How do you feel about the current state of CRE?
Through the past few months after deciding I wanted to start my career in CRE, I've spoken with people in the industry and read a lot of insight on this forum, and it seems like every one loves what they do and have a positive outlook on the CRE business. However, yesterday my dad ran into someone he knows at lunch that is in the business, I believe an Executive VP at one of the Big 3, southern state in a large city. From what my dad told me, it seemed like he didn't have much good to say and said something among the lines of "it isn't what it used to be." I plan on reaching out to this guy to network with eventually so I might bring it up then (unless that's a bad idea), but what is yalls take on the current state of CRE? Is it not what it used to be or headed in a bad place?
Not even sure what, “it used to be.” The industry used to be more localized, more fragmented, and more inefficient. Because of that, there were large returns for individuals with information asymmetries. Now, the industry is more global and more efficient. The internet allows people to have access to larger amounts of information and globalization allows more global capital to move into risk assets such as real estate. However, while it’s different, the industry is growing and becoming more institutionalized. Additionally, it’s still a great industry to make a boat load of money if your entrepreneurial, can raise capital, and can source good deals.
The dude that's been saying this is probably upset that things have gotten a lot more 'sophisticated'/'technical' in the last 10+ years. It used to be that you could be a local-yokle type person at a firm and eke out a good living just pounding the pavement/phones and digging up off-market deals from meeting some random dude in a bar. The days of that are largely gone especially in Office, Industrial and Retail. It happens still to a certain extent in all of these and to a greater extent in multifamily, but for the most part, the business is trending more towards a structure like IB/PE where you have a substantial share of the available product owned by an ever shrinking handful of institutions/firms due to aggregation, buyouts, globalization, etc. So my guess is that guys like the one you mentioned get cranky with this because in order to keep up they'd have to significantly step up their game on the technical side of things, which is very difficult to do.