Leasing at PERE firms
Obviously the two most talked about and sought after roles in Pere are acquisitions and asset management, but can anyone give their two cents about working on a leasing team at a Pere firm? I was offered a leasing internship at 10bn+ shop and am uncertain if I have a huge interest in leasing. What is the financial modeling like? Do you work closely with other teams? Is it well regarded/would it be relevant experience to eventually move to the principle side at another Pere firm?
Thanks in advance!
I've never heard of a PERE firm having an in-house dedicated leasing term. The asset management team will hire a third-party property management company to manage the day-to-day operations and leasing of the asset.
I think he's talking about commercial leasing...
I don't have personal experience working on the leasing team we have in house, but I do work rather closely with them and can give you our process from an asset management perspective.
Leasing will talk to leasing brokers and reach out to their contacts at companies that they've done deals with in the past and gauge their interest in our spaces whether its office, industrial, or retail. Occasionally there are hot leads that come in from the companies themselves expressing interest in our properties which is honestly ideal and saves time. Then the negotiating starts and our leasing team already have rents and term in mind that are deal breakers. They aren't going to waste anyone's time if the company is unwilling to meet our rent threshold. Once an initial term is hammered out (rent, term, TA/LC, etc) they send it to asset management to run models and sensitivity analyses to have the deal hit the IRR threshold needed. Once asset management signs off on the financials of the deal leasing hands the process over to legal for them to draft up the leases.
We might be an outlier, but we have our asset management do the modeling of the deals and so our leasing team only has to worry about making the deals and not in excel. It would be a natural move (here at least) to move from leasing to asset management since you get tangential exposure to tenant credit, what makes a good deal financially, and the time horizons needed to to re-tenant spaces to have minimal down time. You can also see that they work very closely with those two teams (legal and asset management), but they also have input on acquisitions on if they think they could lease the space, what rents they are seeing as market average, etc.. If your goal is acquisitions then probably not the best experience, but can't hurt.
REPE firms will not have leasing departments as they don’t run deals, they only invest.
GP firms (of which some operate out of funds, but the majority are capitalized by deal) will have in house leasing teams.
In house leasing guys at a GP can make good money depending on the pay structure and usually work hand in hand with the acquisition teams. However, every GP is different.
Note: If the GP does multi family this does not apply, as anyone with a high school degree can lease apartments. Industrial, office and MOBs are where leasing guys see big pay days.
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