What is the REPE dream job
Hi everyone - I am currently an analyst at a top real estate investment bank on the street. I wanted to hear everyone’s opinions on what the “dream jobs” are for people interested in real estate private equity. Is it being an associate at Goldman Sachs merchant bank, associate on the buy side like Blackstone or Starwood, taking a larger role at a mom and pop shop. Etc. Obviously this is very open ended question and depends on the individual.But looking to hear what my fellow friends on the forum well generally think has the best of the best from here. I’m considering overall pay, scope of work, perks,hours,etc.
Whatever job makes you the happiest, they’ll all pay relatively well. There’s no point being at [insert prestigious megafund], earning an outsized comp package and cool perks if you’ve no time to enjoy it and all your holidays are destroyed by deals or pls fix, thx emails unless you’ve some clear end goal for what will make it worth it and how that position gets you there. If that is the type of environment you like, then congratulations you’ve found the job that makes you happiest.
Think through what you really prioritise and then go from there, you’ll struggle to find a role that pays well, is prestigious, has low hours, and great perks. Prestigious employers will generally use their brand to either overwork you or underpay you, occasionally even both.
Below is my list of priorities in a job. Obviously this differs by individual so there’s not a one size fit all answer.
Pay is least important for you?
It’s the least significant consideration of the 5 above for me given reputable funds pay relatively well. Will an additional 20-30% from a sweatshop make you that much happier when you’ve no time to enjoy it? I’d much rather be looking at deals I find interesting in a good work environment and have enough free time to live a life outside of work while earning $[200k], than work until midnight Monday to Friday + work most weekends in a poor environment where I earn $[250]k.The additional money won’t offset the sacrifices in other considerations for me.
Image result for what is a good job
Most people would say a good job is one that comes with a nice paycheck, reasonable hours, a healthy and safe work environment but in m words a good job is something which gave you inner satisfaction in your life
Ignore that guy telling you to do what makes you happy. Correct answer is b) buyside role at BX or Starwood
^this, only way to earn respect from WSO randos!
Exactly, this is wso, not group fucking therapy. The guy asked about the biggest and best job in the industry not a lecture on healthy values.
100% would be a soulless associate for 2 years just to get the BX stamp
This. Anything below the Top 10 on the PERE 50 list is back office af.
Ultimate dream job? Doing my own thing, working for myself/running my own fund.
Short of that, I'll take a position at a nice chilled out institutional investor that can give you some carry. Decent pay, no backbreaking hours.
Not re
You’re in ER, I don’t think you have the prestige points necessary to make fun of RE.
signed, 'prospect'
lol ER loser
I believe running your own firm, with someone like Blackstone providing the capital, is the dream for most people. This route combines the highest personal earning potential with the lowest amount of hours worked per week.
If you Linkedin stalk the heads of major developers and REPE, you'll see that many more eventually go off on their own compared to traditional PE or IB shot callers.
This but for me replace Blackstone with sleepy, extremely well capitalized family office and we're good to go.
100% this
The best operators work MF hours, make better pay than MF, and use the MF's money. DEFINITELY not the lowest amount of hours worked per week.
Which operators are paying associates $250k+? I would definitely be interested in working at a place like that
Relevant to this topic, the consensus for the dream job in REPE to simplify is either 1) become a principal or MD + earn carry on deals at a MF or large REPE 2) Start own REPE, dev shop. There has been a lot of discussion/opinions on what are the best places to start as an analyst in the business to achieve those goals. Yes, sure this is an inherently subjective discussion - people "make it" from all different walks of life. But for the sake of argument, great to hear from someone who feels they have a confident take on this question - would be nice to see what people think.
Potential starting points to be ranked (no particular order, please include relevant title I missed) :
1) REIB at BB 2)MF job at BX/SW,Carlyle out of UG 3) Acquisitions Analyst at REPE 4) Asset/Portfolio Management at REPE 5) IS at a top brokerage CW/JLL/CBRE 6) Middle Market IS at Marcus Millichap, B6, Meridian 7) Tenant Rep/Landlord Rep Leasing at a Top Brokerage 8) Big 4 RE TAX Advisory 9) Regular IB at a BB 10) Family Office Underwriter 11) Credit Analyst at a top 20 bank 12) loan underwriting for 10M+ 13) Mezzanine, Debt Underwriting Analyst 14)CMBS Analyst
Aplogies if some of these titles aren't fully correct. Regardless, would be fun to hear people's perspectvie on comapring all these starting roles.
Would you include MF job in debt with #2?
Isn't B4 RE Tax Advisory a bit niche?
Debt broker at Newmark
Jobs are for pussyass losers.
The real REPE goal is to marry the daughter of the founder of a 20B AUM REPE firm
Many paths traditional and non traditional will get you a decent life and comp in RE. There is no one answer and it is based on a variety of factors custom tuned for each of us. Not trying to generalize bc it depends on so many diff things, but given you guys love generalized lists see below.
Staying in top REIB at a top shop that is not working on useless pitches all day (65-90 hours): MS/GS/BAML/JPM or the actual REIB groups of ES/JLL. You can earn great pay as you move up and great fee based revenue stream (you earn fees on deals without having capital at risk). Analyst years: 130-210k Associate years: 200-350k.
REPE: (60-70 hours) Top shop if you love chasing deals and want to look at everything and anything - BX/Starwood/KKR/Brookfield. Large/Medium sized shops with a more niche approach focused on concentrated thesis driven bets - Centerbridge /Baupost /Bain RE/ Cerberus. Then other players who are well capitalized and do cool ass shit - too many to name. But 2-4b AUM either family office or fund format and provide LP capital. Associate years: 200-500k depending on shop.
RE Dev/GP: (50-60 hours) Great if you want to learn closest to the asset level and love the granular details of the biz. Strong drop off in brand/comp/quality of peers after Hines>Related>Tishman>Greystar/Trammell>Anything else. Associate comp: 200-300k for Hines (skewed bc typically post mba hires + carry early on) 120-180/190k for all else (Tishman lower end here and Related higher end). Some outliers focused on niche like RFR etc. pay outsized as well 170k+.
What else do you know about Hines? I work there so I'm interested in hearing more about it.
Wow, 300! I recently wrote, "I would be shocked if a 2nd year associate at any development company hits 300". Sounds like you're saying that includes carry (i.e. non cash) and is, overall, only achievable at basically one firm (Hines) ... but still, impressive.
the range I heard for an associate post at Bxmt is $250k- $350k
Can you expand on this? Would love to hear some top shop family offices
“Then other players who are well capitalized and do cool ass shit - too many to name. “
This is rather inaccurate. I interviewed for a Dev Associate role at Hines NY office a few months ago and was told the pay for Associates is 145-155 + 30% bonus. No carry until Director (next promo) So barely brushing 200k, and that’s with the NYC premium.
Even once you start getting that carry I’m not sure how meaningful it is - vesting period aside you’ll have to wait for the promote to actually hit which will take a few years in the best case scenario. Meanwhile you’re at the Director level upward mobility is incredibly difficult from there.. there’s only a few other seats above that. It could be 8-10 years before you really take another step up the ladder. Which is why I think most people leverage the brand equity and jump ship - hence; not taking full advantage of the carry comp.
Point is, I’m of the opinion that the Hines/TCRs/Tishmans of the world should be viewed as resume-makers, NOT career-makers. Unless you get super super lucky and happen to be rising at the same time a true leadership position opens up at one of the regional offices.
Just go work for @ozymandia and earn hundreds of thousands, maybe millions, in cash comp while you wait for your carry.
Agree with this. I actually interviewed for that role as well. Can confirm the comp was 140-150k + 30%. I can also say that I know comp moves up pretty quickly there as I have a few friends at the firm. With that said, it probably does get very difficult to move up post director level due to not many seats. It did seem like an awesome firm. As another aside, when I asked about comp on the interview, HR said to me verbatim, you don’t come to Hines to make money when you’re low to mid level, you come for the experience and the money will get very very very* good as you get senior due to long term incentives.
Bump
Owning and managing your own fund with blindly faithful investors and a team of sweaty VPs/Associates
Not merchant banking. I personally view bx, starwood, Carlyle or elite MM to be a lot more desirable.
Principal at an entrepreneurial boutique shop with a wide mandate.
REPE is a way to make more than most alternatives. More than lending; more than brokerage (on average); etc. But it’s a farce. One day at your annual review you’ll finally get some carry. You’ll think you’ve made it but you don’t really realize the reality of the situation. Read everything on this site talking about how carry is the holy grail. Points only really matter if you’re the head honcho with 70 points or whatever. It’s not a hedge fund where your carry is calculated and paid each and every year. It’s real estate. You’ve got a $500m fund and half a point of exposure. Lets say there’s a soft hurdle of 8% (meaning there’s a full catch up mechanism so it’s possible for the GP to actually take home 20% of the profits). Let’s say it’s an opportunity fund and you somehow actually invested at a clip of 20% IRR post operator/developer promote in this low yield world. Ok, you hit it out of the park and double the equity so the carry is worth $100m. You make $500k. Let’s put aside state and local taxes, which probably are high, and forget that they are going to probably close the carried interest tax loophole in the next few years (ie while you’re investing). Fund lives are 8-10 years long (!). (!!!!!). Discount your half a point at a reasonable cost of capital and spread it over 8 years… that ain’t so much. Now let’s work backwards through all the lay-up assumptions I gave you. It’s an 8-10 year wait time. You need to place $500 of equity in 10-15 GREAT deals, if more than 2-3 go sideways the overall take home is severely degraded. You probably encounter some major economic crash / event. You probably have a hard hurdle, so you’re getting 20% of profits over a 8%, so if you’re making 20s then that’s more like 12% of the overall profits. So probability weight that the economy crashes, or the guy/girl next to you pitches a deal that blows up the fund, consider all the other factors and then discount the FV to today and, well, it ain’t so great. Just hope you work somewhere where the funds are really big, you get meaningful allocations, and you have the tenacity to make it 15-20 years there to see 2-3 monetization events (because, don’t forget, you don’t get to keep your carry if you leave - even if it’s “vested” they can usually take back some meaningful piece). Cheers.
Could not have said it better myself. It’s great to calculate your carry on paper assuming you hit 2x equity. When it’s all said and done, you’re probably closer to 1.5x, if that, over 5-8 years. Hate to break it to you all, but it’s an uphill battle to getting reasonable carry. You need to hit so many lucky strides to make that work.
This is why I left REPE and found a commission role. I view it as a carry equivalent, but I get paid at close.
Another reasonable way is to make money is to run your own deals as the GP/sponsor/developer. If the deal goes reasonably well you get 4-6x your equity. Screw being the LP guy who has his 10% carry and gets a $100k check when the deal works out.
Seriously. I think a lot of people on this forum would be surprised by how many RE fortunes have been made by sponsors after just 1-2 home run deals.
great comment, agree with the math and starting to see high hurdles to get to a place where comp is justified for the stress and diffculity of a pe job. what do you do if you dont mind me asking? how would you compare reib in long term career compensation and also diversification of network (important for the life after IB or PE)?
hold on a second what about cash comp? those are all good points on carry, but deal guys (vp/ed level) are also making ~$400-600k annual cash too. i think it’s a stretch to call repe a farce
Delete
You sure about that? Maybe the VPs working 60-80 hour weeks at $10b funds. But a VP at a $1b fund is likely making $250k cash plus “carry”. At least that’s what I’ve seen.
https://www.wallstreetoasis.com/forums/new-new-cre-compensation-google-…
If you're only getting 50 bps of carry then my guess is you're pulling in a ton of money otherwise. To act as if it's a $250k base salary and whatever 50 bps gets you and that's that is fairly disingenuous. Fine, those 50 bps of carry are worth 500k (and remember you're getting paid on the equity of that carry, so the time value aspect isn't quite as bad as you make it out to be). But it's highly likely you're also pulling down hundreds of thousands if not millions of dollars in cash bonuses as well on an annual basis. In fact, it's likely it is much more.
So yes, you have a definite point that while carry is the "Holy Grail" and no one quite realizes how much of it you have to have before it starts looking like real eff you money, you're still making huge dollars on an annual basis. Are you going to compete with rainmakers at big hedge funds or PE shops? Probably not. I don't think many people expect to. But it's not like anyone is living in even relative poverty - pulling down $1mm+ every year with the chance of a nice payout at the end of the fund life is nice. And presumably, as future funds get raised and you become more important to the firm, you get a bigger slice of the pie when the $1b fund gets raised - maybe now you've got 75 bps.
And as always with real estate, it's also easier to go and spend 10 years at the mid size fund, and then go raise $100mm yourself and keep 100% of the carry there. Or whatever large percentage. If you have a strategy and experience, it is a lot easier to do that in the real estate world than in finance.
Please show me a data point for this:
“it's highly likely you're also pulling down hundreds of thousands if not millions of dollars in cash bonuses as well on an annual basis. In fact, it's likely it is much more.“
while you’re at it, why don’t you post a calc showing 75 bps of carry on $1b.
Assume 2x equity (top 5-10% of funds) and 1.5x equity (top 25-50%). Don’t forget to consider it’s going to take you 3-5 years to place a billion into real estate, 3-5 more years to close out. So divide that bitch by 8.
Uh...whatever will let me get out in time for happy hour?
bro u gotta get the preftige bro think about your Linkedin profile. think about the carry. the girls at the bar will definitely know RE operator brand rankings according to the latest thread. u gotta think about these things, this is why we stay at the office until 10pm
My goals differ from the vast majority of real estate professionals I’ve encountered. My dream job is to develop projects in my hometown or area that I really care about. My axiom is I want to make my 2nd grade teacher’s life better through my craft. I would rather not chase a slightly higher yield to the ends of the earth. If I had the capital that shared my vision and goals, then I would be ready to go. I would love to be a developer known on a first name basis and benefactor for great causes. I would also be very wealthy and own multiple businesses. I’d have a building at my alma mater, the University of Hawaii named after me and would have field passes and drink beers on the sidelines during football games.
Brah, I like join your firm and drink green bottles at the tailgate, go bows!
Hit me up. The Hawaii real estate Ohana is pretty tight, I’ve come across many of them especially ex-kama’aina. I’m Mr Bud Light. Green bottles get me too hammered. I can already do the tailgate drinking, I want the field passes during the actual game, drinking.
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