My past experience has been in commercial brokerage at one of the top shops in a top 5 national market. I put in a few years but never really enjoyed the work I was doing. I recently fell into a nice gig working at a REPE, the REPE was actually a former client of the brokerage firm I was at and that is how I got the job. I honestly don't have a ton of knowledge of who the big players are in this industry and don't know how my firm stacks up against the competition. I have only been here 3 weeks but I do have to say that being on this side of the deal as opposed to the brokerage side is light years better, I got very lucky to be in this position but so far so good.
A little about my company. We currently own 15 class A/B office buildings along the east coast, all in big urban markets. The portfolio is probably valued around $750mm and there are only 9 employees in the whole firm, the owner of the firm has big family money, I'm not sure how much debt is on these properties but the firms strategy is to purchase assets in cash then refi them once we increase occupancy or complete value add projects.
The firm is still looking to buy more assets and by the end of 2015 we will likely have close to $1 billion AUM. With only 9 employees at this company I can't imagine us being one of the larger firms in the industry but would this classify as a mid market shop or are we small potatoes?
small olives
There's a fine line between what some would consider "private equity" and what others would consider "institutional investment". I work for a similar company (we have $1 billion AUM; old money family), but I don't think technically we'd be considered a "private equity" company in common vernacular, largely because we don't serve outside investors. We invest private equity; that equity just happens to be our own.
Does your firm have outside investors it invests on behalf of? If not, I'd say you work for a very large family real estate investor. If you serve outside investors, you'd be working for a small REPE firm.
To my knowledge there aren't any other investors aside from the principal so I guess my definition of private equity was mistaken.
This x 100.
Not that there's anything wrong with working for an old rich guy. Pretty good gig.
$1bn portfolio is pretty small and without outside investors probably not considered "institutional REPE".
Also, within the states, it is uncommon to buy A/B office in big markets with no debt even if there is hair on the deal. Finding any real yield un-levered is tough in that asset class. I would imagine at least 40-50% of the portfolio has some form of financing (obviously generalizing but just an observation)
Would you consider life firms with a real estate investment management arm, repe? There is a life firm in the South that is hiring for an acquisitions associate position. Its fairly small and has $1b in legacy investments. I dont know what its real estate strategy going forward for 2015 but is this a good opportunity?
If they have outside investors who invest into their funds then yes, in the "common vernacular" that would be considered REPE. If they are managing real estate investments for their life insurance company insurance funds then they are just a real estate investor. Nothing wrong with that. You no doubt gain almost the same skill set as those working in a REPE fund. But REPE is fundamentally about taking outside investors' money and investing it on their behalf. I would think most REPE funds would have fundamentally different investment strategies than a life insurance company, but you'd gain transferrable skills working for the life insurance company.
REPE gets thrown around way too much, in general if you aren't using a lot of other peoples money, that someone had to go out and raise, in a closed investment fund then its not REPE.
As an independent broker in San Diego looking for an acquisition gig at various REITS and whatnot around SoCal, you're probably doing well with regard to quality of life and upward movement. With so few employees my guess is they don't do any of their own leasing or management. As things expand they may take over some of that.
I'm looking for something like what you have for many reasons. One is to receive equity as a form of compensation. A firm here in SD instead of 401k matching are offering equity.
Small in assets? Compared to who, what? A broker would love to have you guys as a client. Not bad at all for "family" money.
Acumen can you elaborate more on how you made the jump from Brokerage to REPE? This is something I have thought about a lot of lately and seems like some are able to make the jump when they want to.
It was more of a relationship hire than anything else. I was a broker at a brokerage firm and helped out my current firm on a few transactions. I built up a relationship with some of the decision makers at this company and told them that I was considering making a move and what I was looking for. This could have backfired if I didn't get offered a job and word somehow got back to my old firm but luckily that didn't happen. I went on one formalish interview and was offered a position the following day. I can't imagine most people get hired this way but the new firm trusted me and saw first hand how I work so that was probably enough to prove to them how I work and that I was worth the risk.
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