RE debt brokerage to lender
Currently in real estate debt placement at one of the larger brokerages in the US (~2 years in) and have been looking to transition to the lending side.
My ideal role is something that gives exposure not just to direct lending but also warehouse, repo, loan-on-loan, securitization etc., but those roles are obviously pretty limited and I’ve been struggling to make headway from a brokerage background.
I’ve recently received an offer from a large platform, but not as a lender - it’s within their real estate equity business, supporting on raising / structuring financing for their acquisitions and developments and managing the loan book from the borrower side.
It’s a big step up in brand, but I’m not convinced it actually moves me closer to what I want to do. It feels like I’d be doing a similar job to now, just in-house, and still not building lender credibility.
The alternative is to stay in brokerage and keep pushing for a move to a less prestigious lender but this would be a gamble, even if that’s at a smaller / less “prestigious” shop and more vanilla direct lending initially.
Main concern is ending up 4–5 years into my career still on the borrower/brokerage side and then trying to break into the more structured RE finance space at Associate level, vs moving now where I’m still more “junior” and expected to learn.
Also conscious that the longer-term goal is more structured RE credit / RE securitized products, and I’m not sure whether taking this role makes that transition harder or easier.
Interested in views from anyone who’s made a similar move or seen people do it.
I have definitely seen the transition from brokerage to lending before. I think it's easier for analysts/associates at major brokerage firms to transition into debt originations teams (bank, lifeco, debt fund, etc.).
You have to lean in on your underwriting skills. I work in debt originations and i can tell you that we actually like interviewing and hiring analysts from big shops (JLL, Eastdil, CBRE, etc.) if we can. If you have experience with modeling, argus, and various product types, writing memos, thats incredibly helpful.
From there you can likely focus on building good relationships with any internal capital markets teams that do the other stuff you're looking for, because i would agree that roles in capital markets teams are fewer and far between.
Why kind of lender are you at?
Thanks for the reply. Any thoughts on taking the role managing the financing for the equity team (think MSREI) over staying in brokerage if the end goal is lending? Any thoughts on what presents better for a lending role?
First off two things 1) D/E brokerage to lending is probably one of the most obvious and common transitions in the industry 2) 5 years is the tip of the iceberg at the entry level. I was a D/E broker for almost 5 years before I jumped to LP side.
In terms of the role, assuming its a team with strong deal flow (which I assume it is if theyre hiring) your experience will be incremental and better than just the D/E side. The reason is simple - I currently lead all of our cap markets activity in addition to acquistions and the difference in that seat is that you actually LEAD the closing and negotiate the DETAILS of the docs. The brokers don't do that, the ownership does. When youre the counterparty fighting the lender, how does that not build more "credibility" as you say with the lending community rather than being an observer during the most important part of the loan process. So once you have that experience you will literally have all the relevant experience for a lender seat, aside from the knee jerk reaction of sandbagging everything the borrower sends you just because - but that's an easy skill to acquire. You'll just need to convince them at that point that you can adopt the doom and gloom and the sky is falling in every situation ever mentality and you'll fit right in on the lending side lol.
Thanks, really helpful perspective.
I think my main hesitation is that taking this role probably pushes out a move to the lender side by a year or two. Realistically I’m not sure I’d get a lender role at a platform like that today, so it’s a bit of a trade-off between taking a strong borrower-side role with a big name vs trying to move to a lender at a smaller shop.
If I’m being honest, I probably wouldn’t be considering a move from D/E brokerage into an in-house debt capital markets role if it wasn’t for the name/platform, which is part of what’s making me question it.
The other thing I’m unsure on is whether it actually gets me closer to what I’m aiming for longer term – more structured real estate credit (loan-on-loan, warehouse, securitisation). It feels like I’d still be on the borrower / financing side rather than actually underwriting credit. I wouldn’t be writing credit papers, sitting in IC from the lender side, or really getting exposure to how lenders think about risk and finance their own books.
I get your point on being closer to the detail and more embedded in deals, but I’m just not sure how transferable that is when trying to move into a proper lending / structured credit seat later on. Would be interested in your view on that.
I would also agree with taking this role, especially in this job market. Some thoughts below:
"I think my main hesitation is that taking this role probably pushes out a move to the lender side by a year or two."
Who knows how easy it would be to get your ideal lending role right away. I think in a stronger job market it would be worth the gamble, but it's pretty clear to me that this job could help you get to where you need and the brand name helps too.
"I probably wouldn’t be considering a move from D/E brokerage into an in-house debt capital markets role if it wasn’t for the name/platform, which is part of what’s making me question it."
This is a fair point, but think it's easier to go from the borrower side to the lending side rather than vice versa.
"It feels like I’d still be on the borrower / financing side rather than actually underwriting credit."
Also a fair point, but I think the combined debt placement experience plus in-house capital markets experience is related and shows you're a well-rounded candidate.
Hope you that gives some food for thought.
What market are you in and are you willing to move. The "ideal role" you described in mostly available in certain markets where banking and PE jobs are plentiful, like New York. I'm sure those seats exist in markets like Chi, Atlanta or Charlotte but it's limited.
The offer you have sounds like an amazing opportunity, though make sure the company is strong. I've seen many "large platforms" layoff half their capital markets teams recently.
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