Working in CRE syndications at MM bank after Masters in NYC
I have the chance to work at an MM bank after my masters with abt 30 billion+ in assets. Is working in CRE syndications a good place to start If I eventually want to go to the buy side after a year or two. I'd be coming in as an associate.
Working in CRE syndications at a middle-market (MM) bank with $30 billion+ in assets can be a solid starting point if your goal is to transition to the buy side after a year or two. Based on the most helpful WSO content, here are some key points to consider:
Skill Development: CRE syndications will expose you to deal structuring, underwriting, and financial modeling, which are highly transferable skills for buy-side roles in real estate private equity (REPE) or institutional real estate investment.
Networking Opportunities: The CRE industry is highly network-driven. Working in syndications will allow you to build relationships with institutional investors, developers, and other stakeholders, which can be valuable when transitioning to the buy side.
Market Knowledge: You'll gain a deep understanding of the commercial real estate market, including asset classes, market trends, and risk assessment, which are critical for buy-side roles.
Positioning for the Buy Side: While CRE syndications is a strong starting point, transitioning to the buy side often requires demonstrating deal experience and a track record of success. Networking and possibly pursuing an MBA or MSRE (if not already completed) could further enhance your chances.
Timing the Move: A year or two in syndications is a reasonable timeframe to gain foundational experience before making the jump. However, ensure you leverage this time to build a strong resume and network within the industry.
In summary, starting in CRE syndications at an MM bank is a good launchpad for a buy-side career, provided you actively develop your skills, network, and deal experience during your time there.
Sources: https://www.wallstreetoasis.com/forum/real-estate/starting-my-career-in-cre-five-years-out-of-undergrad-brokerage-vs-development?customgpt=1, Best Places to Start in Commercial Real Estate?, Career Path in Commercial Real Estate, Career Path Starting as Credit Analyst, Some Observations from an MD
Yes it is really good, ofcourse the ideal scenario is you go buy side right away if you want to end up buyside.
However, the lending side of the business gives you really good foundations. You'll learn how to do lease reviews, analyze downside risks like upcoming expiries, and due diligence. You'll also get good exposure to credit underwriting and how to size a loan properly. Capital structure for deals you'll also get good exposure to.
Some things you may miss out on that buy side would be looking for:
(i) Argus experience (team dependent - you may actually use Argus on lending side but is less common than buy side)
(ii) 5 or 10 Year DCFs - typically lenders are conservative underwriters, meaning whatever the in place NOI is - that is what the loan gets sized on. For most lenders, there isn't much point of doing a 5 or 10 year cash flow projection. Unless you're doing bridge loans like 2 year interest only, then you may not get some exposure to IRR analysis, Present Values, Turnover Calculations for Multifamily, etc.
I started my career on the lending side and I'm so happy I did. It made me a conservative and risk averse analyst. Its really good for building strong CRE foundation skills that are healthy and understanding when assumptions are too aggressive.
To add, syndications are typically more complex than standard loans. As a bank, you'll probably be in the "A" note position, with a private lender or fund in the "B" note.
You can think of A and B notes as 1st and 2nd mortgages, however the borrower only sees and signs 1 commitment letter or 1 loan. On the back end the A note is the 1st mortgage less risky, and B note is the 2nd mortgage ontop more risky.
B note players typically have more client involvement or engagement and control the deal...interestingly enough. The B note originates the loan and funds the most risky 20% of the loan for example, and then goes shops for standard mill A note loans from banks like yours. The interest rate is higher for B note and lower for A note, but the borrower pays a blended interest rate that then gets distributed.
I'm in syndications, CRE amongst other things.
Depends on what type of syndications, whole loans, cmbs, agency, other?
It is a good job if you are good at sales. I can say without a structuring background you will not get to the buyside, unless maybe you sell CMBS b pieces and go the credit route.
IF you give me more color on the role, I can be more helpful
What are some similar banks? At my bank, (larger bank) the syndications team doesn’t do much with property level things. They will ask the deal team or the asset managers questions and don’t do any of the modeling.
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