Thoughts on CRE Debt Brokerage out of UG?
Graduating this spring from UG and have two offers on the table:
Join a small but reputable CRE debt brokerage shop as a business development associate (1 year timeline until promotion to CRE mortgage broker). •Shop is asset class agnostic, focuses MM but has done deals 500M+. •First year pay is abysmal, but the guys 1-2 years ahead of me seem to be clearing 150K with top performers clearing 400K.
T2 Strategy Consulting (Think Kearney/IBM/L.E.K/ZS) •First year TC ~ 95K
Both offers are in a T2 city but practice across North America. I have a strong interest in both fields, however I'm worried about being immediately pigeonholed out of UG with brokerage.
How are debt brokers regarded in the CRE community? REPE exit ops?
Happy to provide more details if needed, any advice/opinions are welcome.
Thanks in advance!
You’re 22. Worst case scenario is you don’t like what you pick and you move industries. Won’t be hard at all. Either way - debt brokerage is a good starting point. In one year you can leave for something else (in, or out, of industry). Being a broker is a great park to learning the market and sales is one of the most important things to learn in your career. Even if you’re not in sales, you’re in sales. You’re always selling yourself.
If you choose to go the brokerage route, just understand what the role entails. Will your job be a ton of cold calling? Or more execution. Just understand what you’re getting yourself into and if you think you’ll enjoy it.
Thanks for taking the time to comment. This is really solid advice.
I’m still unsure of which path I’ll end up taking but I agree 100% that learning how to sell is key.
I believe the role is ~ 80% cold calling and ~ 20% underwriting/admin work and is 100% commission based. Not super enthusiastic about it, but it’s only for one year and then I’ll be cleared to mandate my own deals which I am passionate about.
Think of where we are in the market too, interest rates are very high who is getting debt? No owner is closing loans right now even if they want to. People are delaying deals so just FYI for the 100% commission role. Someone from Marcus and Millichap in NYC told me to expect 1 year of no income, even there there were people 1 to 1.5 years in making nothing and they really train their people.
T-2 Strategy Consultant all day.
I would only consider an institutional brokerage team, as the exit opportunities are far greater than a small boutique
Yeah, consulting is probably the better choice. Appreciate you taking the time to comment.
The only thing making this decision so hard is that I would have the opportunity to run my own deals in a year if I joined this brokerage shop. They explained that in most institutional shops you will do 5+ years as an analyst/associate before you get client exposure or the go ahead to run your own deals. Do you know if there’s any truth to this?
I had client exposure less than ~5 weeks into the job and can originate deals (I’m assuming this is what you mean by “running deals”) whenever I want. It’s much easier said than done.
I saw your other comment about 80% cold calling. My guy, do not take this job. If you were smart enough to get into a T-2 consulting firm, you’re smart enough to not work at this chop shop
Do 23 year olds really get exclusives? I deal with some sharp and experienced ppl that are begging to get hired. If it’s hard out there for them I could never understand an owner going with some kid. Genuinely asking as someone that’s in debt brokerage (but want to get out bc I don’t see the future in it)
It all depends on what you want to do long term. If you want to stay in real estate, go debt brokerage. I’m at a more institutional lender and wish I went smaller. The debt brokerage role you are discussing would by no means a “chop shop” as another poster mentioned above. You’ll get amazing experience and surpass the pay of a consultant within two years, if that’s what you’re worried about. I wouldn’t worry about pay at the start of your career, but more about the quality of work you’re exposed to and who you’re working beneath. Exit opps are retarted. All of the money is made on your own, not at some “MF REPE”
I was the one who mentioned chop shop. Sorry but “80% cold calling” is a chop shop.
Debt brokerage is a brutal business. Good sponsors don’t need brokers for bank loans and if they choose to hire one for a mega project it will be Eastdil. Agency loans are incredibly lucrative but good luck getting a piece of those without putting in many years under an established producer (who you’ll probably end up fighting for business as he clings to clients with one foot in the grave).
Good read. Any idea why sponsors would choose Eastdil? I thought it depended on region.
I’d say go to the debt brokerage. Find a good mentor, learn as much as you can and try to get into a production role as soon as you can. Try taking on sub $5mm small balance deals that the larger brokers don’t want to deal with. Get as many “reps” closing small deals as you can get.
I’m 34 now and entered into the debt broker side of the business when I was 29. 2021 and 2022 have been insanely productive years and who knows if they’ll come back, but for certain personalities, brokerage is a lot of fun (but challenging) and lucrative. The likelihood of making $1MM+ in a year before you turn 30 is much higher as a broker than almost any where else in the business.
I spent almost all of my 20s screwing around with trying to be an investment banker, then going to go work with a large prestigious repe fund. Wish I would’ve realized earlier that the most rewarding positions in the industry are people on commission or with ownership in the deal/project, etc.
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