Currently an undergrad student that wants to enter the real estate industry. Still contemplating on what department but acquisitions is one of my top choices. Curious to know why y’all decided to enter the acquisitions side of real estate?
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Exposure to new deals, in a way chasing deals is kind of thrilling since it is very competitive to be awarded one (obviously depends on the asset class) and it truly makes you think about things from a financial standpoint but also helps you get exposure into markets and how they feel. I’d like to say that Acquisitions is more of an art than a science as you are using current data to assume future trends. But data is data until you can create a story and back up it up with your data.
To escape my early childhood trauma? An intuitive response to battling years of neglect? To drive a range rover and get ass, bro?
JK. In most cases it's the position closest to the action. Good combo of analytical work and people. It's challenging and fun. Meet smart people. Gives you a skillset the economy thinks is valuable.
Why not development?
Development sucks. Unless your dad is bankrolling you later on to go solo, go for acquisitions.
Too much personality to be a banker but too insecure to not make myself feel important.
Jk, in reality I interned and enjoyed every minute. I think that’s important for something you dedicated 40+ years to. Plus the money can be really good.
Beats being an accountant, which is what I studied.
What do you mean by too much personality to be a banker? Like a CRE banker?
IB
As others have said, being in seat closest to the deal.
Also, acquisitions (as opposed to asset management) tends to be faster paced on a day-to-day workflow basis, and definitely so on a broader timeline. IE at most shops, the acquisitions team will close on a deal, pass it off to the AM team, and it's on to the next one. In a pure AM or hybrid role you might be stuck working with a handful of assets for several years depending on stage in investment life. Granted, AM certainly teaches the value-creation / maintenance portion of a real estate investment which is incredibly beneficial to understand in the grand scheme of things. I personally have had experience to both sides and believe both perspectives are valuable.
Development is a different beast IMO but certainly worth looking into.
Thanks for sharing! Could you expand more on the last sentence regarding development being a beast?
Although my development experience is somewhat limited, I can expand:
I say it's different because there are just aspects of a development deal that you really aren't facing in acquisitions. Just think about it - as opposed to acquiring a pre-existing asset, you are building it. You have to find a general contractor (unless your shop has a construction vertical, some do); you need to deal with local government municipalities in regards to zoning and other government approvals; dealing with all kinds of environmental and soil consultants to make sure your proposed property is feasible from those standpoints; hiring surveyors and title companies to provide legal ownership descriptions of property; setting up utilities, power, and waste disposal mechanisms to newly erected structure; and then on top of completing building you might still be responsible for lease-up / stabilization of asset (unless doing a merchant build which is essentially erecting the structure and then immediately flipping to a buyer).
That probably seemed like a lot, but really just the tip of the iceberg. You are really getting granular in RE development - but people love it. Creating a working commercial structure on an empty plot of land is quite a fulfilling experience, but can provide headaches throughout the process. Also returns tend to be higher if things go well (higher risk).
What would you consider the archetype / ideal/gold standard - company, location, subject matter (niche), and position in Acquisitions regarding all-in compensation?
For many, myself included, it's starting their own shop and succeeding.
As far as being employed by someone else (for me)- lead deals at a small single market shop with deep pockets, and transact across existing assets and dev sites (flipping entitlements, etc). Good cash comp and significant carried interest/co-invest. Management/owners leave me alone and let me transact on their behalf. Let me know when that role exists though.
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