Long Term Comp Prospect of CRE
Everything I see on WSO indicates that RE doesn’t pay well until you go off on your own or become a partner at a REPE firm, and as a first year all the posts are lowkey making me question my career choices. However, comp reports that I see clearly indicate otherwise. For context, currently at a large REIM/REPE ($25B+ AUM) in acq in a LCOL market. Pay is known to be below market and from what I can tell VPs are in the 250-300k total comp range and MDs might be in the 400-500k range. Thats not even bad, and this is coming from a firm known to be below market. If anyone has read comp reports by PERE, which is a study with around 1000 respondents across firms, average comp is around 450k (all-in) for VPs in REPE acq, 330k VPs at REIMs, and around 1.2M for MDs in REPE acq and 660k for MDs at REIMs, VPs being at around 7-10 YOE and MDs at 15+. AMs seem to be at about a 20-30% discount to ACQ. And this is excluding carry, which is supposedly where the “big money” comes in. I would say those are pretty good numbers so are people on WSO just tripping or are comp reports just wildly wrong? Additionally, the MDs I’ve seen in the northeast or on the west coast tend to live in $2-4M homes. All the people saying the grass is greener in other fields, it seems to me like you can make bank in RE and idk what the fuss is about. Any older heads on WSO, thoughts ?
Bump
Based on the most helpful WSO content, here are some insights into the long-term compensation prospects in Commercial Real Estate (CRE) and Real Estate Private Equity (REPE):
Compensation Reports:
Market Comparisons:
Carry and Long-Term Prospects:
Lifestyle Indicators:
Community Sentiment:
In summary, while there might be some skepticism or negative sentiment in certain WSO threads, compensation reports and real-world data suggest that careers in REPE and CRE can be highly lucrative, especially as professionals gain more experience and move up the ranks.
Sources: BIG NEWS: WSO Compensation Report is OUT!, Let’s talk REPE Comp, REPE Analyst Comp Insight, REPE is overrated, Top Highest Paying REPE
It's not "bad" comp, the people on here are comparing the numbers to traditional PE, hedge funds and similar which have SIGNIFICANTLY better comp at junior levels, and generally higher ceilings without going out on your own.
You get paid a ton. You just don't make absolute highest-echelon of the PE industry money.
Look, most people on WSO are either in college or just out of it, so the focus is on "what is the highest potential compensation I can earn at age 27" and not something more meaningful or realistic, like "what is the comparison of an average comp year for an average person." PE or being at a HF... there are people in their late 20s and early 30s making a fuck ton of money in those industries. They're working for someone else. Even if the average WSO poster has basically a 0% chance of getting there, the path there is really easy.
By contrast, that's not so easy in real estate, where to make that kind of money at that age you need to be doing your own deals. Which involves risk. Which is a concept very few people in finance actually understand.
Appreciate the response Ozy. My qualm with this reasoning is that Heidrick & Struggles comp reports (the standard for traditional PE) puts VP all-in comp in the range of 300-600 depending on the latest fund size, with the average coming in the middle 400s. Assuming traditional PE has a similar promotion timeline (7-10 years YOE for a VP), then based on these comp reports that would mean that comp in REPE is relatively in line if maybe at a very minor discount to traditional PE, without having to go off on their own and take on all that risk. Which means that those late 20s/early 30s people you’re describing in REPE are doing pretty much just as well as those in traditional PE. That being said, if those numbers are accurate I feel that our industry is being given an unfair rep regarding comp and prospective RE monkeys are being unjustly deterred and convinced they can’t be making bands in our industry.
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