Help Needed - got a new offer
Hello,
I've recently received an offer from a small REIT. Given the team is small, this role will be covering basically everything - UW, AM, due diligence, reporting, etc.
The comp isn't ideal - about 20k less than my current role. I am currently working in Big4 valuation. I have been actively looking for quite some time. I've realized how hard it is to transition from valuation to a buyside front office role.
Part of me wants to take this offer - it is still a buyside front-office ish role. Part of me wants to keep looking - maybe I will be able to get into a more prestigious/bigger REPE (I've had a few final rounds for different buyside front office openings; however, this is my first offer).
Please let me know your opinions/recommendations.
Thank you!
First of all - how do you like Big 4 valuation? (Possibler career path for me, I'm a college student)
If you can't negotiate your salary, my advice is to do what makes you happy. If 20k really doesn't mean much to you each year, and this new role will make you happier I would do it.
Similar to audit - I don't think it adds any value. It will becomea "sales" job as you prgoress
What are you planning for yourself career-wise and how long have you been at the big 4? $20k less seems pretty steep considering that big 4 doesn't typically pay well already. Would that not set you back financially?
What property type and markets does the REIT focus on?
I think I am good enough to get into a reputable REPE. I've landed final rounds with legit firms, but nothing converted prior to this offer.
I have several years of experiences. I just feel that the longer you stay in Big4, the harder it takes to get. This is why I am in a semi-desperate mind set.
Do you know why those other offers didn't come through?
You could take the gig, but does it fit with what you want to do long-term or a good starting job in RE? If it doesn't work out (meaning a property type, market, or individual role you don't like) are you willing to stick it out a year for the lower pay?
How long have you been in the Big 4 Valuation role?
Experience trumps everything. I don't know where you are located, but I feel like there are less acquisitions jobs than a year ago. Worst case scenario is you work here for a year and network, and take another job a year or two later.
I would be curious to know the percentage hit you are taking on salary and if the REIT offer is market for your experience level. I think you you are right to assume the PERE shops are going to be a better experience, especially if the REIT is not a public REIT. I just left a non-traded retail capital REIT and it was not a real estate company as much as it was a fee collecting company. I would weigh the firms investor base heavily in my mind, is it institutional capital or retail. that is the major difference for me. If you are in the Texas market I can try to help you out more....
Could you please tell me a little bit more about your prior experience? Mine is a non-traded REIT funded from retail sources as well...
20K is about 10~15%
on a percentage basis, that is not a bad hit. Based on my understanding, the non traded REIT space is a dying industry. Blackstone has decided they want to enter retail capital and they are coming in a big way, from what I have heard they account for 70%+ of retail capital raised. Blackstone can do this because they are giving investors what they want, opportunities for liquidity events. Some of the investors in the REIT I left died before they got there money back, I will let that sink in. For the non-traded REIT, the REIT will either need to create a liquidity event to let shareholders redeem, go public, or liquidate through a portfolio level buyout. If the CEO wants to collect fees forever, the investors are at the CEO's mercy. Our cost of capital was 12%+ we had to pay the financial planner an upfront fee to push our product (mis aligned incentives for the retail capital) and then we had to have fundraising in house to push our product to the financial planners. Public REITs just issue equity, and they can do it when their equity is trading at a premium to NAV. The public REIT can also arbitrage the public private differential to add value. Any investor who would choose a non-traded REIT over the other options within the real estate investment landscape is being taken advantage of. For me personally, the non traded REIT space cannot die fast enough, more than anyone else, the retail investor needs honest financial advice, and they are not getting it.
EDIT: Sorry, I let some passion through. The firm your looking at could be working hard for the retail investor, but at the same time, the costs of raising capital for any non traded REIT will make them less competitive in the long run. Unless your firm is working hard to go public, I would say it is just trying to take advantage of the retail investor as long as it can. Also, when you are working with "ignorant" capital, it will never cause you enough pain to really need to work for it and create a powerful, effective organization. institutional capital is on your ass everyday.
EDIT II: all that being said. I worked for a non traded REIT for one year and now I am about to start at a dream job in REPE tomorrow. Already some of the projects I have started working on are so interesting, it seems to be a very different game. But, if you really want to get into real estate, you might take the job and learn a lot to get to where you want to be.
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