How to prep for RE?

sfisher2_:

- May be an incredibly stupid question, but what does a REPE firm (say Blackstone) do that differentiates itself from say a development firm (like Tishman) that also seems to buy property, upgrade it, and then try and find a tenant or flip it. I'm sorry for such a stupid question, but I'm a bit confused on that. Is development part of REPE? I'm sorry for how stupid of a question this is.

Not a stupid question. Something to get your head around is the lack of importance of some classifications and the importance of others when it comes to real estate. A real estate private equity company is a company that raises funds to invest in real estate. A development company is one that builds real estate. The thing is, within these two "classifications" there are distinctions, sub-classifications, exceptions, etc. and a lot of big companies especially do a little bit of everything.

Typically, within these monster companies, there are Acquisitions teams, Development teams, Finance teams, Asset Management teams, Construction and Pre-Construction teams, and maybe even Operations and Leasing teams. Sometimes these teams are further broken down by asset class, location, or any other factor. Sometimes they are combined, such as Finance and Asset Management, or Asset Management and Operations, or Finance and Acquisitions, or Operations and Leasing. There are REPE firms that dabble in development. There are developers who take a more value-add redevelopment strategy in certain markets cycles. There are a whole list of options and strategies and corporate makeups.

What's more important for you, and there's no way for you to know yet, is what you want your specific role to be. Acquisitions people buy land, property, and/or portfolios. Development teams "quarterback" the development process. Construction teams build properties. Asset Management teams maximize profitability of assets. Finance teams raise debt and equity. Operations manages the property day to day. Leasing leases the property. These are the main distinctions.

sfisher2_:

- It seems from what I've seen the hours in RE are much easier than IBD. Is pay comparable?

Yes and no. Real estate is just far less structured. Whereas in IB everyone at the lower levels more or less makes the same, works the same hours, etc. in real estate you can work 9-5 or if you're with a Blackstone or a Carlyle or a Related, you might be working IB hours. You might start at $45k a year with a $5k bonus or you might start at $125k. Your career progression won't be the same as all your friends in the industry or people you know in IB, you might start out making less that your in-industry friends and/or IB friends but end up making more...or not. It's pretty difficult to say because of the variety involved.

sfisher2_:

- What would be the equivalent of an IB analyst at firms like these?

Also an Analyst. Again though, it could be a highly structured IB-like environment or it could be just what they call an entry level job. It could pay well. It might not. It could last two years and then you're expected to leave. It could last 6 months before you're promoted. It could last 5 years.

sfisher2_:

- It seems of all the big finance sectors, RE can be the most affected by economic cycles? While it seems brokers are the first to get culled (correct me if I'm wrong), is it the same on the side that deals with development and acquisitions?

Eh, yes and no. This might be a bit of you having just lived through it. RE is certainly most affected by real estate crashes...

sfisher2_:

- Would it be smart to try and land an unpaid internship next summer (2017) at a development or investment firm (big or small or boutique whatever I can find) for experience?

Yes. The biggest thing about real estate people is looking at your resume and seeing real estate experience/knowledge. Join the Urban Land Institute (student rates are cheap), attend some events, read all the free material, and use the member database to find tons of email addresses for you to email.