Lateraling out of Niche Product Types
Trying to make a move to REPE and I have an "in" at a REPE firm that specializes in something unique (EG student housing, data centers, self storage). I wouldn't get to work on all of those - just one...
Anyone have any luck leaving a specialized property type like student housing for more of a generalist group, where you could do multi, office, hospitality, etc.
I’m just a student but I got to a big real estate school (Cornell, USC, NYU, Berkeley) so I thought I’d chime in. Based on conversations with alumni and others it seems like the transition is doable at the analyst/associate level. Once you hit VP or mid level you kinda get pigeonholed into your niche. But honestly some of these specialty REPE firms seem kinda dope. I think Harrison street does student housing and the culture/pay seems really good. Tbh why be a generalist at some MF with shitty culture and a big possibility that you could get pushed out in a few years when you have an “in” at a specialty firm where you could build your career there?
Thanks for the opinion (and being honest about being a student).
The risk with specialization is you have less optionality when you are pushed out (this still happens at Harrison Street, Kayne Anderson, KSL, etc.) If I am pushed out at a generalist group, I'll have closed industrial deals, office deals, multifamily deals, student housing deals, etc.
So I wasn't necessarily a student housing specialist, but I'm still a competitive candidate for a VP lateral at a group that focuses on student housing (or a group that focuses on office, industrial, multi, etc).
But let's say I'm pushed out at VP in a group that focuses on student housing... Who is going to hire me as a VP lateral now? Only student housing groups. Your job market is a fraction of the size of someone who has closed office, industrial, retail deals in addition to student housing.
That's why
Yeah fair enough, I see your point. I just feel that sometimes when you’re a generalist at large firms you just don’t get promoted as fast. A lot of people hit VP and stagnate for like 7+ years.
Just one other idea - maybe go for a RE acquisitions gig at an investment bank in their merchant banking/asset management arm (Morgan Stanley Investment Management, JP Morgan asset management, GS Merchant banking)? Banks are notorious for promoting really fast. I had a family friend who went from associate -> global head MD in like 9 years at Lehman brothers RE back in the day. Then he lateraled to another top firm after Lehman went under.
Yeah fair enough, I see your point. I just feel that sometimes when you’re a generalist at large firms you just don’t get promoted as fast. A lot of people hit VP and stagnate for like 7+ years.
Just one other idea - maybe go for a RE acquisitions gig at an investment bank in their merchant banking/asset management arm (Morgan Stanley Investment Management, JP Morgan asset management, GS Merchant banking)? Banks are notorious for promoting really fast. I had a family friend who went from associate -> global head MD in like 9 years at Lehman brothers RE back in the day. Then he lateraled to another top firm after Lehman went under.
I think this is a bit too deterministic. At a senior level, yes, this is true - but only because senior folks are expected to bring in business, and your network, which you would have presumably spent years building, is very much geared towards [data center/student housing/self storage/etc]. I find that junior folks on this specific subforum are way too worried about getting pigeonholed - the bones of both acquisition and development are basically the same (across asset classes, obviously acq/dev are very different things to do). Just try to understand what makes the asset class you're in attractive to your investors versus any other asset class, and why. A lot of the specfici barriers to entry like knowledge of regulation or inflection/danger points for various types of investment won't matter, because someone will catch those for you.
I wouldn’t worry about it as an analyst or associate. It’s all the same thought process - supply and demand, and than how we think our investment will perform. Once you hit VP though, you may not want to do that niche. I’m actually struggling with this right now as I’ve had the opportunity to move to a niche which I would love to do, except to get my next job, there are only like three operators in my city that work in this niche. So I’m probably not going to make the move. With that said, when push comes to shove, investing is investing and each product type has nuances. You can 100% move from student housing to multi or self storage to multi or office, you just need to learn the nuances, and moving firms will require a firm seeing that you can take 3-6 months to learn that. The issue, many people don’t look at it that way - though there are people who do. If your biggest worry is the exit, I wouldn't be so worried as an analyst or associate, but if you’re a VP, I may think twice about moving to be super specialized.
Frankly, with student housing it’s probably easy to move to multi family. With self storage, you can probably make the move as well. If you’re going to do self storage though, make sure you’re okay buying 12 $3MM to $10MM deals per year type of play. Self storage deals are generally very small. I know it sounds funny to say, but some people will think it’s cool, until they realize the amount of work it takes to get the same amount of dollars out the door. It’s easy to find a multi deal for $30MM of equity but hard to find a self storage deal for that. Data centers are the super niche product though.
I think the other problem is lack of Argus experience. Lateraling from Senior, student, multifamily, self storage -> retail, office is so much harder without Argus...
Does your firm have Argus where you can self teach or would it worth it for you at this point to get a cert?
Asking because I work in multifamily/mixed use and think of the lack of Argus exposure often.
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