Starting my career in CRE five years out of undergrad: Brokerage vs. Development
I am a long-time reader but first-time poster and hoping to get some career advice.
For the past five years, I have been an active duty military officer. As of today, I am 90 days out from starting my first civilian job. I love the entrepreneurial culture of CRE, and I’m looking forward to starting my career in this industry.
I am 29 with an undergrad in business from a military college in the SE. I graduated with a 3.1 GPA.
I am currently considering two options, and I’m not sure which one I “want” to do, because I have limited exposure to the industry.
Option 1: Brokerage
I have been networking with some industrial brokers in my target market (a major city in the SE). I haven’t been offered anything, but I am making good progress with some guys at Colliers, C&W, JLL, CBRE type firms. This would likely be tenant rep on a draw, a lot of cold calling, etc. I am ok with this. I understand the grind aspect of brokerage in the beginning.
I’ve been advised to get a B2B sales job for two or three years before trying brokerage. I get the logic, but I am anxious to get started in CRE, and don’t like the idea of “sitting on the sideline” any longer. Thoughts?
Brokers seem to take some heat on this forum from time to time. Particularly when they are compared to REPE guys or developers. On one level, I get it. On another level, they can make a lot of money, build meaningful net worth, and have a great work-life balance. I respect that.
My gut tells me that I would like brokerage and that I could make it work long term. I realize there are a lot of variables with this though. Nothing is a sure thing.
Option 2: Short term: Construction management with a GC
Long term: Development
Development seems to be what a lot of people want to get into, and I can see why. It’s highly unlikely (impossible?) that I could break into a development role now. The plan would be to work at a GC for 2-3 years and get an MRED to break in.
I just wrapped up an internship with a GC, and they asked me to work with them full time once I officially exit the military.
The road to success seems longer in development. It seems less risky in some ways but riskier in others. It seems very hard to break in without a certain profile, but I’ve been told that the GC experience + MRED will get me in the door.
My gut tells me development is more suited to my personality but a lot harder to see success. On average, It may take years before you start to have equity in deals, correct?
I could always start with brokerage, get the MRED, and then break into development later (like a lot of other people do). Is the GC experience that valuable? I’ve gotten mixed opinions on this.
I acknowledge that there are a handful of threads that compare development to brokerage already but there are a lot of “it depends”, “do what you want”, etc.
I was hoping to focus the discussion and assume both paths lead to success (advancement to the principal level).
What are the objective realities associated with both career paths at this level?
-Income potential in the short term and the long term?
-Work-life balance
-Prestige
-Barriers of entry
-Risk
Feel free to correct, add to, or critique my current understanding of either landscape. Still learning.
Thanks for taking the time to read and respond.
There's a lot to unpack here, but some random thoughts as I'm reading through your post:
You are 100% doing the right thing in networking with people in your target market. The #1 response to how to get a job in real estate is always "networking." (The #2 is have a rich dad in real estate, but technically that is also networking.)
I do not think that you need to get a random B2B sales job in order to "learn sales" before you get into brokerage. You are not a kid right out of school who needs to become a professional - you're almost 30 - so as long as you understand how sales works that will not be an impediment.
The three things that matter most as an entry level tenant rep guy is your firm's position in the market place in your product type, the broker you work under's reputation, and how the team is structured. The first is a bit more nuanced - CBRE may dominate the market in general, as an example, but the biggest office player is a JLL guy, so it helps to find out these type of details. The broker you work under works this way too - most deals will be on the back of this person's experience and reputation, so you don't want to be at a top shop but work for someone who isn't regarded as a top individual. Finally, how the team is paid matters to your bottom line. Do you get commission on deals the team executes or only on deals you're personally involved in?
Brokers take some heat on this forum for a number of reasons, one one of which should really matter. There are a lot of highschool and college kids who browse this site who think "prestige" matters more than money because they've never had to pay a bill in their life. There are also people who were interested in investment banking or management consulting where people jerk off over prestige and think that translates to real estate when their interests shift our way. Likewise, there are people without any social skills who couldn't sell food to a starving man who look down on sales in general. The only one that should matter to you is are you cut out for sales, because that's different than being cut out for real estate. I did not have the right personality for brokerage and got out after a year but am now a development manager. Like most things, real estate is all about finding the right role for you. Yes, in my opinion, being on the ownership side is preferred to third party because you are the ultimate decision maker, but that's a personal preference.
It would be difficult to break into a development role without any real estate experience. This is hard for 22 year old kids only asking for $45k a year and for you it would be much more difficult - not that you shouldn't at least try.
GC experience is undoubtedly valuable, particularly on the PM side and if you're with a more professional GC group vs. a back of the pickup truck crew, and junior PM experience plus a MRED will go a long way. If this is your route though, either of these two for a year or two and then a MRED will lead to similar results.