Why does no one like real estate divisions in IBs?
I never see anyone interested in real estate divisions of investment banks. Why is this? Are they not as good? I'm interested in this industry so I am curious as to why this is.
Look back 3-4 years when real estate was hot and everyone wanted to be in GS Real estate or the DB Real estate and Leisure group, or any of the big time RE divisions. However, in case your head was in the ground for the past few years, real estate fell off a cliff.
So, until there is capital to be made, lenders willing to lend, etc in the space (and not on a distressed basis) there isn't a ton of interest.
FWIW, I like the space, am in it, and am seeing opportunities, however they aren't in the realms that make for good risk averse IB business.
That makes sense. What do those divisions do? Buy undervalued properties and sell for a profit? Or help other companies finance deals for them to buy properties?
I've heard the valuations and multiples used are different because you are looking at a building for example not a company. Many people claim once you get in RE you will get pigeonholed there (not saying it is or isn't true). Also, I have heard some people allege it is less complex than other industries. I was very interested in joining the RE group initially until I talked to people in the group. Most if not all of the people I talked to analysts up to MDs knew that they wanted to do RE (previous experience, passion for it, parents did it) and stay in it for the long haul. I was turned off by this because it wasn't something that I was that passionate about and I didn't know if it was something I wanted to do my entire life. Also, talking to people not in the RE group it is not the most active group right now. Most of the RE people though I talked to seem real down to earth and more relaxed than the other groups.
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