Should I try break into CRE or IB given the state of the market?
Title sums it up. I really wanted to work in RE acquisitions but given everyone saying that CRE dealflow has slowed down, I think recruiting for IB might be more worthwhile. The goal would be REPE.
Background:
Ivy, 4.0+ GPA
Worked at prestigious law firm
Recent grad 1+ year WE
0 finance experience
What do you all think I should do?
If you absolutely cannot get anything in RE, then I think lateraling from IB later on is doable. Buying companies is much more complicated than buying buildings and people will know you work hard.
I worked at a REPE for a very long time before switching to a corp dev role a couple months ago, so I'm not talking to brokers everyday still but can offer the following advice:
Transactional roles in finance (brokers, acquisitions in REPE, PE, and IB) are very cyclical and there are times like the past 18 months and next 6 months or so that deal flow will lull. If RE is your end goal then being bored at work for a few months shouldn't be a deterrent for the next 20+ years of a career. That said, it will be harder to find an ideal landing spot that would be a great match for you as you would have less spots available until deal flow starts picking up. Conversely, deal flow for IB is also down significantly, if not more, and they are being laid off and not receiving bonuses (or as big as previous ones). The base salary and leaving options open to you for larger PE firms that have RE arms would be the only real reason I can see for IB over REPE at this moment. RE is one of those industries that rewards time in the system over anything else as it is so niche and intricate that it takes years to learn the nuances of a great deal and a deal that is just lipstick on a pig. I would suggest that you start down the RE path sooner rather than later if that is truly where you want to end up.
Would you mind explaining why you left for Corporate Dev? I'm assuming it was fairly difficult to transition but were you looking for Corporate Dev specifically or just looking to exit RE industry?
I left for corp dev because I wanted to work 40 hour weeks and still get paid very well. Even at REPEs I was working 60 hour weeks and traveling a lot for work so where I'm at in life with a family I wanted to spend as little time at work as possible. The F500 company I'm now working at has a large RE component to the business model and so doing strategy and acquisitions while working very relaxed hours is great.
It actually wasn't a hard transition at all. Financial modeling is very translatable across all asset classes, with the caveat that terminology changes obviously. I didn't necessarily want to leave RE all together, but outside of REITs/Dev/ or REPE there isn't really the path to maintaining a healthy salary in RE and those roles aren't easy to come by currently and almost all of them would still have 60 hour weeks and traveling involved.
IB slowed down too…so….
anyway - if you want to be in real estate. Go for the acquisitions role. Or go for an asset management role. Or go for a real estate brokerage role as an analyst on an investment sales or capital markets team. Don’t go do IB bc it sounds like a good role. You don’t want to do IB. You want to do RE.
Have you seen acquisitions hiring picking up?
Haven’t been in the market so can’t tell you. But based on transaction volume, it’s going to be slow. No one is growing. Many acquisition folks do asset management and workouts in times like this and firms focus inwards.
it’s the start of your career & a tough market - look to do acquisitions/asset management/ or development. Be open. You can always move later.
This is the best time to join RE if your firm can be even slightly active IMO. If you can navigate these waters, you’ll be ahead of the game when eventually things turn around and you can’t make a deal fail.
PM me!
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