Wanted to do this since I have recently seen a trend of more CRE posts in general, and quite a few about REPE specifically. Brief background: -Not really sure if there's such a thing as a 'target' tranche for CRE/REPE in undergraduate schools, but I went to what would probably be grouped as a semi-target, majored in finance/econ, got a 3.6+ GPA. School didn't really have much of a RE program at the time, but did take a few classes. -CRE hiring market was not great when I graduated, so worked in F500/corp finance for a couple of years before making the jump to CRE. Was networking literally the entire time I was at said F500 before I got a few interviews at different firms. Don't want to expand on this that much as what I was doing at the company was really specific/niche, so it would be hard not to out myself. -Networking finally paid off and I got a gig at one of the large brokerages as sort of a hybrid generalist/econ/research analyst. Did this for a little under 1.5 years, worked my ass off and got offered to join an investment sales team at the same firm as an analyst. Worked in that capacity for two years, got promoted during that stint. -Had a 'come-to-Jesus' meeting with the team at the end of the stint, the option was to a) stay on the team, which I considered because I genuinely liked them all and the job itself was not too shabby; or b) go to a buy-side shop. Obviously chose the latter since it was better for me personally. Interviewed a bit and ended up as an acquisitions guy at a REPE firm. Been doing this for about 1.5 years now. Ask away. This might be a pretty busy week so I apologize in advance if there's a delay in responding to anyone.
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+1 on the advice to learn how to use excel. Might be the best recommendation I've seen on here. The modeling course helps a lot to learn some of the key real estate concepts, but learning how to model well and how to use new functions properly just comes with time and trial and error experience. To really analyze the data you're looking at properly and be able to derive meaningful outputs from it, you must first understand the data and what you truly want to do with it. Once you know the end goal of what you are trying to do, you will be able to figure out how to do it in excel by looking up the functions you need. Then you do it a few more times and it becomes second nature.
From a technical perspective, it was a breeze transitioning. If the investment sales team is worth their salt, the volume you will see going to the principal side in general is a lot more manageable. Sometimes you'll go into a really complex rabbit hole, but its nothing that you wouldn't be able to handle. There are a lot of experiential things that you learn coming over to the principal side, but again, that just comes with time.
I'm a generalist, so everything. Personally, I love multifamily and industrial just because in my experience they 1) are less brain damage financially, 2) there are some really cool projects in both of these spaces at the moment (CBD/urban high rise MF; high-tech industrial like Tesla, for example), 3) I generally gravitate towards the markets in which these two have been thriving, 4) I like getting the 'resi' component that multi brings (albeit small) and the big business/logistics component that industrial gives. Retail is 'meh' for me for obvious reasons, and I really don't like office all that much tbh. It's a lot more work for the big core stuff, and for the smaller value-add stuff I just can't get excited anymore about spec'ing out a bunch of creative tenants with gaudy TI's and way-too-high rents, and the rehab/re-positioning that comes with value-add office.
I'm relatively confident that the floor will be in the ~$170 range all-in, but won't know for certain til the end of the year.
The latter, for sure. I've discussed this with other posters, but I'm of the opinion that the boutique shops on the principal side are usually more of a mixed bag as far as skillset, whereas the investment sales analysts are thought of as more commoditized/standardized. I.e., as a hiring manager I roughly know what I can expect, to a certain degree. So while there are juniors on the principal side that crush it, there are also those on the flip-side. There's a chance that I might get a rockstar with buy-side experience, but the person might also not know shit, whereas if I hire someone from a formal sell-side program/shop, I at least know what I'm getting.
Another thing which doesn't get discussed as much is that a lot of times (as is the case with me), the brokers on the team placed me with my current shop (or at least provided the intro), so in a lot of cases they will open doors that otherwise wouldn't be available since they have direct access to all of their principal/buy-side contacts. This benefits them as well because it places a 'friend of the firm' at one of their clients, thus strengthening the relationship.
Thanks for doing this.
Other than networking, and maybe something else that would reveal too much about you, what were some ways you differentiated yourself when you made the initially made the jump from F500 to the large CRE broker, and then switch internally? Is there an alternative to investment sales that you could have chosen to get a similar skillset that would help on the buy-side? I'm in sort of a similar position to where you were several years ago and am strongly considering this.
When I was jumping from F500, what I was doing was extremely econ/stat heavy, so I was pretty good at excel at that point which I think was a differentiation vs. people I was competing against just given I didn't have all that much FT experience at the time and I was going for entry level roles. Then when I got to the CRE firm, I made sure I mastered almost everything about excel - after this point, I would tell you that there are probably only 1-2 people I've met that know how to do as much/more than I do with the software. I don't mean that as a bragging point but the reason this is relevant is that it allowed me to do things more quickly than my peers, which allowed me to move on to other tasks/pet projects that made people at the firm notice me. Also, once I made up my mind that the career was for me, I made sure I was the last person in the office almost every night for 1 year +. So short answer, is a combo of technical know how/curiosity coupled with the willpower to put in long hours.
EDIT: Meant this to be a reply to @pourts below:
First of all, thank you for your service. Additionally, I've always thought being a pilot is pretty impressive, so congrats.
They are OK as far as enhancing your resume to an extent, but I wouldn't recommend any of the formal/university excel courses to be honest. A lot of these are academic only and don't teach a material that will be most useful in a professional setting, whether it be data analysis/aggregation, high finance, or stat modeling. Most people I know that are good at excel either learned it on the job or 'taught themselves'. There are a lot of good (free) online resources like Mr. Excel. Not sure how advanced you are/aren't to begin with, but I recommend starting with something that you can relate to in your life and then building from there on the raw excel skills. Example: instead of using premade apps/software for budgeting or checking on your personal finances, download the raw data from your bank/financial institution from your checking, saving, credit card, etc. and come up with some data points that you want to track/analyze. Or, since you're a pilot I'm sure you are privy to a bunch of cool data that the average person can't access or wouldn't know how to read, so you could start there. This is important, because you have to understand the information you're looking at in order to see if it makes sense/you're doing it right. Once you do that, which should teach you things like vlookup, offset/match, pivot tables, if statements, sumifs, charting, etc. you can move on to cash flow/financial modeling. For that, you can look online for several samples of finished products of DCF's, waterfalls, etc. then try and recreate them.
And of course, if you have any specific questions feel free to PM myself or other users on here that I'm sure would be happy to help.
The timeline in my mind would be probably 1-2 more years for me personally. I think by that point I'll have enough of a handle on how to work the relationships both internally and externally, as well as have a good enough pulse on the markets I'm covering. But again, this depends on a lot of factors.
Carry is not part of my comp yet, but I will say that the place I'm at has a rep for taking care of the juniors better than other shops in my region. The other selling point for me with this place was that it's lean, so after you get through the analyst/associate phase, you have the chance to become the main person in your market(s) without having to go through the AVP/VP stage, which can shave some time off of your 'pathway'.
One sidebar, when the time comes, make sure you clarify wherever you go if the comp package at the upper echelon is true 'carry' or 'participation'. Others have touched on this, but CRE is different on the acquisitions side in that some firms offer straight up carry similar to traditional PE, and some offer the ability to put up your own money/invest in the funds that your firm manages. Some do both. Both are good, but just make sure you go in with eyes wide open.
Thanks for the questions. Aside from the obvious answer of hopefully becoming a partner and getting a pretty good carry/equity/comp package, I think I see myself being the main deal/acquisitions guy in my market(s) at my current firm or one like it. I've also thought of eventually going on my own with a few other guys in the industry and doing a combo shop where we do the usual REPE stuff (value add, reposition, etc) in one fund and then have another pet project fund where we invest as the LP in smaller local developments. Between these other guys and I, we know enough about development to be dangerous and are interested in it, but don't have all the relationships to do everything ourselves, so this would be an interesting route. On the side, I was pretty disciplined with saving the first few years of my career (read: eating ramen & cereal way too much) so I'm in early stages of creating a (very) small personal RE portfolio as a side hustle. My goal with that is to have at least 10 units as soon as I'm able that can give me some relatively stable side income.
I don't know if it's necessarily unexpected, but two things I have come to appreciate even more are: 1) just how difficult it is to actually win a deal in this business, especially in the current market climate. The senior guys in our office have stellar reputations (which is one of the main reasons I joined) and even they lose out on deals more often than you would think. I've seen some pretty gnarly things that other shops have done to get awarded deals (like make bad concessions or agree to bad terms in the negotiation/offering process) so I'm glad I ended up where I did. This is largely a roll of the dice though unless you are able to do research beforehand or know the firm well going into it. 2) How much time is spent fundraising vs. actually executing deals. I mean don't get me wrong, I always knew that the capital raising is one of, if not the, hardest part of being on the principal side, but even at a shop like ours which has a good track record and long-standing, healthy relationships, so much of the seniors' time is devoted to going to conferences, investor events, etc. It's not unlike brokerage in that regard. Don't think I'd do anything differently necessarily, but I definitely want to get exposed to this aspect of the business since it's invaluable if I were to decide to ever go out on my own.
Yes, this has been the biggest learning curve, just learning how to think about this stuff. It's way different switching from the sell-side to the buy-side just from the standpoint of how the deal is viewed. It sounds obvious, but its a very intricate process. Without revealing too much, I can tell you a funny story about a time where we were pretty deep in the woods on this one deal, and then when we were about to throw out an offer to the brokers, a few of our senior guys had a conversation and said something to the effect of 'wait, doesn't [one of our competitors] own this deal?' and one of the other guys was like 'yeah I think you're right' and everyone in the meeting just starts sighing and cursing, and then I was sitting there with a perplexed look on my face, and one of the head honchos asks me to tell him how much they purchased it for back like 7 years ago when they bought it, and after I told him the #, they go 'well shit, that's like a 2x multiple - do we really want to make them look like heroes? How will it look to our investors if we buy this deal from our competitors? They might come back and say "why didn't you guys buy this deal 7 years ago instead of now at a mark-up from one of your main competitors?" and then go invest their money with them next time.' Sorry for the long winded response, but you can see an example of the schemes-within-schemes that everyone engages in for the sake of optics and perception. This had nothing to do with the deal returns itself - by all measures we still would have made good money on the deal, but we opted to chase another asset which we were then awarded and closed about 1.5 months later.
This isn't the ONLY thing you could do, but I'd recommend trying to play up other parts of the deal process that you've been involved in (ex: bid process, calls with prospective buyers, helping organize the DD, fielding calls from buyers about DD, working with the debt team to structure the loan/come up with the assumptions, go on property tours, do some market research, maybe even go to a pitch or help create the pitch, etc.) Each shop is organized differently so some of these functions may be done by others solely, but to the extent possible, try and be involved in as many aspects of the deal as you can.