REITs - Typical deal structure

Folks in REITs, can you please answer if REITs have some sort of fees and promote structure set up like the PE folks? How do REITs typically structure their deals and allow themselves to get from deal-level teens IRR to the monstrosity returns REPE folks get?

 

Not really fair to compare mega PE and VC to real estate due to the relatively small deal size of real estate. A 1bn middle market PE fund targets 30%+ IRR where as even the most opportunistic RE funds are targeting the low 20s

Fuckin my way thru nyc one chick at a time
 
Best Response

Generally speaking, REITs have a fee structure whereas a REPE/opportunistic fund would have more of a promote/participatory structure, for obvious reasons. I've stated on other threads but there can be exceptions to the rule. This is generally due to the types of deals that each acquire and also a function of the usual investor profile. The thing I think is laughable is that wannabe hardos in college on this forum start spamming links about REITs outperforming other fund profiles when you can't compare them. REITs/core funds basically buy and hold something forever as long as it's spitting out relatively good annual yields relative to bond rates whereas the structure of value-add/opportunistic funds generally have a lifespan of 5-10 years. So of course depending on the vintage of those funds they could have vastly superior/inferior returns to REITs which are more steady state. Right now for example, people are seeing lots of funds with acquisition vintage in '06-'07 and wondering why the returns are poor. The people that say this have no concept of how the industry (and broader capital market) works.

"Who am I? I'm the guy that does his job. You must be the other guy."
 

Dolore dicta maiores et. Non voluptatem rerum natus laudantium et esse voluptas. Error quis dolorem in consequatur iure laudantium. Eius libero aspernatur ex.

Career Advancement Opportunities

May 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 04 97.1%

Overall Employee Satisfaction

May 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

May 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

May 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (20) $385
  • Associates (88) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (67) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
GameTheory's picture
GameTheory
98.9
6
kanon's picture
kanon
98.9
7
CompBanker's picture
CompBanker
98.9
8
dosk17's picture
dosk17
98.9
9
bolo up's picture
bolo up
98.8
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”