REIB Worth it?
Been thinking this for awhile. Say you are like me and a second year analyst at a lender/debt fund, and of course have a buyside goal (acquisitions / asset management).
Would you go into REIB if you couldn't get into REPE? What opportunities does REIB offer that a debt/equity shop or debt fund can't offer? Would it make sense to go from d/e or debt fund --> REIB --> REPE? Is that even possible or worth it?
I'm getting concerned that there are / soon to be many qualified applicants for limited CRE roles in the future and it's getting harder to stand out. The path to buyside isn't what it used to be now that ivy leaguers are in the industry now. How could you bridge this gap, preferably without a Masters? And please save the networking comments, I am well aware.
Thanks
I did this. Went from lending to REIB. Two years in and I don't regret it. It boils down to what types of deals you're interested in, what types of REPE firms you'd like to work at, how much you value the optionality that IB gives you (worded differently: how committed to RE are you?), the quality of the debt fund you're already at, and how much you value current compensation.
1) Do you like working on single asset, value-add or opportunistic deals? Stay in lending, you can get there from a debt fund easily. Would you rather work on M&A, IPOs, Entity Level real estate investments (EG PIPEs, preferred equity investment into a private REIT, programmatic JVs), large portfolio sales? REIB would be more exciting to you
2) This could probably be combined with #1 because it's the same question. If you want to work at a REPE Fund that has the ability to do entity level investments, platform deals (investing into a management company or vertically integrated owner-operator and helping them scale), REIB has a better probability of getting you there compared to other areas of RE. If you want to work at a developer, I don't see the benefit of doing REIB.
3) Optionality - from REIB you can move to any area of real estate, nothing is really off the table. I've seen bankers leave as analysts and associates leave for REPE, development, REITs, Hedge Funds, Debt Funds, owner-operators etc. At VP+, I've seen mostly REIT exits into a role that isn't necessarily about chasing deals; there's usually a corporate finance component to it. Or if you decide real estate is not for you, being in the REGL group at an investment bank gives you the option to lateral to more traditional IB coverage groups, and leave the industry forever.
4) If you're already at a quality debt fund (ACORE Capital, Starwood Property Trust, Benefit Street, one of the big publicly traded vehicles like Apollo's REIT), I don't see much value add to doing IB unless you're very interested in entity level deals or you place a high value on the optionality outlined in #3
5) If you value how much you get paid today, REIB is a better option than most RE jobs. Changed my mind and don't want to get too specific here, but you can expect to average somewhere between $130k - $170k per year during your analyst years.
Hopefully this outlines it for you pretty well. On recruiting, yes it's possible to go from lending -> REIB -> REPE. Don't want to go into too much detail about recruiting, but I got looks from firms that ignored me when I was in lending
is this transition possible from a bank like capital one that does balance sheet lending ? very curious about this!
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