REPE Comp Negotiation
Wanted to get the monkeys take on comp for a $2 Billion Repe in the Philadelphia area. I have been in the industry for about two years doing appraisal and am switching over. I know my hours will be more but I wanted to get a reality check before I go into salary negotiation.
Run a search in the top right. Comp is all over the board but has been addressed a few times
Here's one http://www.wallstreetoasis.com/forums/starting-compensation-question-fo…
REPE is not like banking at all --- in regard to having somewhat similar comp structures.
Speaking (very) generally here...the higher the quality of the people, and the further away from vanilla transactions...the higher the comp.
What do you mean by vanilla transactions.... vanilla PE or simplistic real estate transactions? Could you clarify?
REPE is definitely all over the board in regards to comp. Primary markets with top talent offer the best structure in pay (depends on level, but experienced hires are usually somewhere around $100-$200k base + 50-100% performance bonus), and Philly is not one of them so I am really unsure how secondary & tertiary market compare.
Dont expect a 100K base at a $2B REPE unless you have several years of experience.
Vanilla, meaning core type transactions vs opportunistic/distressed on the other end of the spectrum.
Ok, that's what I thought. Core transactions are more straightforward in terms of expectations (downtown Class A CBD assets are always going to be attractive and are more commonly treated as a hedge against inflation.... less returns for less risk).
However, I do not totally agree that core transactions equate to less pay (or your statement vice versa). Look at any top repe shops. They all have a core fund. Those associates are not making less merely on the fact they focus on core vs. opportunistic. Core can get complex when they transact at the portfolio level. Even at the asset level, when you are dealing with a 60 story building, JV structures, partnerships with cities, or a 99 year ground lease with transportation authorities, core can get just as complex as any opportunistic / distressed transaction. It's just a different type of complexity. You don't need as much of a "vision" compared to ground up development / repositioning assets.
EDIT - Not all shops have a core fund, but a lot allocate a % of their funds capital to core investments. Some even have their own funds dedicated solely to core. Oaktree has been very active in opportunistic RE and as well in distressed debt, and they have been vocal that core is not their focus. I am unsure if their vintage funds had a core allocation, I honestly would be surprised if they didn't.
You are correct though, BX is an active core player and a significant amount of their BREP VII $14b fund has a core allocation to it. Off the top of my head, they have closed on a few large transactions (100 Montgomery in San Fran, $100m+ transaction, Howard Hughes Center in Vegas, $300m+ transaction)
C'mon, dude. I'm talking in generalities here.
Generally, the further out the risk curve the transaction is, the more technical it is. How many people can buy Class A in NYC vs turning around a heavily distressed portfolio?
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