In hindsight, what type of role would you have STARTED OUT in?

As a senior in college, I'm hoping to be narrowing in on a position by the time I graduate in May. I've been doing a lot of networking, and my focus has been on firms with great reputations in my target market... really just trying to meet and speak with the smartest and most successful people I can. I'm finding that I can't seem to find a specific role(s) that I want to pursue.

I think that brokerage could be a really exciting opportunity and I love interacting with people, but as a Math/CompSci major I also enjoy more analytical type assignments and could see myself in a role that would involve more modeling exposure, etc. I also feel like building those modeling skills would be huge for increasing exit opps, but those roles seem fewer and farther between.

So my question to you guys is this... given the chance to do it over again (within CRE), where would you have started out in the industry? I know that real estate is a massive industry and ultimately each starting point is probably better for a particular end goal, but humor me.

 
Best Response

Started in brokerage (ended up in development) and wouldn't do it differently, IMO. Brokerage hammers home some really important ways of thinking, including a) how to sell/present effectively (applies to tenant presentations, investor relations, pitching a deal to a lender) b) what tenants actually want and care about, c) being able to identify and call bullshit on information provided by brokers and other sources. In my experience a lot of guys who started in acquisitions are great underwriters but don't understand well enough how options affect value, how a broker's assumptions may be misinformed, how to sell/position a competitive set to get a deal approved by IC, etc. Conversely, a lot of development guys get too stuck in the weeds on issues that tenants could not care less about, like the type of elevator jamb or restroom light fixture.

Most importantly--working on commission completely drills down on the concept of defining how much your time is worth per hour. This can help you avoid chasing bad deals, focusing on petty details, etc.

 

Started in brokerage as well. Great place to start but have a game-plan to get out. It's easy to get locked in because there's always another fee around the corner. "Oh, I'll leave just after this next one closes" then in the meantime you list another big deal...

One other thing IS brokerage does for you is help you keep the end buyer in mind. If you build a 30 unit apartment building in Western Massachusetts and underwrite it to a 5.5cap exit because that's what 200 new units have sold for you'll get hurt because there aren't institutional buyers for such a small product. I see new developers doing that nonsense all the time and then they're stuck with a small project that they don't want to manage for the long term.

But another way that's great to learn is as a development associate at a small shop that has good deal flow. Tough to find and you need to network into these opportunities but you'll learn the most and really learn all aspects of the business quickly.

 

I started in market analysis, then brokerage, then went to operations/management, then acquisitions, then development and I hope to end up in development after I graduate my masters program.

I'm 29 and $100,000 in debt as a result of my meandering path, when, if I knew then what I know now, I probably could have made it to development if not right out of the gate, but a year after.

My advice? Don't worry about your first job as much, but spend that year figuring out what in the industry you want to do and then do it as soon as possible. Otherwise you'll wake up at almost 30 and be where you should have been 7 years ago.

Commercial Real Estate Developer
 

I'm likely one of the older guys on this board so I've had a number of real estate jobs (including development) and been through a couple cycles. My take after 25 years is that the most critical thing you have to understand if you're going to be successful in any part of the real estate industry is EQUITY -- who has it, where to find it, how to attract it, what it expects, how to structure it, how much control you give it, etc. Everything else on a deal falls into place easier when the equity equation is solved. That said, I think it would have been very valuable to have been a production analyst on a capital markets team, especially a bigger shop like a CRBE, Eastdil, JLL, HFF, etc. where you get to look at a ton of deals in different areas of the country, understand the deal rationale, the structure of the capital stack, etc. Not only would the exposure to different asset classes, a variety of sponsors and geography be helpful but you might also get the opportunity to participate in deals as an investor as well. I know several successful local sponsors who invite "friends and family" into deals for as little as $25k.

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