Is CRE Okay?

Been seeing several posts on the IB and PE boards about people feeling fed up and struggling with their mental health. Burnout seems super pervasive right now, so I thought I'd ask my CRE comrades this -- are you okay? How are you doing?

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Comments (36)

  • VP in RE - Comm
Dec 6, 2021 - 2:53pm

Meaninful post bud - I've experienced some personal traumas in the past and had to get professional help to cope with it in order to power through my day job grind. All is good now, but I feel for anyone who is having to deal with their mental health.

It gets tough at times but I'm wishing everyone out there the best. Folks in our industry can sometimes be way too competitive/ambitious and always looking over their shoulders to their friends and colleagues to compare themselves against. That could be detrimental to our mental health. Be happy with what you have and be positive about life outlooks. Stay strong folks. 

  • Assist. VP in RE - Comm
Dec 6, 2021 - 4:32pm

I'm just bored, my dude. From a career perspective I can confidently say that I am operating in a state of burnout. I've been underwriting for about six years now, and I cannot imagine a more mind-numbingly dull career path. With every passing day I wonder if I should just quit and pursue some entrepreneurial venture. The shift to being back in the office after working 100% remote has only made it worse and my overall quality of life has gone downhill. However, I am optimistic for my future and I'm aggressively working on saving/investing my way out of the daily 9-5 corporate grind.

The thing is, my hours and pay are pretty good. But once you get to a certain point these things do not compensate for the feeling that life is passing you by. 

Outside of work, my life is good. If only everyday was Saturday. 

  • VP in RE - Comm
Dec 6, 2021 - 5:24pm

I'm in a similar spot career wise. I do feel that after 5-7 years in, your job becomes a political campaign more so than it is about your ability to do the job. None of the old blokes want to share their cake, and trying to get a piece of it requires you to act like a politician just try and be a part of the group.

I used to have a passion for the RE itself, but after a few years, all that stuff are learnt and become pretty mundane. But it is all really hard to walk away with the prospect of getting into the carry/promote circle. 

Dec 6, 2021 - 6:03pm
Ozymandia, what's your opinion? Comment below:

Go be an entrepreneur and open your own shop!

Those old blokes spent their career waiting to own the pie, too... why are they giving it to you now, after waiting so long?  Moreover, are you willing to take on risk in order to get the reward?

I'm always amused by CRE professionals who moan about not getting carry, or it being too small.  You're in the industry!  You should know it's one of the few that rewards risk in an appropriate manner - you don't get something for nothing.  And yet every person with 5 years under their belt thinks they should be getting a couple hundred bps, without thinking of how many other people are in their exact same position.  Ten or fifteen people in that situation and all of a sudden, your principals are giving up most of their carry while maintaining all the risk!

  • VP in RE - Comm
Dec 7, 2021 - 1:21pm

The issue of entrepreneurial thinking in the RE industry is, it's becoming harder and harder to "own your own shop". The industry is consolidating so fast at the top, big firms are raising more and more money and the middle market is quickly disappearing. How are we going to have our own shops and compete on any deals when these large firms equity sources are so efficient, so cheap and their horsepower to quickly underwrite/close deals is only ever increasing?

When I got into the industry 10 years ago, I had the naive thinking of, oh I'm going to go out there and do my own deals one day. I'm still thinking that way, but I'm going to have to be doing my own deals on my own dimes (lucky that my family have a little of money). The days when you open up your own shop and raise institutional capital is pretty much over. You going to need some very special angle to do this (black/female/diversity ownership, or if you're some big shot with 25 years experience at a large firm spinning off [then to your point, why would some old bloke in his/her 50s risk that cake they waited their whole life to leave and start from scratch?], or investing in some strange asset classes like data storage or obscure things that the institutional guys don't do)

I don't mean to sound negative and "moan", but this is reality, and sometimes reality sucks. Not that my compensation is horrible in anyway. I'm perfectly comfortable being in my early 30s making twice that of a doctor while having a good work-life balance. But it's all about the validation of your work, and being in the promote circle is that validation, for a lot of young ambitious RE people like myself. Not getting it "sucks".

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Dec 7, 2021 - 2:43pm
Ozymandia, what's your opinion? Comment below:

The issue of entrepreneurial thinking in the RE industry is, it's becoming harder and harder to "own your own shop". The industry is consolidating so fast at the top, big firms are raising more and more money and the middle market is quickly disappearing. How are we going to have our own shops and compete on any deals when these large firms equity sources are so efficient, so cheap and their horsepower to quickly underwrite/close deals is only ever increasing?

Because you were never able to compete with the big shops.  I mean, you're out of your mind if you think your first deal, or one of your first ten deals, is a mid 9 figure transaction.  You start small.  And the KKRs and Blackstones of the world - they don't give a flying fuck about the $25mm MF deal in NJ, or the $15mm development deal in Baltimore.  I've said this before and I'll say it again - what you regret/resent is that all the ways that people have made easy money, are no longer doable. If you sent me back ten years in time with $1mm in cash, I'd make a fortune buying self storage.  Or buying Section 8.

So yeah, your right, large firms can close quickly and their money is cheap so they can outbid the market.  But they also have to focus on large deals, because their money is cheap because there is so much of it.  So no, I may not have a snowball's chance in hell of buying that 5,000 unit portfolio in the Mountain West - but I have a really good shot at buying a 50 unit building. 

When I got into the industry 10 years ago, I had the naive thinking of, oh I'm going to go out there and do my own deals one day. I'm still thinking that way, but I'm going to have to be doing my own deals on my own dimes (lucky that my family have a little of money). The days when you open up your own shop and raise institutional capital is pretty much over. You going to need some very special angle to do this (black/female/diversity ownership, or if you're some big shot with 25 years experience at a large firm spinning off [then to your point, why would some old bloke in his/her 50s risk that cake they waited their whole life to leave and start from scratch?], or investing in some strange asset classes like data storage or obscure things that the institutional guys don't do)

So your complaint is that no one is going to hand you cheap money to go buy the same deals and pursue the same strategy that 500 other shops are doing?  My heart bleeds for you.  That was never the case, not ten years ago and not forty years ago.  This has always been true, of every real estate entrepreneur who went out on their own.  They all needed a hook, or an angle.  You just don't understand that because you don't understand survivorship bias.  

I don't mean to sound negative and "moan", but this is reality, and sometimes reality sucks. Not that my compensation is horrible in anyway. I'm perfectly comfortable being in my early 30s making twice that of a doctor while having a good work-life balance. But it's all about the validation of your work, and being in the promote circle is that validation, for a lot of young ambitious RE people like myself. Not getting it "sucks".

You are objectively wrong.  And it stems from a kind of self-centeredness which I doubt most of us even understand we have.  No one owes you anything!  Just because you work hard doesn't mean you deserve a piece of carry at a big shop.  Just because your smarter than anyone else doesn't mean that either.  You have to be exceptionally lucky to be brought in, without risk, to take huge upside.  To my earlier point, there are dozens of people like you for every possible pie out there.  Hard workers, smart people, value drivers - but not everyone gets to have 250 bps of carry in the fund.  Because if they did, the principals wouldn't have any for themselves, and they're the ones taking the risk.

You want carry, but you refuse to acknowledge that the people you want to give it to you were in the same boat as you 10 or 15 or 20 years ago.  Smart, hard working folks in their mid 30s or 40s, who took an enormous risk because they didn't want to wait another 15 years to get their tiny piece of the existing pie.  Imagine going out on your own in 2009?  You'd think the world was collapsing.  Or in 2007, you'd think that there was no opportunity because prices were high.  There is always a reason not to take the plunge, and guess what?  Most people who do, won't succeed.  They'll make less than they would have grinding away for an entire career at a big shop, making their half a million bucks with no upside.  That's the nature of taking a "risk".  If it was easy everyone would do it.

There absolutely is just as much opportunity out there as there ever was.  If your skill set doesn't lend itself to that, say if all you do is buy large Class A MF portfolios for big funds and sit on them, then that sucks, but that isn't a problem with the market, it's a problem with you.  You're not going to be Jonathan Gray overnight.  I understand that when you're working on nine and ten figure transactions for someone else, it's hard to step down to seven and low eight figure deals, but that's life.

Dec 9, 2021 - 5:55pm
TheDebtStar, what's your opinion? Comment below:

I get your point, but also disagree. I spoke with a broker who reflected on the state of the multifamily market.

"5 years ago it was always the same several companies bidding on a property. Today most of the bids from companies we get we've never even heard of."

There's still plenty of money out there and more interest in real estate than ever in the past. There's plenty of bs firms out there doing deals by raising money from individuals who heard that real estate might be a good investment. 

  • Assist. VP in RE - Comm
Dec 7, 2021 - 11:31am

There is a middle ground that is preferable. Being too busy sucks, as does having nothing to do. I will say though that boredom does not mean not busy. It sucks when you have a lot to do, but none of what you are doing is interesting in the least. Sometimes the grass is actually greener! 

Dec 7, 2021 - 3:19pm
JerryOfTheDay, what's your opinion? Comment below:

I think there is a difference between being bored from lack of work and being bored from the actual work itself. In this case, it sounds like the latter. Underwriting deals for 6 years can definitely cause some burnout and cause you to take a step back and feel like you're doing different versions of the same thing over and over again. Honestly probably happens in most career fields, but I absolutely resonate.

  • 3
Dec 7, 2021 - 9:47pm
ThatGuyBalls, what's your opinion? Comment below:

Only exceptional individuals are brought under the tent. If you're complaining about not being under the tent on this forum instead of devising a scalable strategy that you can perfectly present to your chairpeople/committee then you're just not it.

Underwriting for x years doesn't get you there. Risking your career and your reputation does. Getting ultra creative and actually adding value does. 

Some people got it, some don't. The expectation that one coasts into carry/participation is so so wrong. Hard work doesn't do it. Smart work and the ability to really put yourself out there and potentially fail miserably in front of your peers does. 

Dec 7, 2021 - 11:01pm
Ozymandia, what's your opinion? Comment below:

Great response.  Folks on this forum seem to think the world owes them something, that having meaningful carry without the associated risk is somehow the expected norm.  No one gets that owning the promote is profitable because the guys getting it are guaranteeing a ton of risk and putting a ton of dollars at play.  No one gives that up, because then there is no reason to do new deals - the reward doesn't compensate for the risk

Dec 8, 2021 - 5:26pm
CRE_Guy, what's your opinion? Comment below:

Bingo. Some people have the secret sauce, some don't. Fact of life that I think is forgotten by some especially online. Those that can.. do.. or at least will have an actionable strategy to set themselves up to do so in the future. Those that can't will cope and make excuses bc admitting to yourself you just don't have what it takes is harder than believing that you're owed something (for some reason).

Dec 8, 2021 - 5:14am
Danielplainview, what's your opinion? Comment below:

I love the job. Affordable housing development is fun for me. I think it's worth figuring out what you like, not just what you can stomach. That said, I had some jobs I didn't like before I landed this one. My advice is to push yourself, but not to hurt yourself. If going to the office every day makes you anxious and miserable, look elsewhere because life is far too short. Forget the herd. Figure out what you thrive on. Is it a fast pace, intellectual curiosity, managing people, leading projects, autonomy, interpersonal connection, etc. Also, having a real life/relationships/hobbies outside of work is essential.

  • Assist. VP in RE - Comm
Dec 8, 2021 - 11:48am

Interesting. I've been underwriting affordable housing deals on the equity/debt financing side. I've always wondered if development would be more engaging given that developers are actually creating something and driving the process. The financing partners, while necessary of course, are just along for the ride most of the time pushing papers. 

Good points though. I feel like for most of my career I've only been in jobs I could stomach, but nothing that I truly enjoyed (or even liked). 

Dec 9, 2021 - 5:47am
Danielplainview, what's your opinion? Comment below:

My day to day is definitely more varied than a LIHTC underwriter. It's a different game, a different mindset, and really a different skillset. Yes, knowing how to model is deal is necessary, but certainly not the crux of the job. You could reach out to some affordable development shops and try to get a couple informational interviews. Or just start applying. It's a much more entrepreneurial gig so temperament is important, as is the ability to understand all the different skillsets that go into the job. Meaning you might have a call with a lawyer, then a call with an architect, then a meeting with your GC, then a call with a banker all in the same day. They all come at the project through their own somewhat myopic lens and it's your job to see the field, know what is priority, and guide everyone to the finish line. My advice to you is: take a chance. Right now you have a very good conservative job and you can rely on your experience to get to the next level. You are clearly conscious of mental health, so evaluate your own. It sounds like underwriting might be too repetitive and boring for you and not engaging you enough, so search out roles that offer you more of what you need to thrive: entrepreneurship, project management, autonomy, dynamic work environment, team setting, etc.

Dec 8, 2021 - 4:26pm
jarstar1, what's your opinion? Comment below:

Not to sound like a jerk, but professionally I'm doing great! I'm more than a year into my current position and it's been pretty much everything I've wanted. I don't work more than 45 hour weeks, and I'm not talking about averages, I have never put in more than 45 hours in a single week. I'm not going to lie, I got incredibly lucky, my company is pretty chill and has been staffed well so no one is overwhelmed. Sure there are some tough weeks, but then there are slow ones, it's the nature of development. 

Dec 9, 2021 - 2:16pm
CRE, what's your opinion? Comment below:

Hah, when I saw I was tagged in a thread titled "Is CRE ok?" I fully expected it to be a troll thread too. 

Commercial Real Estate Developer

  • 1
Dec 8, 2021 - 10:28pm
PEarbitrage, what's your opinion? Comment below:

Aside from the insane sellers asking stupid prices. Everything is fine.  Then again, CRE is just one of a few things I do so my hours are closer to banking that CRE

Dec 9, 2021 - 2:20pm
CRE, what's your opinion? Comment below:
Associate 2 in RE - Other

Been seeing several posts on the IB and PE boards about people feeling fed up and struggling with their mental health. Burnout seems super pervasive right now, so I thought I'd ask my CRE comrades this -- are you okay? How are you doing?

Good thread. I'm personally burnt out, but it's one of those SufferingFromSuccess.jpeg memes where the past year has just been so good for what I do that I've never been busier. Even the worst thing - construction costs rising to comic levels - is negated because rents are going up right with them and cap rates are going down. On top of that, I've been moonlighting on my own deals, and I hope to start that full time come Q1 with a mentor of mine, so I've been working a full time job and a part time job. It's just a lot. 

I personally feel like I always get burnt out around the end of the year too, so I make sure to take an extended Christmas/New Years break. I'm looking forward to that here in a few weeks and I'm sure it will be as rejuvenating as it always is. 

Commercial Real Estate Developer

  • 4
Dec 10, 2021 - 9:31am
TheDebtStar, what's your opinion? Comment below:

Personally and professionally, I've never been better. I quit my job earlier this year with the plan to buy up foreclosures and flip some houses as well as running my real estate investments. Since then, I put a development deal together of 192 units and brought it to some guys in the business.  We closed a few weeks ago and I'll get a very sizable piece of the pie on that deal, plus I'm putting another together as we speak. Should keep me busy for the next few years. My dream has always been to run a real estate firm. I still have plenty of time to do all the things I love - hunt, travel, fish, work out during lunch breaks and play basketball in the evenings.

Dec 11, 2021 - 10:09pm
redever, what's your opinion? Comment below:

This is an interesting thread... and I do think people are are experiencing more mental health stress in general due to all the pandemic factors and such (and even geopolitical craziness). Not sure it is worse/better in the real estate industry tbh. I noticed a theme in a lot of the comments, that of early career stress... like the burnout of working hard and not feeling like advancing or where a person wants to be. 

On that, a quick thought. I gather that most of the commenters with such a perspective and probably the OP are in their 20s (maybe early 30s). I'm in late 30s now, and for what it's worth... I didn't really feel like "confident/happy" in my career personally until I was just about 35 (in part due to major job upgrade I got at 34). I think early stage careers are stressful, too long hours, and just plain suck a lot of the time (even when pay is decent by all meaningful comparisons). The saying "it gets better" is pretty apt/true from my point of view (same for pay lol). I also thing there is something to be said for payoff for being persistent and you have to do your dues.  

So, if you are in that early stage, and feel like you are living at the edge of stress due to a constantly demanding boss, firm, or just deal life.... it will get better. If you feel like you don't "know how to really do your job", time will fix that! This is why I often dissuade people from jumping jobs too fast, or even taking laterals as a career strategy, I think it runs the risk of "resetting the clock" on getting out of the shitty part of a career. You really need to be "promoted" out of it!!!

I think is true for CRE, but also much of finance, corporate world, tech, law, medicine, military... I mean just about any demanding professional career path. So if you are feeling stuck, down, etc.... just know you are not alone... it gets better! 

Dec 15, 2021 - 2:12pm
dropkilla, what's your opinion? Comment below:

I am having this strange realization that i am going through the motions.  I feel like none of the stuff i do from a day to day really matters in the grand scheme of things.  I am not mistreated at work, i am paid well, and overall happy with my company but like what is the point of all this.  I love real estate, i think it is interesting, always looking to learn more, but i dont think i will ever truly be satisfied until i work for my self.  Even then i see it as a means to an end, I am working so i dont have to work later on.

Also I think I need to go to therapy, I feel like I cannot make meaningful relationships with people anymore.  I don't consider my colleagues at work on my team friends even though we talk about a lot more than just work and they probably know a lot more about me than other people I consider my friends.  It just strange like, i feel like none of this matters.  I am not unhappy but its like what is the point of all this.  Only way I can describe it is that i am going through the motions.  Does anyone else feel like they are a Sims character or something?

  • Assist. VP in RE - Comm
Dec 15, 2021 - 4:46pm

Rant incoming... You are definitely not alone in feeling that way. Once you really sit down and evaluate the role of work in life, the whole concept of a modern 9-5 feels antiquated. The system may have been sufficient 50 years ago, but it's not today. I mean honestly, how many people are working straight through a 9-5 (or worse 8-6/7/8/9) doing work that ACTUALLY matters? And even if you are, why do so many of us have to waste time putting on uncomfortable clothes, sitting in traffic, only to sit in a chair to do the same thing we could do from anywhere in the world? Most of us are "just going through the motions" because that's what we need to do to pay the bills. I guess part of life is just accepting that this is it, that we have to put food on the table somehow, and we might as well get paid well to do it. And try to extract as much joy from life as possible in the hours you are not working. The tragedy of those privileged enough to be in this position, IMO, is that most of us fall short of self-actualization. All of our needs are met, except the need to contribute to something greater and/or realize our full potential. You can't do that as an employee pushing papers all day, so it feels like there is something missing. It is hard work to figure that out. I sure haven't. The path of least resistance leads to a satisfactory but not exemplary life. 

I am hopeful that the pandemic has encouraged people to question the role of work in their life. I feel like there has been a subtle shift in the American attitude towards work, and I am all for it. For many, work has always been the central "core" of life. And how could it not be when the adjacent hours before 9 and after 5, are spent either getting ready for work, commuting, or decompressing from work. Living for the weekend sucks. Work should really reside on the perimeter of life, and not occupy the center. If you are one of the lucky ones who love what you do... I must say congratulations, and I am jealous.

Finally, colleagues are just that... colleagues. Leave your job and tell me how many you keep in touch with. MAYBE one or two. But probably zero. Yeah maybe I need therapy too. 

Jan 3, 2022 - 5:55pm
Alpha.Omega, what's your opinion? Comment below:

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