What is your compensation in Real Estate Finance?

I cant find much in the way of compensation for real estate other then the summary page from the HR consultant that is floating around here, so I thought maybe people will be willing to describe what they do, their market, and what their compensation looks like.

Industry: Real Estate Development
Title: Development Associate
Market: California major sub markets
Shop Size: Small (0-20 employees)
Experience: 6 years real estate, 3 years being development
Product: Mostly ground up market rate multifamily (50-200 units), some commercial ground up
Duties: Manage entire projects as the second behind the DM or as the lead from acquisition to C of O.
Compensation: $85,000 base, ~$5,000-$10,000 bonus, 401K, Health

 

Industry: Real Estate Development Title: Summer Development Associate Market: Major Southeastern City Shop Size: Small Office (100 employees) Experience: 3 years real estate, 1 year grad school Product: Ground up, Class A Multifamily (300-400 Units) and Office Duties: A bit of everything. Market research, underwriting, and design oversight, etc. Compensation: $80,000 pro-rated over the summer. $2,000 relocation.

Commercial Real Estate Developer
 

Jeez I didn't realize development associates make so little. You spend $80k on 1year of school to get out and make $80k/year... I know multi-family property managers that make that as base salary.

At what point do you get carry and/or the ability to coinvest assuming you have the cash to do so? I'd imagine won't have much cash to invest if they're making 80k/year.

If you're at a big shop like Related, when do you start to make some cash?

 
Non-PC Broker:

Jeez I didn't realize development associates make so little. You spend $80k on 1year of school to get out and make $80k/year... I know multi-family property managers that make that as base salary.

At what point do you get carry and/or the ability to coinvest assuming you have the cash to do so? I'd imagine won't have much cash to invest if they're making 80k/year.

If you're at a big shop like Related, when do you start to make some cash?

This is why I posted this. I have no clue if I am significantly underpaid, but it feels like it. I can co-invest with my own money in deals, but like you said, I dont have much to invest.

 

You would be underpaid where I work. The base is reasonable, if not perhaps a bit short, but the bonus is way small. People here take a 5%-10% personal performance bonus and a 10%-20% deal performance bonus.

Commercial Real Estate Developer
 

It may be worth considering what you do have to bring to the table. It's not money that you have to co-invest at this stage in your career that makes you valuable. It's the financial intelligence that you bring to deals and the amount of value you can create for others. Now... we need to talk about how to parlay financial intelligence into hope certificates.

When an emerging fund manager or asset operator comes to me for help, they know by the end of our first conversation that I am going to add value to what they are doing. They would gladly pay the money I ask, but few have enough conviction to pay for a pitch-book (as one example). So we negotiate.

If the operator or fund manager later wants me to introduce them to capital, I charge a fee up front, then take a percentage of the funds I introduce that close. Even 1% of $10M is $100k. Can't pay me my fee until the deal cash flows? No problem. Let's talk.

How does it sound if you just leave my interest in the deal? Pay me on the back end? If I didn't believe in the deal, I would not have dared to promoted it to my capital providers, so I'm already comfortable there. Let's say $25K up front with $100 hope certificate left in the deal that accrues interest until the next liquidation event can be a nice way to build a retirement nest egg.

Collect K1's - start a whole collection of them. As the deals mature and exits happen, do you need to worry anymore about an $85K job with a 50-60 hour work week?

What intelligence/skills do you have that people will exchange fee or equity positions in deals for? How can you negotiate a fee for yourself and/or a piece of equity in exchange for what you know? A collection of smll pieces of equity can feed you and your family and keep you from filing W-2 income at all - unless you want to.

 
Best Response

You don't get into commercial real estate to be an office drone or wallow in middle management your whole life. The goal is to get promoted to Development Manager, get experience, and then either get promoted to management or go off on your own. No one's getting paid $200k flat to play in Excel and run Esri reports.

Commercial Real Estate Developer
 
CRE:

You don't get into commercial real estate to be an office drone or wallow in middle management your whole life. The goal is to get promoted to Development Manager, get experience, and then either get promoted to management or go off on your own. No one's getting paid $200k flat to play in Excel and run Esri reports.

This.

Array
 

Industry: Development Title: Analyst Experience: Out of UG City: Secondary Top Market (tier below NY/SF) Product: Bit of everything Duties: Excel, DD, some AM, some entitlement Comp: 55k + 10-20% bonus

 

Industry: Real Estate Investment Management Title: Analyst Market: All major cities Shop Size: Mid size (60 employees with 25 investment professionals) Experience: 4.5 years (1 year internship, 2 years rotation) Product: All stack of debt (senior A, senior B, second mortgage, third mortgage, bridge, mezz) Duties: Lead the underwriting process for all products, run some easy refinance stuff Compensation: $65,000 base, 0-125% bonus, health, and match 6%.

 

Inv Mgmt (Equity) Analyst Major markets Large shop Valuation, research, memos, portfolio analysis, dispositions, quarterly/annual strategies $65k + 15%

REIT (Equity) Analyst East coast Medium sized REIT Modeling, underwriting, memos $82k + 7%

 
NonTargetMan:

Industry: Real Estate
Title: Associate
Market: Texas
Compensation: $120,000 + 30-40% bonus + equity

Now this is what's up. Gotta get in on that Hines/Crow Holdings cash.

Commercial Real Estate Developer
 
NonTargetMan:

Industry: Real Estate
Title: Associate
Market: Texas
Shop Size: A few billion AUM
Experience: 6 years
Product: multifamily, retail, office
Duties: Acquisitions, Asset Management, development (cradle to grave)
Compensation: $120,000 + 30-40% bonus + equity

I made same salary and had only 1 year experience !
 

Industry: REPE Title: Summer Associate (Acquisitions/Development) Market: Southwest, but invests nationally Shop Size: $10B+ AUM Experience: 3 years RE pre-MBA; current summer intern Product Type: Office/MFH/Retail/Industrial Duties: Acquisitions and development deal buy-side underwriting, compiling IC briefs, due diligence, market research Hours: 55-65 Compensation: 90K prorated, 2K relocation bonus

 

A lot of people don't realize this, but most real estate positions will top out at $125,000 to $150,000 base and then you will make your money in the carry once you grab a piece of that. Also, some acquisitions guys get bonuses for closed deals. Otherwise, at the lower levels, developments pays less than traditional "REPE." For example, any of the traditional capital allocators will pay better at the lower end. At the top end, all depends on your investment performance.

 

Industry: Real Estate Title: CM/DM Market: CA Shop Size: A few billion AUM but only 4-5 people in CA Experience: 8 years this summer (1-2 in RE) Product: industrial Duties: Aquisition/DD - construction/design/entitlements - TI's
Compensation: $140k base + 20% bonus. Consistent with what pudding said above. Been told flat out this role (pre-principal or vp type level I think) tops out at a $150k base with a much larger bonus. carry can come after a couple years service/prove your worth type of thing

Related..Anyone want to talk to how/at what point they negotiated carry in their comp? At what point did that come in your career?

UPDATE Jan 2019: $160k base + 25% bonus

 

Generally, as soon as you can draw a clear line between you and sourcing a deal, a successful closing, construction, and C/O you should be getting some equity in the deals.

pere797:

Industry: Real Estate
Title: CM/DM
Market: CA
Shop Size: A few billion AUM but only 4-5 people in CA
Experience: 8 years this summer
Product: industrial
Duties: Aquisition/DD - construction/design/entitlements - TI's
Compensation: $130k base + 20% bonus. Consistent with what @pudding said above. Been told flat out this role (pre-principal or vp type level I think) tops out at a $150k base with a much larger bonus. carry can come after a couple years service/prove your worth type of thing

Related..Anyone want to talk to how/at what point they negotiated carry in their comp? At what point did that come in your career?

 
pere797:
UPDATE Jan 2019: $160k base + 25% bonus

Niiiice. $200k club.

pere797:
Related..Anyone want to talk to how/at what point they negotiated carry in their comp? At what point did that come in your career?

I got lucky that I didn't have to negotiate for it - it was part of the offer. I'd do some research / reach out to your buddies in your market and see if anyone else is in the same position. It's easy enough then to make the argument that "market comp" includes carry.

Commercial Real Estate Developer
 

That's sweet. Unfortunately, I really don't have many people I know in the RE industry so its tough to gauge this kind of thing for me..hence why this thread is valuable to me lol. But honestly, I think I am getting pretty much market as far as base goes especially here in CA. For what its worth, I had another offer to go somewhere else for a higher base this past year as a DM, so lateral move, but I like what I am doing project wise and it will be good for my resume later when I try to make a VP/Director transition. Or if I make the case for that promotion when the time comes, I think its definitely worth the hard conversation with the current employer.

 

what did you do pre real estate? you said 1-2 year in RE? I’m looking at making a switch to real estate and trying to figure out where to jump in.

 

Agree with the figures that pudding said above, being that some shops you may be able to squeeze out an additional 25 K if you have the right background/resume they want, which is timing/luck. Keep in mind the comp packages are vastly different given the structure of the firm. A PE acquisitions associate is going to have a very different starting package and trajectory than someone in a similar role at a REIT/Pension Fund.

A big reason for this is that there isn't as normalized of a talent pool to bring into the buy-side as other sectors. Unless someone is willing to train you up fresh out of undergrad, there are only a handful of brokerage firms (CBRE, Eastdil, JLL, HFF, etc) that have a dedicated analyst program that preps people for the buy-side in a similar way that IB does within the traditional 'high finance' sector.

It's very rare for a reputable (read: profitable/successful) shop to give out equity participation to anyone below a VP/Partner level since you haven't proven yourself yet with respect to deal performance. Typically they will offer a relatively good comp package considering you probably aren't going to be pulling more than 50-60 hours a week, but won't give equity participation until you have been around for a while and know what you are doing/have a network of your own and can start the deal sourcing process.

"Who am I? I'm the guy that does his job. You must be the other guy."
 

Industry: Development Title: Associate Market: Major East Coast Shop Size: $4-5B AUM Experience: 4 years real estate Product: Office/Resi/Hospitality/Retail Duties: Cradle to grave development. Compensation: $115K base 30% bonus

 

Industry: Dev, acquisition, of all product types. Title: really none but I say associate Market: south, mainly Texas Shop size: small under 5 Experience: 4 yrs, straight out of under grad. Degree unrelated Product: anything but hotel but mainly MF Duties: EVERYTHING! Acquisitions, modeling, writing packages, raising a little equity, portfolio management, dispositions. Comp: 50k base, minimum 100% bonus, max 300% Hours: 60 tops usually 40