Interview for debt, but interested in REPE. Still interview?
Question for everyone here. I am currently in development and am looking to transition to REPE. I got an interview for a solid shop , but it is on the debt side. I don’t see myself transitioning over to debt. Should I schedule the interview and tell the team I’m actually interested in equity or just email back HR and let them know I’m not interested in debt, but would like to stay in touch for equity roles. If I take the interview, I imagine the team interviewing me would be somewhat pissed as to why I’m wasting there time. On the other hand, it could be a good chance to network with them should an equity role come up.
Don't interview if you have 0 interest, just tell HR that you are looking for an equity role and to keep you in mind if one comes up.
Never hurts to interview in this industry. You can always learn and make a connection.
Do you have some open mind on this position? If so, doing the first round (or even just screening round) is probably fair, just ask a lot of questions to see if you have any interest. Beyond that, you should be very honest with them if you have no further interest in the role. You can easily say "after learning more, this is not the type of position I am seeking at this time". If you are already 100% sure you don't want the role, just decline, but it's fair on both sides to investigate some before pre-judging it.
Tldr; interview because it’s good practice. You might not even get the offer so it’s worth the process, unless you can’t be bothered doing the rounds in your spare time. You can always remove yourself from the process if you get far along.
My path was acquisition intern -> re debt analyst -> acquisitions analyst. I was working on senior secured loans which has to be one of the most boring cookie cutter loan types but since we had such strong collateral covenants, we always underwrote what RE returns the borrower was expecting. It meant that when I wanted to jump from debt to equity, I understand the process. In my interviews they liked the fact that I had a process to make it to equities and tried learning what I could from the position I was at. Most REPE funds invest in the stack as passive investors so it won't be a waste of your time. That being said, if you’re in development, I’ve seen the development to acquisitions move countless times. I would hold out. But I’ve also seen amongst friends internal laterals from debt to equity.
You realize "senior secured" is just the most senior piece of debt and that, yes maybe if you are underwriting permanent financing it can get vanilla, but a value add deal is much more complicated. And yes, you are correct your exposure to highly structed loan covenants is a major learning perk of being on the debt side, but it is all just real estate at the end of the day. I'd take a guy with more experience but in debt than in equity/acq with less experience any day.
I think we are saying roughly the same thing here. He's currently working in development so his experience will be the same regardless of switching to debt or equity. Unless he is on a fixed contract. Both development and debt have track records of switching to acquisitions. So I agree, experience first. And to the point of my own experience, yes? Senior secured is what we marketed to brokers because it tells you that it’s the senior stack and collateralised. I didn’t get to do the fun stuff like value add, distressed refinance, or mezz/junior stacks :/
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