List of Strategies/Plays for Real Estate?
Hi, just finished my first Internship in RE. I didn't end up getting a job at the REPE I interned at for 6 months due to 'cultural fit issues,' which basically means the senior analyst didn't like me enough on a personal level.
So I was hitting the books so I can get a job next time around right off the bat hopefully. I was aware of 3 general types of strategy when underwriting a property; not valuation strategy but strategies to get the best return I guess.
The strategies I am aware of thus far are: 1) Value-Add/Repositioning 2) Development/Re-development 3) Arbitrage/Roll-up
I feel like this is an important basic thing I should make sure I know all about before I start jumping into all the Pro-Forma modeling I didn't get to learn during the Internship so I can make myself look like a good hire. Are there any strategies I should be aware of in addition to these 3 please?
Thank you!!
(also if anyone knows where a good place apply for RE analyst type jobs in the South California area I would be very interested!!)
Irvine Company is generally not thought of as a great place to start. I've heard from multiple people that the culture on the acquisitions side is not great. If you are on the development side or leasing it may be different.
OP, what you're describing are different things. Value-Add/re-positioning and development/re-dev are what I would call investment themes that fall more within the risk spectrum/profile. So a value-add deal is more capital intensive/higher risk than a core/core-plus deal where someone is going to just clip a coupon and get a rent check every month - but the expected return is also higher. The third item (arbitrage/roll-up) is a potential strategy within those themes (i.e., buy a lot of individual value-add properties, lease/fix them up, then sell in a portfolio to get a pricing premium from investors that like the scale). An investment strategy/thesis to me reads something like 'we are going to take advantage of the aging baby boomer population by buying B/C apartments in urban areas and re-position them as senior housing; or 'we are going to capitalize on the increase in international trade activity by acquiring former office/mixed use properties in and around the major ports and develop class A industrial/logistics facilities.'
There are literally thousands of specific strategies (the 'how' and 'why') that a firm could implement, but only a handful of general risk profiles/themes/categories.
Would recommend broadening your search to not just REPE's (REITs, brokerage firms, debt platforms, etc.).
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