I am a prospective RE grad student in NY and am interested in knowing whether it is a good idea to look for opportunities in Bulge brackets in the RE department or to look for firms where RE is the core function? Where does one see the most growth opportunity, in a renowned BB or a small/MM RE firm as a RE acquisition/debt analyst/associate? Is there more opportunity, more pay and a higher chance to move up the ladder with more opportunities in a RE focused firm whose core function is RE or are BB ahead of the curve in terms of RE growth opportunities too??
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Also do BB banks have a large chunk of workforce working towards RE deals or is it just a small group of employees working at a small number of deals coming their way as compared to a firm whose core function is RE investing??
This is just my two cents after a summer internship in BB real estate.
For the BBs I would guess that about 1/4 of their Institutional/CIB employees work in real estate. This would be split across a ton of different fields like balance sheet lending, construction lending, affordable housing/LIHTC, warehouse lending, and securitization.
I definitely do not think that BBs are growing super fast in real estate, but they do seem to be a great training ground and good for networking with fellow analysts. I think the real areas of growth in real estate are in alternative asset managers that do direct lending or have real estate debt arms.
Post-crisis and with low rates I don’t think bank balance sheets are expanding much. Add on top of this the incredible amount of dry powder with private investment firms, and a hunt for yield, this opens the door for private firms to lend on properties. One example of this is BX real estate just started some liquid credit or securitization platform a month or two ago.
The cons of joining a smaller, more dynamic private firm would be a smaller analyst class, probably less training and room to fail and grow because the teams would be smaller and more cutthroat. You would probably get paid a decent chunk more than at a BB.
Only area I have no knowledge of is working for someone like PGIM or other well known institutional investor. It seems like this would also provide a good training and networking ground like a BB. You may also get to work on debt and equity as opposed to just debt at a BB.
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