Which Vertical is Best?

I'm a junior looking at internships at the moment and need some advice. I know what all the verticals in CRE are but I don't know which one is best/which one I should pursue.

Can someone tell me the differences in pay, wlb, exit opps, etc. for the different verticals within CRE? (I am also somebody who is great with people/kind of a salesman so I would just want to be involved with the deal side of things in the future, just looking to grow my skills right now.)

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So there are a million career paths in RE so I'm going to break it down into roughly 4, but again there are hundreds of career paths that many are not going to fall into this...

1. REIT/REPE - The logic in grouping these two are because they most broadly acquire existing buildings and through value add make their profit. Yes, they can also develop or use credit vehicles but lets focus mainly on how they operate...purely transactional for the most part. So for this, REITs generally pay high salary and bonus structures since everything is very regulated and structured. This is going to most closely resemble traditional banking/finance roles since its a very clear pay structure. Meanwhile REPEs are all over the place but typically higher overall comp than REITs and can receive carry down the line which grows your compensation exponentially and REITs mostly would give you stock options instead which are more dependent on stock market (assuming public REIT) than actual performance. The WLB isn't terrible unless you're on a live deal but I would say you average about 50-60 hours at a junior level. You might work 70-80 when a deal is live but might work only 40-50 when no deals are happening. You also tend to get your weekends to yourself, so definitely a plus. For exit opps, these are considered 2/3 of the end goal by most people on here but that's all relative. If you are at a well established REIT/REPE you can transition to mostly anywhere else in CRE without too much trouble. 

2. Development - I separated this from the other 2 investment companies because this is more ground up rather than focused on existing assets. The same way that REPE/REITs can do development deals, you can also have development companies that supplement their deal flow with acquisitions so don't think that just because you do one means that you'll never see the other side of the business ever. The pay here definitely starts lower from what I've seen (not like night and day but REIT/REPE analysts might start with 100k and development analysts might start with 90k). While they might start lower, you see them catch up fairly quickly when carry starts to become part of the comp package and in general salaries and bonuses aren't too far off at the director/vp level and above. The WLB is pretty similar to REPE/REITs where it definitely picks up dramatically when deals get down to the wire, but in general Development has much longer time horizons on the deal where acquisitions might only have 30 days to go through UW and DD before a PSA needs to be signed and start the closing process, development might have over a year to UW and go through the process of getting all the legal and 3rd party reports wrapped up since land purchases for development have much longer time frames and then the cost on holding land is much less than an operating asset that needs upgraded and managed better. So WLB I would give a slight edge here but in the way that comp isn't too far off, WLB isn't too far off either. Like mentioned above, this is one of the 3 "exit opps" so from here you could transition to a more pure acquisitions role at a REPE/REIT or go to brokerage or another vertical of RE. 

3. Brokerage - This one has a million verticals within overall "brokerage" since you could have IS, ECM, DCM, leasing, etc.. But the common thread is that they are middle men that are fee based business rather than owners/capital allocators. The pay here varies MASSIVELY compared to the previously listed aspects of RE. You might make $0 as a broker over multiple years and drop brokerage when you can't afford your own rent anymore, or you can hit on a few big deals in your first year and pull down mid-6 figures as a 22 year old. This is purely sales and connections as a broker and treated as such. You will get better splits with the brokerage you work for the higher up you go in title, so you net more income per deal based on promotion. There are also salaried roles in brokerage like analysts that make the models for offering packages and marketing roles for putting the packages together with pictures and nice language kind of thing. Granted there's also research and many other departments that are salaried so it's impossible to lump them all in. It is safe to say though that the salaried positions are generally paid less than development and REIT/REPE roles unless you are on a very high performing team and even then it's the broker's discretion to give you profit sharing so lots of variables here. The WLB I would say are probably the best since you only work when you want (as a broker, not a salaried position) but it can also be the worst of all of them if you keep your team lean and do lots of deals that take a ton of time. It's eat what you kill so you can make it as great or terrible as you want. The exit opps for this depend on where you work in brokerage. You can see analysts move from brokerage to REIT/REPE/Development fairly regularly and see DCM/ECM move from brokerage to capital markets teams in buy-side firms. Brokers themselves can also make the switch but unless they are modeling their own deals it is less likely for them to make that switch as easily. Leasing brokers can easily make the switch to asset management roles in buy-side firms since they are well connected and aware of how to lease up spaces and maximize value of a space so the transition isn't too hard. 

4. Lenders - This is going to include private credit, banks, agency, and every other form of debt that can go into deals. The distinction of this group is where they are in the capital stack and how they are involved in deals compared to REIT/REPE/Development. Similarly to what I said previously about Development/REPE/REITs, you can have a private credit team within a REPE/Development company but it is not their primary focus. This is the one aspect that I know the least amount about in terms of specifics but I will give my best representation and hope that others can supplement me here. The WLB is pretty solid and will see mostly 50-60 hours unless they are closing on a loan which can bump those hours up towards 60-70 hours. Typically weekends are free for lenders too so WLB is pretty solid. The pay here is good and relatively structured in the same way REITs are since you might literally be working for a bank. Carry is possible for private credit but since I would say it's rare to get massive returns in debt (definitely not impossible though) but the majority of comp in this vertical of RE will be base salary and generous bonus structure. Probably going to start slightly higher than development but under REPE/REITs if you wanted to rank them, but this is very dependent on the firm and can change the order of that ranking on a company-by-company basis. The exit opps for this is interesting. So from here you can lateral to equity investments if you so choose, but I know plenty of VP's at lenders who make a very very healthy amount and consider that an end goal so it definitely depends on the person. 

I'm not going into detail on the rest of the verticals, but I can mention that there are also roles in appraisal, consulting, 3rd party companies that are needed like surveyors that are in the CRE realm you could look into. These are probably the least talked about on here since they are more behind the scene roles and aren't going to be making headlines about their comp or activities. From these roles though you can transition to brokerage or development through project management and then from there move to more of an investment role if that's the end goal so you wouldn't be completely trapped if you didn't want to end up here. 

 To answer your main question of "which vertical is best?" depends on the person. I know people who love acquisitions in REPE much more than development, people who wouldn't give up being a lender ever, brokers who pull in 7 figures regularly, and development executives that make more money than they could ever need and have all the time in the world. Each vertical has their ups and downs and each has a job function that some might love and others might dread. If you think you'd want to be an investor using equity then skip internships in brokerage and lenders and get one at a REPE/REIT/Development company and go from there. If you are more of a salesman then maybe brokerage is for you. It's just all very subjective when it comes to "best career path". Just know that its never impossible to transition from one vertical to another if you want to. Careers are a 40-50 year adventure that is very fluid and can change as fast as your interests. 


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