I’m in acq at a large IM ($50B+). Deal flow is a trickle, fundraising is slow, but we’re still underwriting a lot. Morale feels low as a result, and it feels like everyone is nervous/frustrated, all the way up to the SVPs and MDs. Curious what it’s like at other firms.
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How is that possible?
You're not alone. Same for me and I have heard this from most people who I've talked with in buyside roles. We are doing deals because we raised money at the right time but stretched extremely thin.
But are you doing more with less or the same amount of resources? This isn’t the 2021 market, so it’s confusing me why we’re so overwhelmed and unhappy (me included).
Or have we steadily been beaten down since 2022 that we have lower tolerance for being busy?
You probably feel that way because burn out is a result of working hard without getting results
Doing more with less. More deal activity and more asset management that is collectively being done by fewer people than we once had. The fatigue of the last few years is real so I get the question but we've had some layoffs that shifted meaningful work to the remaining team members.
Busiest I’ve been since 2021. Family office money that isn’t necessarily chasing opportunistic returns. We’ll gobble up low lot coverage Class B warehouses in premiere markets all day at ~200-250 basis points over the 10 year treasury yield. Yes, there is tariff risk and vacancy rates have sky rocketed since 2021. However, a lot of that vacancy seems to be focused on newer construction Class A product asking crazy high rents. Eventually these low lot coverage Class B warehouses become development sites at one point or another. In the meantime we are parking cash somewhere at a ~6-7% cap rate while we wait out the storm.
I said it before and I will say it again. They aren't hiring and are doubling down on the amount of work their existing human capital is producing. This is just the CRE landscape now
This feels like exactly what’s going on at my shop right now. Do you think this is just because of the downturn or is this going to be more permanent?
People have short memories, I imagine in 3-4 years if the cycle shifts significantly people are going to over-hire again in another great run-up. This time is not different.
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