To the veterans: What was institutional dev actually like during the last bull run?
I’ve spent my recent dev internships at a couple of REITs and institutional shops, and the room constantly feels heavy. Every meeting ends up turning into a post-mortem on why a deal no longer pencils, how high debt costs killed a pro forma, or why another project is getting mothballed. For the senior guys and veterans who’ve been through multiple real estate cycles, I’m curious what institutional development actually looked like when times were good.
For the veterans who’ve been through previous cycles, I’m curious what office culture and day-to-day morale were actually like when times were good. Was the vibe in the building night-and-day when cheap capital made deals pencil effortlessly? Did the energy feel genuinely exciting when teams were greenlighting starts rather than endlessly running downside sensitivities and killing deals?
Also, on the comp side: how high did bonus pools, carry, and co-investment payouts realistically get for dev teams during those peak years? Did junior talent see much faster promotion tracks when project volume was booming? Would love to hear some stories or perspective from previous bull runs so I know what to look forward to when the cycle flips back around (hopefully lol).
During the last bull run, institutional development was a completely different beast compared to the current environment you're describing. Based on the most helpful WSO content, here’s what veterans have shared about those peak years:
Office Culture and Morale:
Deal Flow and Execution:
Compensation and Career Progression:
Lessons from Veterans:
In summary, the last bull run was characterized by optimism, rapid deal-making, and significant financial upside. While the current cycle may feel discouraging, the veterans’ stories suggest that brighter days are ahead for those who stay the course.
Sources: 08' Recession - How bad was it really?, Prelude to the Next Recession, PE long-term attractivity: Is the trodden path "broken"? Quo vadis gen Y?, Distressed Investing: This Time It's Different, Distressed Investing: This Time It's Different
Bumping because i want to hear some stories
Vibes were great because everyone knew they'd be making money. One deal we did was so good that the owners flew everyone and their wives/girlfriends to the Bahamas out of pocket. We rented boats and floated around the islands for a week. Heli-skiing trips, impromptu luxury boxes at sporting events, big fishing/hunting trips for guys who were into that, strip clubs with VIP rooms for guys who were into that, most work trips included $200 per person meals and drinking until you passed out on the company dime, lots of golf, owners handing out additional bonuses on top of allocated equity checks just because they were feeling generous and liked seeing the smile on juniors' faces when they got a big check. It was great.
The downside was that when people can't fail, all sorts of bad habits get learned. There were a lot of dogshit deals that made good money when anything made money and now those people don't know how to deliver a good project. And juniors definitely got promoted too fast. You can see that now with how many middle aged morons are in MD roles even though they don't have the experience. I guarantee some of your bosses got promoted from analyst to associate to VP to director without ever seeing a project through from inception to disposition. You think they know more about development than they actually do.
Do you think such will ever return? I am trying to see the light at the end of the tunnel. Is it cope to believe it will? others have told me these perks/insane bull runs are over.
No, but something else cool will come up in its place. Real estate is like the third oldest industry after prostitution and war. The next bull run won't look like the last, but that doesn't mean it will be any less lucrative.
Even now, reading this forum, I see a lot of positivity in sectors like retail and low income housing. Someone was even optimistic about Class C and Class B office the other day. Don't let us 30 and 40-year-old multi and industrial guys bring everyone down by bemoaning the good old days. Deals will happen. You have a long career ahead of you.
It will all come back around, because that behavior is hardwired into people, not the real estate industry. Any field which has a boom experiences that sort of shit.
The way in which people make money in real estate will change. Capital stacks will come together differently. Different product will get built. In that sense, the last bull market was exactly the same, in that the easy wins were coming from a different place than they had been 15 years previously.
This forum is full of young people, and in general people who haven't lived through multiple cycles are fucking awful at maintaining perspective, but real estate is and will continue to be lucrative, just like finance was and still is despite regulatory and general environmental changes
The biggest difference to me was the energy. You were motivated to work because you knew the deals you were working on had a decent shot to make money. And they usually ended up making more than you thought. There were generally good vibes all around. Then COVID killed it. It got reignited again in early 21 into late Feb 22. But then the Russia-Ukraine war happened and it was gone just as quickly as it came.
I have always been an acquistion guy but we want heavier into development in the last cycle. it didnt matter if you were over budget or projected delivery got delayed by 3+ months. Lower interest rates and cap rate compression made every deal at least a double/triple
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