Is anybody just going to leave the industry?
When I graduated more than a decade ago, everything was normal. Sufficient transactions, value add made sense and everything just felt right. Then Covid screwed everything up and now it seems like even the most aggressive shops cant make anything work. The only developments I know are related to those that have held the land for awhile or are family office money with long horizon. Every deal is negative leverage couple that with rising operation costs and nothing makes sense. We look at off market stuff too but nothing truly makes sense there either. It was survive until 2023, survive until 2024, 2025, 2026, and now we pushing to 2028. Also hitting that point where your married with kids and all of that and you need to move on with your life. I love CRE more than anything, but I think the mental toll of not being able to get anything done is hitting me. Im tired of trying to compete with 1031 buyers, family offices, or just downright crazy sellers that have no intention of selling because they themselves have nothing to buy once they sell. Maybe its just me and my bad luck and all of you are crushing it, but honestly it's tiring and Im not getting any younger.
You're not alone, buddy. I've also been in the industry for about 10 years now and nothing is like what it was prior to covid. There was that short honeymoon phase after covid, but i agree with you, its been this holding pattern that's been quoting "next year", and the same thing gets said when we enter that next year. Things will for sure bounce back but nobody knows truly when. there's too many factors shifting around and they're all making it harder to do deals. At this point, i am looking to leave, just because i want more steady income that isn't so heavily tied to the market anymore. this stagnant cycle has been far too long. I am keeping one foot in the door but i don't think i'll be back in real estate with it as a primary source of income though
is BiggerPockets to blame for where we are now?
guess who was part-owner of BiggerPockets?
Such a punchable face
I will be sticking around long term but have definitely had a go of it too.
I'm not sure I'll ever "leave" the industry, but I'm increasingly looking at it as just part of what I do as opposed to everything I do. (Which is ironic, given the user name.) I agree with you that waking up to spin your wheels in the mud is soul crushing.
My advice is to find a way to make money, whether that's within or outside of the industry, and then use it and the knowledge you've acquired to buy or build real estate for yourself.
Yes like for example making money with AI.
I’m graduating college this upcoming year and want to invest in real estate as a personal finance goal. I’m thinking about learning with an investment role in the space and doing it on the side once I’m competent.
If I should not enter the space as a job, how do you reccomend learning to invest in RE?
There are tons of books and youtube videos that will teach you, but the biggest point I want to make is to not start a career you don't actually care about. The "real estate" you learn in your first two years of the industry plugging numbers into models for a megacorp is not going to be applicable to you doing your own investments.
Chase a career you actually want.
Just wish my entire background wasn't CRE finance (bachelors degree included) because I would have been out two years ago. This is legit all I practically know.
I’ve considered it but not sure what I would go do instead. While we may have some transferable skills it seems hard to market those to people outside of CRE who don’t really know what we do. What other roles have you consider pivoting too?
I've been in multifamily for a decade, been in the real estate industry nearly 20. I don't know about other people but I just love real estate. My career was going very well until COVID. Now I've gone three years without doing a deal and the firm I was at (that I really loved) restructured and laid off 75% of workforce. I hopped to another zombie company for 10 months and now I have been out of work for 4 months at 43 years old. I honestly could not have imagined this in January 2020 (we had two deals under contract that we closed right as COVID hit - they ended up doing very well). I had been saving up money to start my own firm, but now I'm having to use some of that for living expenses, so currently trying to walk a tight rope.
Sorry to hear man. Been laid off with my past two firms and found footing again. But I wouldn't be surprised if I get a Friday meeting invite on my teams calendar with HR soon. We're not doing any transactions.
this industry is entertaining for sure. out of work for 4 months but the tone of his post is not that negative: "I just love real estate." people like this will make it work. they survive.
this post is a good insight into the downside of the oft-given advice of “getting really good at one niche”… you can’t pivot or at least you cannot pivot quickly. While multi is slow and kinda frozen.. Retail ripping. Industrial hasn’t slowed down. Office is seeing velocity, distress, uncertainty which creates opportunities. I hear the negativity from so many industry friends and it’s a bummer because i feel the opposite and wish like hell I had a lot of capital or carry rn. I feel it’s a great time to buy.
I’m not saying that the guys who perfected the 5 over 1 stick build who can control costs and can drop it anywhere in the US if downside case pencils were or are wrong either. There are legitimate pros to being good at one thing.
More just a commentary that there are also advantages to being diversified.
I agree with this completely, but it's challenging when capital wants "niche experts". Focus from operators is great if you are a capital allocator, but very risky with some hindsight if you are a GP. At the end of the day, if you are reasonably smart you can know enough about 2-3 different asset classes. Better to focus on a smaller geographic footprint and be diversified with that, than focus on one asset class. At least in my opinion. How many guys who only did office for 15-20 years woke up in March 2020 with their entire lives upended?
Yup and attracting outside capital is the “real” business for the operator, especially for the ones who run lean, put a small % in and bank fees. Not building a portfolio of multiple asset classes and constantly rotating AUM to what is attractive.
I’m not even one to say the “sole niche” crowd is wrong. Just something I’ve really noticed as someone who entered CRE in ‘20.
There is definitely a downside to being in one niche. Overall the problem isn't being able to pivot from a knowledge standpoint. I understand office/retail/industrial. But to pivot now isn't really feasible at my age, given real estate is a relationship business and all of my relationships with brokers/lenders cultivated over years are on the multifamily side and that is what employers are looking for - with a track record to prove it.
Also I just really like multifamily. I've always been drawn to it as you're dealing with where people live.
Yeah to clarify this is what I meant. I don’t think it’s a knowledge of “how-to” so much as the logistics and capital and existing relationships and so on that make it hard to pivot.
why is retail ripping? I've been hearing this anecdotally and just trying to figure out the main drivers of why retailers are doing so well? economy is that good?
The economy is actually very good but its interesting. People are spending lots of money traveling and eating out but they want the more expensive luxuries and not cheap out. Funny enough those same people are complaining about cost of living and boomers holding onto wealth. Im in that same age category. People want to stay at high end hotels, want nice cars, etc. and I know so many couples with HHIs over $350-400k. Theyre all going out, going to Europe, buying a BMW, extracurriculars/babysitters for their kids, etc.
Really really dumbing it down here but-
no one really built it for a long time. legitimate demand for the right brick and mortar space from retailers. Leases used to be chock full of concessions and the leverage has flipped to where they can make economic sense, even for the bigger boxes. (Some used to consider them to be loss leader and you made $$$ on inline).
Additionally- Cap rates have generally compressed from Covid when everyone ran scared of it (so willing sellers) but remain generally higher than industrial or multi so you can capture more in place yield than those assets while still having credit tenancy in place. In high pop growth metros with good demos (like Sun Belt) there’s enough of a “story” to UW rent growth on top. Put it together and you can make the numbers work, esp with office a no-go right now. Plus like I said, willing sellers.
Caveat is that i would not say this a hard and fast rule- certain markets, certain quality of assets are not seeing appreciation. I am a personally a tad skeptical of how hot it is but have a foot in the space and it is certainly seeing velocity in the right markets and for the high quality stuff.
this industry is just retarded sometimes. would not blame anyone for permanently getting out. contrast the idiotic ups and downs of real estate with Warren Buffett's definition of "what makes a good business" and you've got too many smart people working too hard and just not moving the needle substantially. i don't blame anyone for bailing.
Great comment. CRE = elite overproduction on steroids at this point.
I feel like an absolute asshat for saying this, but seeing posts like this are probably a good sign for the long-term health of the real estate industry. The bull run from 2010 to 2022 was so good that it pulled many many smart, talented people away from other industries into real estate. It also, of course, pulled in lots of less than scrupulous actors into the business as well. When capital was funneling into all manners of alts, there was enough there to feed all of the mouths in real estate. We no longer have that dynamic. There aren't enough opportunities for everyone that is in real estate to make a living right now. So we need people to leave. And that's not because they are quitters or not good enough, but there are a lot of smart and talented people in real estate that can leave and do something productive in a different industry. It's simple mean reversion and I think it's a good thing.
It is interesting for sure. I am one of the older people here as well and back when I started CRE had a small presence relatively speaking. It was as smaller % of AUM for most firms. In my graduating class in college, I believe only 2 people went into CRE out of hundreds. I remember going back annually for both recruiting interviews and just general alumni awareness and each passing year the % of those going into CRE was significant. Like shockling huge. I'd estimate to even say that 10% of the grads in the 2018-2019 classes were somehow going into CRE (lending, broker, Acq, dev). May have been even higher in 2021-2022 (stopped visiting after Covid). All I remember was when I graduated people didnt really think much of CRE and in some ways it was even looked down upon. Everyone else in my grad class went corporate finance, Big 4, PE/IB, etc. And I imagine we won't ever get back to the level CRE was at 15 years ago, but I certainly dont think we will get back to the 2021-2022 era either.
100% agree. Also, this is a long term industry - the whole point of real estate is not to make a fucking fortune on fees in the space of five years. That model, the sunbelt syndicator model, where you raise some money and spend indiscriminately and fee the hell out of every level of the deal, and then leave your investors high and dry... that is an anomaly. Real estate deal cycles are supposed to be like this. I get that for a 26 year old, waiting another couple years for things to normalize feels like a lifetime, but it isn't that long a time in the scheme of things. Anyway the money is supposed to come at the back end on the promote. And yeah, we're at a point right now where anyone selling out of an asset they bought 5-10 years ago is not making any money, given where we were and where we are.
Just a lot of entitlement from people on this site (and in general) who think that simply because they thought they'd make a lot of money really fast and be decamillionaires by 35, that if they aren't on track for that then they should bail out of the industry. The complete inability to see beyond their own personal experience probably doesn't bode well for their long term success, anyway.
I think a couple things can be true - you are absolutely right that this is a long-term industry and we really lost sight of that over the past decade. But if you are 25 and have been out of school for three years, and have never done a deal, that's probably not a lot of fun. Being laid off is not a lot of fun. Working off a commission or heavily bonused comp structure and not doing deals is not a lot of fun. I see a lot more of those sentiments on this site than bitterness about not being a multimillionaire (or entitlement). Real estate is a cyclical industry, and we are in a not very fun part of the cycle. I think it's okay for people to be frustrated about that.
I’m thinking of leaving and going to a multi strat family office that I have a good relationship with. Getting my CFA rn.
Mannnn - I joined post pandemic and I thought I was frustrated giving up prime professional years just exercising underwriting without actually closing deals. Feels like getting transactions across the finish line is the only thing that actually counts
If you are young enough, there is value in underwriting a lot of deals, even if you don't close them. You will understand returns and levers at an intuitive level that is very difficult to replicate for people that haven't had that experience.
I'm trying to build a presence in the niche fragrance industry. While it's every bit as challenging, I find it far more fulfilling and aligned with what I want to create long term.
At the same time, I genuinely believe real estate has been one of the most difficult industries to be in over the past three years, and in many respects, it continues to be today. Between rising interest rates, higher operating costs, insurance, construction costs, taxes, and overall market uncertainty, it's become an incredibly challenging business.
Not sure how people are making a living without PM income.....
Not sure if its you but someone else said this on this forum. But would love to get to know more about this is going. Not that I am going to do it, but just like to see how other industries are. I feel like fragrances are super competitive. Do you have a brand created? Hows the manufacturing/packaging? Are you web based? How are the sales going?
Haha, it's honestly one of the hardest things I've ever tried to build. There are definitely days where I want to pack it in.
The only reason I started it is because my family created a fragrance years ago that was only sold to our private clientele. It's a legacy fragrance, and I felt it deserved to be introduced to the world. That's really what motivated me.
Sales have been pretty subpar so far, and the competition is brutal. You're going up against billion-dollar companies that own multiple brands and have massive marketing budgets and distribution. Finding a niche and getting noticed is incredibly difficult.
Right now we're only selling online. It's very tough to get retailers to take a chance on a new brand with just one SKU, so we're focused on building the foundation first.
Ironically, even with all the challenges, it's become therapy from the real estate BS I deal with every day. Creating something from scratch has been really fulfilling.
Creating new fragrances, though... that's hard as hell for a whole different set of reasons. Happy to tell you all about it over coffee sometime....
Just had an offer rescinded cuz the higher ups decided there wasn't room in the budget :)
How long did you interview? Honestly stuff like this pisses me off, if they didnt have room in your budget, why did they even post the job to begin with
About a 2 month period. Idk something changed I guess, whatever
What options would y'all say are the best exit ops out of CRE (my background is doing acquisitions/some asset management at a small family office focused on RE and acquisitions at a mid sized affordable developer)?
Go on get!
lol i'm trying
I get it. I too have had these thoughts before. Maybe corporate real estate. Sometimes I wanna ball. Sometimes I wanna just do nothing with my family.
Currently at a London based shop doing acquisitions and understand the feeling - very hard to make deals work at the moment. It’s also a really tough fundraising environment.
I’m doing an MBA part time but want to stay in CRE, though that will hopefully give options. If you went to a uni in the global top 100 Hong Kong have a scheme called the top talent pass scheme that gets you a 3 year visa without the need of having an employment offer. Seriously considering that once I’ve done this MBA if things stay the same and job market doesn’t improve.
As others have mentioned, the space is just too crowded given the amount of entrants to the space (on the career front) in the past decade that were only supported by amazing capital conditions (falling rates, undersupply of housing, etc.) which have now all corrected. The space definitely needs folks to leave and if you don't love the space to your core then honestly you might want to be one of them. There is a very real chance that it will be decade(s) before conditions are that hot again. While today's market is terrible, even a normal market can't support the amount of people currently in the industry.
I think the problem is mostly everyone loves the industry and everyone is waiting for others to leave.
I actually don't think that's the case. I think there are a lot of folks who got into the industry for promises of big upside with better work life balance, a more interesting path, or simply as an alternative because they didn't get into banking rather than for the true love of the game. When the market was hot, it looked to some like a career path gem compared to alternatives
The problem is that there is nowhere else to go. Where do you go if you’ve been in RE for 10+ years and make a decent income? I don’t think it’s that easy (especially now) to switch industries. I like RE but don’t love it, so I’m one of those who would be open to a career change but based on what I’ve been seeing out there, it’s unfortunately just easier to stay put. It seems that most jobs these days are looking for candidates with near identical experience to the role they are hiring for, making it very difficult and costly to try something new.
I know multiple people who have acquired small businesses with their savings + an SBA loan. You’re effectively buying a job, but you can find businesses doing over $1mm in EBITDA that you can own outright. It’s a lot of risk, but I would say the “talent” in the SMB space is weak in comparison to people in high finance. I’m currently trying this but haven’t found anything I love yet
Is this how Tony Soprano felt when he said "I'm getting the feeling that I came in at the end. The best is over."
Ya know, Quasimodo predicted all this...
time to pivot careers and become interior decorators
nah my clients are here with me for life
#lifetimeclients
#rainmaker
Worth zooming out: over a 10-year cycle, how many years should realistically be spent aggressively buying? Probably fewer than people assume — most of the cycle is asset management and selective buying, with stretches where the right call is not buying at all.
Right now, special servicers, workout pros, and asset managers are the ones having strong years. Thats just where we are in the cycle.
I’d push back gently on the idea that this is a bad time to be in the industry. Real estate has always been cyclical, and the investors who do well long-term are the ones who can flex across the cycle — not just acquisitions when it’s easy. Might be worth reframing this less as “bad time to buy” and more as “different phase, different skill set.”
Wise words, but sucks for people focused on buying.
Exactly this. Sometimes not doing anything is the best thing you can do.
Target Investment Banking Club President
I left and make the most out of all my CRE analyst class peers.
what do you do now?
Real Assets
At this point I feel like I'm being forced out so many leads that end up as dead ends fml
yesterday, i said i was staying forever but my client decided to stay forever instead...
rain rain maker
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