and in demand can be very smart long-term. I think appraisal is a good example of this (note, I've never been an appraiser, just many friends in it, and many no longer in it as they used their skills to propel big careers in buyside firms...). Valuation is core to real estate investment decision making, thus being good at valuation/market analysis (like a good appraiser should be), plus skills in writing/presenting (I mean, those 200 page MAI reports don't publish themselves lol), translates very well to acquisitions, development, and even investment sales. Carrying "valuation" and/or "market analysis" as a specialty can be powerful.... and even being an 'experienced/specialized' appraiser can pay very well (like north of $400k or more). (NOTE.... I am not suggesting anyone or everyone go for appraisal as a career.... just making an example of something looked down on that could actually be very good if one is smart/strategic).
Agreed on your last point. Started out in appraisal and while I never suggest people pursue it as a career, it really can be a great springboard and build a solid foundation of skills. Absolutely zero "prestige" as far as first jobs go, but not everyone has to build a successful career off the MF REPE path that is so lauded on this site.
The generalist experience I got early in my career was invaluable in my mind. Was a middle-market shop working across the tri-state area and I got to see everything under the sun...every asset class, urban/suburban locations, land valuation, government contract work, ground leases, sandwich leaseholds, STNL, condo conversions, etc.
People I knew from college who were on the buyside would constantly shit on it, but I learned a ton and comp ramped up quickly once I started getting paid for production. I knew it was never a long-term career, but I still use those skills every single day in my acquisitions role. There is a lot of overlap in the work...IC memos are basically watered-down versions of a self-contained appraisal report with return metrics added.
Off topic, but I still think back on some of the funny shit you see in the middle market: hand written financials for a 24 unit multifamily deal, a tenant's walk-in closet turned into a mini sex dungeon, and falsified RE tax statements (out of anything to lie about, why make it something that is so easy to find?).
The bodega in the hood that was abandoned and being used as a crack house takes the cake though. The bodega tenant abandoned the space in the middle of the night, but left ALL the food, cigarettes, etc. Owner didn't go in there for a year and shockingly, never had it cleaned after he learned of the condition. Crack heads and mice took over in the interim. I will never forget the smell in the kitchen...they had left all the deli meats and cheeses to rot that entire time, with no refrigeration of any sort. Owner was seeking a $600k loan with bogus rent roll/financials.
On the flip side, also saw some awesome stuff that gave me perspective, like the guy I met who owned over $250M of RE but was completely under the radar. He was a produce wholesaler who started buying deals in the 90's and amassed a large multifamily/industrial portfolio in the Bronx & northern Manhattan. Eventually started a management company to handle everything and is now sitting back and clipping a fat yield with the least "prestigious" properties you could imagine. Showed up to the tour in a 10-year old Camry and was as unassuming as it gets. Zero real estate experience prior to buying his deals, but by the time I met him you could tell he knew his shit cold. Changed my perspective about what kind of path you have to take to build real wealth.
Specializing. Knowing an asset's strengths and weaknesses, better than at the generalist level can be helpful in understanding how a deal actually pans out because each asset class operates so differently and the leases are also structured so differently in the way you're looking at them. Office will have longer term leases and follow a different set of due diligence that multifamily follows, and what factors drive up rent can be totally different between the two.
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