Real Estate Investment Banking - Exit opps?
What are the exit opportunities of working in a large real estate corporation's investment banking division for a few years? Other BBs? Top MBA programs? This would be my first analyst position to date (I'm a senior coming out of a target).
mostly into REITs, that's about it, but this is only from BB's real estate group, i have no idea about real estate.
Of course MBA is always option.
no. REITs dont pay very well, that would be a step down from a BB. also, the OP was not talking about a BB. but in either case, best exit opps would be REPE. other exit opps might be developmen, RE investment sales, maybe something in the mortgage mkts...
hey i am curious, what do you mean by a large real estate co. with an investment banking division? dont think i am aware of such a thing. do you mean like cbre with their capital mkts group?
i remember a couple years ago when cushman & wakefield was hiring for their "investment banking" dept. i don't remember exactly what they did, but it was NOT at the corporate level. i.e. it was not equity offerings or bond offerings or mergers of real estate companies. it may have been structuring JVs/raising money/etc, but i dont remember.
if you want to be an investment banker, be wary of this kind of puffery in the real estate world. for example i think northmarq capital has called themselves an investment bank, and northmarq is no morgan stanley, that's for sure.
gotcha, thanks. ya, in the re world, reib = sourcing debt and equity, or what they refer to as the 'capital stack'...which isnt really ibanking, and isnt very sexy nowadays.
depends which large real estate corporation youre talking bout. some bbs have ib and brokerage groups
If it is the Investment Banking or Corporate Finance Division of CBRE, JLL, DTZ, or C&W then you will likely be working on some sort of private equity placement (JV's or fund raises), mid to small portfolio transactions, sale and leasebacks or any type of middle market real estate advisory service where you have the competitive advantage because of better market knowledge and in-house valuation services. Your exit opps will likely only be decent in boom years where you would be able to transfer to a better investment bank or in REPE, but crappy in a downturn. At the more senoir level in london there was a JLL director who moved over to MS as a managing director in REIB (although this is only one data point).
I would say that you are not as competitive for an MBA as a BB analyst / PE associate.
You might need to clarify a bit more on lage real estate corporation if you want better info.
Question about Real Estate Investment Banking Exit Opportunities (Originally Posted: 06/15/2014)
I have one Q which I cannot find a clear answer too (I'm sorry if I sound quite stupid in asking this, but I'm quite new to this industry!)
If you work in a BB investment banking real estate advisory group (fresh out of undergrad as an analyst), what would be your exit opportunities?
I've read from many posts that REIB >> REPE would be the usual route, but also heard from others that the skill sets don't quite match as in REIB, you do valuations mainly on corporate (not the asset itself) whereas valuation is more asset-focused in REPE.
Also, it is impossible to go from REIB >> generalist PE?
Thanks in advance for your input!
I know someone who did, but he said he had a connection/knew someone. i suppose if you changed your mind, you could lateral to another industry group and stay within banking a little longer.
The first statement really depends on your bank and the deals you get staffed on. When you are dealing with a small private portfolio of assets, you will be doing be asset level work. When you get staffed on the refi of an unsecured loan, well you get the idea. So, it's very common to go from REIB to REPE.
Other exit opps include REITs/REOCs, other real estate oriented companies, real estate focused hedge funds, long-only REIT Asset Management, or anything you might go to out of banking from another group (random finance-y jobs).
Yes you can go to generalist PE, it is less common due to your skill set and you would benefit from a third year in a different group usually. Best way to get into generalist PE is to do lots of work with the mega-funds and their RE groups. Just use that as your in to the firm overall.
Thanks you so much for all of your thoughtful responses! :)
bump for more responses
Real estate IB to HF? (Originally Posted: 08/09/2015)
How difficult/easy it is to make the jump compared to more "traditional" coverage groups? Specifically to L/S equity and DD funds (to generalist or non-RE groups within those funds), and coming from a BB REIB group.
In theory, it doesn't seem that hard, since from my understanding HF's care more about raw ability, but I virtually never hear about RE IB analysts making the jump to HF, (most seem to end up in REPE post-banking). Maybe there is just a lot of selection bias, or maybe HF's actively prefer non-RE analysts over RE analysts, I'm not sure.
I'm considering both PE and HF as exit ops from IB, but I am getting the feeling that my options in HF are severely limited coming from a RE banking group. RE-focused HF's or REIT groups at multi-strats come to mind as possible options, but again, I feel like my options are very limited because there're just not too many of those kinds of funds/groups out there.
Anyone successfully made the jump from REIB to HF? Or know of anyone who has?
Interested as well. Thoughts anyone?
Real Estate IBD Exit Ops (Originally Posted: 02/24/2012)
As the title says... what are they? I'm talking about Lower/Middle Tier MM Real Estate group here. I've heard that exit ops for real estate aren't that great but never really heard any specifics so was hoping you guys could give me some insight.
Even at a lower/mid-tier firm, I'd still say real estate PE or mezz, real estate arm of a hedge fund. I've seen guys go to work for REITs. Plenty of interesting RE stuff you could do, but it would probably be hard to switch out of the industry. I think this has been covered in old threads
RE IBD: Are the Exit Opps Really That Limited? (Originally Posted: 05/23/2013)
I have seen discussions relating to this topic before, and I have read through them, but I am going to get a little more specific with my questions. I am about to embark on a RE IBD Summer Analyst role at a BB and was wondering if what I read on this forum is correct - mainly that the only exit opps from this field of work are REPE, RE concentrated HF, REITs, and the like.
I know RE is very industry specific, but the thought of sticking with one industry from college through the end of my career is, quite frankly, scary for someone at my age. Don't get me wrong, I think I like RE from face value, but how much can we really know at this point? Would it be challenging to get interviews from other groups next fall because of this? Likewise, if I do a two year stint at a top tier place, is there any shot of transitioning to corporate work (IBD, PE, Mezz, HF, anything buy side)? Finally, would the old "Grad School Career Change" or intense networking (within and outside a firm) give me the leverage to potentially flip my industry?
I find it hard to believe that once you're in RE, you're always in RE. Not that it's a bad thing, I wouldn't know yet, I just want to iron out all the details prior to starting on this path.
Thanks in advance for your responses, they are much appreciated.
If it is only an internship I have a very hard time believing you will be stuck in RE. That is assuming you so easily get a FT offer in RE. Wait for someone else's definitive reply, but I am going to assume that unless this is FT, then you don't even have to start worrying about being stuck in RE.
In my experience (different situation but ball park) it is definitely more difficult but not impossible.
Its just that the market is so damn competitive right now. In my view most finance roles are not rocket science. I mean just because you do RE banking for two years does that mean you are incapable of doing the work in a generalist PE firm? Not at all but look at it another way, if the PE firm has you and another guy, similar credentials but M&A instead of RE who will they go for? Usually M&A guy.
Now having said that it is no means a deal breaker...BB name will open all sorts of doors.
One thing I am starting to realise more and more as I go through my career is that if you truly want something career wise and its not completely off the wall you will get there...just sometimes you may need to take a few more steps than you would like. e.g. RE banking -> decent PE firm -> amazeballs PE firm rather than M&A -> amazeballs PE firm.
Also the big advantage you have is it opens a whole new field (REPE) that can be potentially very tough for somebody to break into without the right experience.
Top offer, congrats and don't sweat it...you will get to where you want to be when you figure out where that is.
Thank you for the responses. I am not trying to count my chickens before they are hatched, so to speak, I just want to get a feel for the possibilities. Looking forward to further opinions on the matter.
It's just SA dude ...
As an incoming summer analyst going to a BB you should still have some maneuvering room if you want to make a switch out of real estate. At most banks, if they give you an offer at the end of summer, you can often opt to switch groups. This can be a very tricky and political process, and you should never let on any interest in another group until you've secured an offer. If you are able to switch into a generalist group for full-time (either at your current bank, or laterally), then you'll be in position to recruit for generalist type PE opportunities. Of course, at some banks, opting to lateral to another group could result in you ending up in another niche-y sector like FIG or Power, where you might regret not sticking in real estate.
If you end up in real estate full-time, there is a very good chance you will be tracked into this sector, but based on your original post, it seems like you might be missing the big picture for the underlying reasons here. If you absolutely hate real estate, there are tons of jobs out there for ex-investment bankers who want to do something else. Also, you can generally lateral as a third-year analyst or associate to another sector within investment banking (or move to another bank in another sector).
But if you want to move to the buy-side, and specifically private equity, you're talking about a fairly narrow subset of highly selective firms that have their pick of IB talent. The best firms generally don't like to hire associates, and they generally don't like to hire MBAs without pre-MBA PE experience. In other words, PE firms generally like to hire--and get their pick of--the top analysts in relevant industry groups. If you perform decently well as an analyst in the real estate group at a bulge bracket firm, there is a pretty good chance you can get an offer at a top RE PE fund. In general, unless you hate real estate, that offer is probably going to be a lot more attractive than going to some second or third tier buyout or mezz fund that's struggling to raise money, or slaving away for four more years as a banking associate in another group, or going to get your MBA with no buy-side experience.
SA wise, I doubt you're going to limit yourself.
If you do a FT 2-3 year analyst gig - most likely pigeonholing yourself.
Thanks for your thoughts and advice, it is very helpful. I am learning a lot from your comments. I know it is just SA, but the time to think/build a strategy is before the fact, not after.
So from what I gather -- nothing is impossible, but it is more improbable to move to a generalist PE spot after doing something as specific as RE. But wouldn't something like FIG be the same scenario than? I would think that working on Gaming/Lodging deals would be even less pigeonholey than FIG. Also, would it be easier to get into a generalist role at a MM or even smaller PE type gig, since these are not as structured (to my knowledge).
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