Moving from Buyside to Sellside / Advisory Role
Currently work for a PERE 50 firm as an associate and can't help but be enamored by the significantly higher pay packages some of my sellside friends have (Eastdil and BB REIB, etc), who're clearing $300k-$400k as a senior associate, with rapidly escalating comp once they get promoted to VP/Director/etc. I know that the real buyside money comes with carry, but: it's going to be a while before I get carry and there are no guarantees the carry will amount to anything significant.
Has anyone else made this move? If I'm indifferent to the long hours / added stress of IB, is there any reason I shouldn't make this move? Curious how others would think about this. Thanks.
I've tossed this idea around as well. I went straight to the buy-side after college but I truly think my skill-set/personality would be most valuable in a production based role. The one thing keeping me from transition to a sell side role with 'unlimited' upside is the fact that we are currently the 'clients'. When you work in a sell side role you answer the phone whenever a client calls, you make plans for a Friday night but the second an email hits your inbox at 5pm you're locked in until you turn around whatever the deliverable may be.
The sell-side is attractive to me until I realize the people I'm emailing work to in the afternoon on a Friday will be making weekend plans to complete it.
Thanks for the response. Fair enough. To me, those scenarios are well worth the stepwise jump in pay, as they don't happen all the time. I just wish I had given Eastdil / BB REIB more of a look when I was recruiting earlier
I work in REIB and I will say the grass is not always greener. The money is great for my age (have saved about $250k at 26) but sometimes I feel I’m lacking in true real estate knowledge relative to my peers.
Sure, I can model out any scenario, have worked on a huge variety of transaction types and property types, the description of some of my deals sound fancy/technical, but at the end of the day we are just a broker. We don’t get in the weeds and truly evaluate whether or not a deal is good or bad, what the risks are, etc. Often times I’m too busy to step back and think about how that file I sent as a response to a DD question impacts valuation. I just move on to the next item on my to-do list.
We also don’t underwrite to the same level investors do. If we’re doing a pref equity raise, it’s our job to opine on the amount of financing they could get, advise them on how to respond to an unfair covenant, let them know that xyz term sounds tough but is actually market for transactions like this.
It’s not our job to say “your projected rents are too high at this asset in the collateral pool, capex looks too conservative, this leasing velocity is unrealistic for this market, etc.” All of our focus is on financing / transactions terms with much less attention to the actual assets, their risks / strengths. Ultimately, our clients are paying for my bosses relationships and access to capital - not their real estate knowledge.
I do enjoy the job though, which is part of why I’ve stuck around for a while. But now that I’m interviewing for REPE jobs I’m starting to see my real estate knowledge shortcomings.
I feel like the older you get, the less transferable your skills are. Lots of senior associate and VP level exits are to publicly traded REITs - that could end up being extremely lucrative if you move up (plenty of CFOs with former banking experience). But it’s a different path and you wouldn’t be acting as an investor in that role.
Highly recommend you reach out to some people who have been in banking for a while or people who spent 3-5 years there and left. Don’t talk to your mba associate buddies who just got their first $150k bonus check - you eventually grow numb to the big steady bonuses.
Curious how much you make in your role? I know it’s not $400k but it shouldn’t be that far off I imagine? For me the difference between $300k and $400k is not that huge if you’re doing work you enjoy and have a future at your company.
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