Post MBA RE Development Comp
I’m a recent MBA graduate who landed a role as a real estate development associate at a commercial RE development firm. I had 6 years of sales and marketing experience prior I my MBA, but it was unrelated to RE. I’m in a lower COL city, and I’m curious if my compensation seems appropriate. I’m currently making $100k base with a 20% bonus. Should I expect it to progress quicker given my extra experience (even though it’s unrelated to RE)? Thanks!
What realm of business school did you graduate from? H/S/W, M7, T-15, T-20, T-20+? Seen MBA development roles for the bigger shops closer to $125-150K w/ minimum 30%ish bonus and they typically recruit at the T-15 + UNC/USC. If you're at a more regional shop, you're likely somewhat in line. Although, possibly a touch light. As a career switcher, take it and run. Development's the long game.
Thanks for the response. T-15 MBA, and I’m working at a smaller regional shop. Right now I don’t have any long term incentives (carry, milestone bonuses, etc), at what point should I expect this or consider asking for it?
It's a pro and a con working at these regional shops. Pro: there isn't as set/formal compensation structures that HR oversees as compared to the larger development shops so there could be more room to negotiate. Con: the starting salary/bonus is usually weaker than a larger development shop.
I would say don't worry about compensation at this point (development is known to not be as remunerative as traditional REPE) and work hard/grind it out to prove yourself. Once you've shown your an asset for your team and the firm, there's much more room to negotiate comp/title/etc. Saying this from experience and wouldn't have it any other way. You own your own destiny and that's exciting. Go out there and crush it! You got it!
I was at a T15, construction experience pre-MBA, in Tier 1 city, starting salary was $145k w/ 10% bonus, just got bumped to $160k, bonus is the same. I hear participation only starts when you get to SVP or MD in my firm. A little bummed bonus is low, but I'll be fine, I'll definitely be looking for carry on my next job (or maybe the one after that, depending on when I jump).
For being in lower COL city, and first job in development (or CRE for that matter).... $100k + 20% bonus is market (meaning, not overpaid, not underpaid). Frankly, that offer could come from larger firms even in higher cost of living cities (so I'd say it could be more generous than not).
The key is first job in development/first job in CRE, the prior years of experience help you get the job (i.e. shows maturity, ability to execute, etc.), but at this point you will fly on your own performance. If you can out work/compete the less exp. new hires, you will get promoted faster, but development firms tend to be fairly meritocratic (with varying levels of favoritism and corp politics as should be expected).
The key is you got your first job in development! From there you can move/swap firms as you need/can, but that first job is really the hardest to get. Everyone seems to prefer experience (even for dev. associate roles, at least at my firm that seems to be the case), so if you think should get better pay, the market may be your friend in just a few years or so!
I feel / felt the same when I started - very lucky to be able to make the jump from a different industry and am trying to just grind it out at prove myself for more comp / title. However, recently got inbounds from a recruiter about an associate role at another developer where the salary is 20% - 60% more than I'm making now + bonus at 80% - 100% of salary(no guaranteed or target bonus for my role currently). I am allowed to co-invest with $ loaned by the firm, but no promote currently.
The eventual carrot of promote has to be pretty good to make up for 2-4 years of being paid that far under market....
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