Worst Places to Start in Commercial Real Estate
Like the title says, I’m trying to figure out the worst first job you can have in commercial real estate. That way users can know to avoid it and aim for something equally easy to get but less hindering to your career.
Based off what I’ve read here, appraisal and DUS lending seem to be the worst. In appraisal you’re not truly thinking about value. It’s more just a required document lenders need.
In DUS lending, you’re just underwriting to the guidelines fannie and Freddie force you to. And sucking on their teet to close deals. Plus it’s multifamily only.
Anyone else? What’s a job real estate folks should avoid if they want to make it to the big leagues (REIT head of acquisitions, MD at repe fund etc)
Property Management, Appraisal, and Valuations.
Disagree, good friend of mine went from valuation to asset management for a highly regarded shop in less than a year, depends how you spin your experience
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Disagree. Leasing professionals at good shops are extremely valuable because of the relationships they have with tenants and the market/property level information they have. Our leasing guys are like encyclopedias. There's also a ton of overlap between AM and Leasing if a younger person wanted to switch internally or do a year or two in leasing than jump to AM at another firm. Leasing is the RE equivalent of doing Equity/Debt sales on a trading floor.
I've seen many people start in Valuation groups of major accounting firms and later move to prestigious REPE funds and developers. Appraisers are generally looked down upon, but their day to day work has some overlap with an acquisitions role.
I would avoid:
Property Management - stressful with limited compensation upside. The only underwriting exp you get is making operating expense and capital expense budgets.
Residential Sales - very cyclical, lots of running around, minimal base salary, not respected in REPE
I worked for a small commercial appraiser before jumping to acquisitions (last fund raise, ~2B), and the two analysts before me both also incidentally left for investment roles at a developer and a REIT. Definitely wasn't an ideal start in many many ways, but I had to make the best of it.
Commercial appraisals is truly miserable and gritty (shitty) work, but you get great exposure to different real asset classes, not to mention one of the most sought after skills if you're gunning for the investment underwriting side... (argus experience)
As long as you're using it as a stepping stone, you shouldn't think of it as your measly function in the lender approval process, you should be focusing on the learning.
Given many investment teams outsource hiring to recruiters, these are pretty easy skills / experiences to sell to a recruiter to get them comfortable enough with presenting you to their clients.
Aleppo, Pyongyang, Baghdad,
Don't get close to these places for their real estate
What is Aleppo?
Cold call sweat shop or Property manager at a class C Multi with Multiple homicides
Coincidentally also the worst place to end your career in CRE.
How it took so long for someone to say research I don’t know.. in today’s day and age with resources available anyone with a brain can do research. You’re only option is to and switch internally to IS or another IS team. No one is hiring a guy from Research for an Acquisitions, AM, or development , etc role.
I think some of these are alittle blanket statement however..Property Management? Sure if you are handling tenant issues at a residential shop and inputting toilet clog tickets. If you’re in Property Management for say Vornado or a Property Manager at the World Trade for Silverstein, you may be able to make the jump to say AM. I’ve seen it before. It just depends on how deep you are into your career.
For Appraisal.. if you’re with a top market team with CW/CBRE/JLL, it’s not a terrible place to start. Are you going to exit to BX? No, but you may be able to land a role with a smaller REPE. A lot of roles mentioned depends entirely on the firm you’re working for.
How has Marcus & Millichap and World Class Capital not come up?
I have to chime in here, far too many in this forum downplay the advantages and amazing breadth of experience an in-depth appraisal position can offer someone, particularly early in their career.
I cover the benefits far more extensively here, I transitioned from appraisal to REPE several years ago: https://www.wallstreetoasis.com/forums/moving-from-appraisals-to-repe-a…</a">https://www.wallstreetoasis.com/forums/moving-from-appraisals-to-repe-a…
Again this all depends on the quality of appraisal firm you choose as well as how experienced the principals running your shop are but this really is not much different than any other subset of the industry.
It sounds cliche but any position is going to give you what you put into it. Although certain roles may give you a leg up on paper, the ability to grow and build a solid knowledge base are far more valuable early in your career than having a brand name on your resume.
Any questions I’m happy to provide more insight.
FWIW a lot of people at DUS lenders have been making a killing in this cycle. I have a family friend who is a couple years out of college in a "2nd tier city" who got a $150k bonus last year. This forum would probably scoff at his no name non-target college and non-prestigious city but ~$200k in low COL at 24 is legit.
Honestly you could have the most back office accounting job at some dinky RE shop that is a fee only shop that only makes terrible deals to get acq fees, and you would still learn a ton if you just opened your eyes.
RE is about spinning your experience into why you are valuable. Sure some places might care about prestige but most shops can run efficiently with a small team to make a power house if they all bring something to the table.
The people who dont make it in RE are people who want to do Corp Fin at a FAANG dont make the cut and then do Corp Fin at some RE shop dont care to learn the business and then 10 years later realize they dont really understand RE and have shitty Corp Fin Exp. Those are the people who fail, succeeding in RE is doing whatever job you are doing but seeing the bigger picture.
CoStar - Research associate
Aggregating information for the sake of aggregating information.
No such thing as a bad place to start as your first Job in the RE field.
Learn as much as possible and make the best out of it to your advantage. As long as you hustle, you’ll always find a way to end up at a better position. You just have to start somewhere and get your feet wet.