HELP! CRE Lending Underwriting vs. Origination
Both options are for the same middle market commercial bank within CRE lending. Based in Midwest, low CoL city.
Option 1: - Portfolio management and underwriting, focusing on institutional clients (i.e. Carlyle, Brookfield, etc.) - Underwriting new deals, annual reviews, risk ratings, internal credit memos, further due diligence, Argus modeling - Direct supervisor is located in another state
Option 2: - Origination, 2-year rotational analyst program. Rotates you through 4 different groups every 6 months (institutional clients, Agency, LIHTC/tax credits, etc.). Goal is to have you be a junior relationship manager in 1 of those groups at the end of the 2 years and own your own book of clients - Works with relationship managers for initial screening and analysis. Will get some underwriting experience to some extent as well. - Direct supervisor is in the same office and thus will get more facetime - Drawback is that this is a brand new role and I would essentially be a guinea pig for how they build this out
Assume base salary is the same ~$75K with 10% bonus for both, but option 2 has an additional bonus based on revenue growth.
What should I pick? My near-term goal is B-school in 2-3 years (currently have 1 year of experience) and then potentially pivot into real estate asset management at a BB post-MBA. Which one positions me best for that next move? Option 2 seems appealing since it will give me a lot of exposure to different groups, but I think option 1 will allow me to focus an area of expertise and own deliverables all the way through since I wouldn't be rotating.
From my perspective, Option 2 all the way.
I can't speak to business school, BB firm, or RE AM, but I can speak to it from a professional standpoint you'll have more fun in Option 2, learn more, and be more marketable.
I added a note that Option 2 is actually a brand new role... I would essentially be a guinea pig for how they build out the position. Given that in mind, do you still think it would be better even though Option 1 is much more established? At the end of 2 years, how marketable would I be since I'll be rotating every 6 months and not fully being immersed in one team as I would in Option 1?
Option 2. You will have direct exposure to influencing the onbaoridng of new business. Origination generates the revenue, not the underwriting.
Is it considered more 'sexier' to be on the origination side? Option 1 will include underwriting new deals, but really more so once they get past the initial screening process.
Option 2 - never look back
Saw that you are an analyst in CRE! I added a comment above about how Option 2 is actually a completely new role to the bank. Does that change your opinion at all? I get that Option 2 will give me more exposure, but I feel like it might be hard to own anything in my time there since I'll be moving every 6 months vs. owning the underwriting in Option 1.
Owning the underwriting is great, but your just an analyst in an office. Go get in front of clients and solve their problems. Own the SOLUTION thst youre providing to the clients. Let the analysts own the underwriting which clients really dont care about.
If its a new role; you can make it whatever you want it to be since there are no prior expectstions for you. Go in there and impress them. If you are stepping into the underwriting job and try to do things differently youre going to get some degree of resistance.
But honestly; its your career. It sounds like you really want to go do the underwriting. If thats what gets your blood pumping; go do it like a bawse.
Old guy here - I would heavily consider Option #1.
Where are we in the cycle? Are there fewer real estate owners and transactions than 2-3 years ago. (E.g. CRE is getting more and more institutionalized)? As a sub 25-year old how much value are you really adding to the client. Maybe you make the call and get a senior lender to handle the transaction..maybe.
You will learn infinitely more in the first role, and this will help you 3-5 years down the line. And especially since the pay is the same, your risk of losing your job or being laid off is much less. SO from a risk return standpoint, I would also take Option #1.
Following
#2 definitely. Get in front of clients, learn how they think about assets, and make friends with their junior employees. You will see more deals on the originations side in any environment - underwriting will only see a fraction of those deals
I would suggest number 1 which may be biased because I am in a very similar role. You can jump to originations after 2 years or B-School. I am an underwriter and the best RMs who those who understand how to underwrite. The RMs who don't have technical skills can be harder to work with and will get too involved in order to close a deal. Asset management sucks but you do learn a lot learning small things such as the actual definition of "NOI" or "LTV" is.
Since your long term goal is AM, underwriters talk to AMs all the time in order to receive updates on RRs, financials, renos, etc.
Are you an introvert? Option #1. Are you an extrovert? Option #2.
Dicta velit dolore rerum sint. Atque repellat et molestiae quis. Cumque nostrum saepe alias omnis et neque consectetur aut. Facere sapiente facere porro animi a. Voluptatem qui molestias sunt enim at consequatur illo quidem.
Nesciunt ut aliquid velit quos corrupti similique et. Et quae fuga velit perspiciatis quisquam minus quibusdam. Quasi voluptatem enim vel aut beatae odio. Omnis atque facere eligendi aspernatur voluptate et.
Dolore dolorem quos hic non eligendi ab accusantium. Et vel totam ut ex voluptates dolores quaerat quasi. Alias sint quis non id consequuntur et.
Sed voluptas vel repellendus asperiores aut. Mollitia dolore veritatis repudiandae. Ipsam ut aut omnis nihil.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...