How frequently does this happen? I know it’s typically the other way around but I’ve never worked IB and am considering it for a couple years at the associate level until I move back to the principal side at the manager level (equivalent to VP at a bank).
My biggest gripe is that I feel like REPE/REIT pays much lower than IB at the non-manager level outside of NYC, which I am not located and have no interest in. For example, REPE in Chicago pays roughly $150k-$175k all in with 3-5 YOE (non-manager), while NYC seems to be in the low 200s which is in line with IB SAs and Associates.
One big consideration is that all of our DCM bankers are out of NYC so I don’t even know if there are teams within Chicago.
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Real estate private equity to real estate investment banking, happens all the time, however, the work you do is very different.
In real estate private equity it’s asset based in real estate investment banking, you’re valuing companies, and you’re looking at things from FFO/AFFO, premium/discount to NAV, and Price/Nav versus properties at price per square foot, or NOI/Cap Rate. Also, the transactions you’re working on are much different. With real estate investment banking, you’re providing Sell side advisory services to reits, mainly follow ons, secondary offerings, IPOs, and the odd time you may do a privatization of a public reit (may not be too common in this market.
So all in all, it’s not the same. Working in real estate private equity will give you the real estate knowledge, but unless you’ve worked at a large real estate, private equity firm, that may partake in a privatization deal of another, in the odd time the work experience is not the same, and the learning curve will still be there.
This is the same kind of question when someone asks if they can go from brokerage to real estate investment banking. It’s not the same.
Echo’ing everything said above.
I switched from REPE to REIB and the skillset I’d say is completely different. My previous fund didn’t do any REIT privatizations (given the size).
REPE helped me develop a strong understanding of the asset class and how value is created. REIB is providing capital markets exposure and how REITs and the public markets view real estate.
Modelling is obviously different as well. I went from using ARGUS digging through leases, rent rolls, recovery profiles etc. To utilizing filings, investor presentations and honestly what is available publicly to produce various different models and outputs.
Which role did/do you enjoy more and why?
Enjoying REIB so far - I find I like the capital markets and banking more in general. I found my work more fulfilling and interesting in REPE - development, touring properties and underwriting portfolios was a ton of fun.
Still at a crossroads if I want to go back into REPE and build a career there. Bankings been helping me develop a great skillset
Happy to answer any other questions
Sorry to throw a shotgun blast of questions your way but I was hoping to make a similar transition, however from the institutional capital markets side at JLL/CBRE.
Does this seem doable? I personally haven’t seen anything on LinkedIn.
How’d you make the switch/recruit? Did you go back to school?
Did you find your opportunity through a headhunter?
What was your timeline on making the switch? I’m personally 1 year into my career doing IS/d/e placement and was hoping to switch sooner rather than later.
Thanks a lot dude!
1) I believe so, if you're trying to do REIB, those firms will know JLL and CBRE. I highly recommend when you network, explain what you do so they fully understand what your day-to-day and responsibilities. A lot of bankers I chatted with (esp. in non-RE groups, had no idea what I did - I found that once I provided examples of what I do, it'd helped the person gain confidence in my skillset)
2) I went to a target, switched after my first job out of school. The early the switch, the better. I learned on the fact that I was a kinda-recent graduate
3) No, pure networking. I'll be real, I shouldn't have been in any IB process just based on paper. I hustled a lot, I networked, kept a tracker, study the technicals everyday after work and on the weekends. I knew I wasn't anything on paper and it was critical to show them what I know through the interview
4) I switched after 2 years - I highly recommend you switch earlier, it's easier and you can always go back
Hope this helps.
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