In your opinion, what makes a good role in CRE? Seen a lot of members mention that they are in "good roles", curious to hear people elaborate on why their role is good. On the other hand, if you don't enjoy your current role, why not?
I'm not trying to compare Development vs. PE vs. Brokerage, more so good development gig vs. bad development gig. I'm interviewing at development/ PE firms and trying to determine the best job opportunities.
Strong deal flow
Fit well within the office culture
Working in a market you want to be in
Steady work/life balance
I would add to this - a defined path to equity participation.
Lots of things are difficult to gauge but if they have a strong track record of completing deals then at the very least you will get good experience
Good Development Gig:
Bad Development Gig:
>Market comp with potential carry in the future
Does anyone here know what the comp is like at big firms in regards to this? I'm thinking Tishman, Trammell Crow, Related, etc. I feel like at such a huge company you won't start getting equity in deals until you're more senior than if you were working at a smaller firm. Can anyone confirm?
Some of the determining factors are objective, like strong deal flow, access to capital markets, etc. like moneycre said.
The rest of it is up to you as a person, for instance - some developers care about building monuments. Some couldn't give a shit.
Folks are nailing it, some broad ones that jump to mind are:
Personally, I prefer leaner investment teams, and would hate being widget #612 at Carlyle. Other folks might love that, and I totally get that, just not my bag. I want to be in the mud and the muck with a chance to be a little entrepreneurial..
Couldn't agree more with you. four more to add... 1) ethical leadership team that doesn't cut corners or do sketchy BS (can't find that out until you join the team) 2) ability to get promote/partnership in the future if you are crushing it. 3) values your opinion and implements strategies you recommend 4) politics, moron manager or liars
Just a comment on the lean teams thing. You’re definitely right that leaner is generally better experience for a junior person. But just because a fund has a lot of employees doesn’t mean their deal teams aren’t lean. At some of the large funds, deal teams consist of two people: a senior person and a junior person. Carlyle is / was deploying a $5bn fund and they do a lot of smaller deals (aren’t buying companies or massive portfolios) so I imagine their deal teams are pretty lean if they’re going to invest that money in the allotted time. If you’re using 8% of your employees (Say 4 out of a 50 person team) to chase a 15 million dollar equity check, you’re not going to deploy $5bn in 2-3 years.
Centerbridge is an example of a large fund that I know runs two person deal teams. They have a senior guy as the relationship manager and the junior guy running the numbers. Although for corporate deals / large portfolios I’m sure that number increases, especially during the due diligence phase
Oh I know their deal teams run that way, have bought and sold a lot of stuff from and to them over the years, and I just picked their name out of a hat. I know plenty of folks on larger funds' deal teams, plus most of their asset management groups, that are way more process focused/inclined to stay within their box rather than bringing some creativity or personal ownership to bear. Bought a deal from Blackstone/LivCor one time, and I'm not sure the asset manager knew where Dallas was on a map. Every shop is different and so are personal preferences... million different ways to skin that cat but need to do your own personal DD when looking at opportunities.
-Interesting work; fun; engaging -Pay that is in line with your level of experience -Working with people you like -Giving you the experience you need to get to your longer term career goals
Not a lot of comments specific to REPE so I will chime in. At the junior level, I think working a wide variety of deal types and property types is most important.
For example, some companies you work for will have a very broad mandate for their fund, or they’ll have separate pools of capital they can invest with (eg debt fund, opportunistic equity fund, core equity fund etc) and you could underwrite all of those opportunities. This means you could work on:
A preferred equity investment on a Beachfront apartment complex in Miami
An entity level, convertible preferred investment in a small but growing, private industrial REIT
Take-private of a shitty little hotel REIT (there is one ongoing now)
High Leverage Senior Loan on a portfolio of retail assets in LA
Construction Loan for a condo development in NYC
Sale Leaseback of a senior housing portfolio
If you’re going to work on the buy side as a junior person, the dream shop would be somewhere where you can screen / work on all the deals above and more. The more opportunities you’ve underwritten the more transferable your skills are or the more “dangerous” you are if you want to be cheesy.
There probably aren’t many places that can do every single one of the deals above (Eg, many funds won’t do condos or senior housing) but there are certainly places that can do 4/6 or 5/6.
If you’re on the REPE side, exclusively doing value add multi family JV Equity isn’t as exciting to me as investing across the capital stack and across all property types. Some may disagree - if you have a passion for multi family then by all means go to a multi only value add fund. But that’s my take
I have a completely different opinion. Your goal as a junior acquisitions person should be to position yourself to become a successful deal guy. That is where the real money, challenge, and fun is.
It would be very difficult to be a successful deal guy if you do not become an become an expert in your niche. I have never met a successful non-junior acquisitions professional that is not specialist. Learn one of the four main asset classes like the back of your hand and stick to it. You're way more valuable as an expert in a single asset class than you are a generalist that has surface deep knowledge of multiple asset classes.
See my other response to Bateman, I’m not talking about 33+ year olds. Being able to close deals up and down the capital stack is just more exciting to me. Certainly as you move up, you’ll specialize in a property type. But looking at deals from multiple angles and having multiple solutions to a project that needs funding - to me, that’s one of the most interesting parts of being on the PE side of RE
.
Goldman, Blackstone, Fortress, Centerbridge, GIC (probably most sovereign wealth funds), StepStone, Baupost off the top of my head.
When you’re 2-4 years out (24-26 years old), you’re not really thinking about becoming a deal guy yet. I would much rather be at one of the places where I get a super wide exposure when I’m young and then specialize later.
I agree with @JSmithRE2010" I think it’s best to be a generalist first then specialize. Deal flow, geographic diversity, product type diversity. 4/6 sectors is good. Allocating for different funds (core, value add, opportunistic, mezz, preferred equity); whatever that gets you thinking dislocation of capital, long tail, and other macro plays while analyzing the specifics of deals and jv partners.
You might be analyzing deals now that don’t make sense and you feel are higher risk but you’re following orders. See what happens a couple years from now and learn and hone your instinct.
Can you elaborate as to what REPE shops would give a junior person this type of lateral exposure?
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