2018 | Thinking about Acquisitions or Debt at this point in the cycle
How do you all view going into acquisitions at this point into the cycle or going into a private debt fund?
Do you have reservations making a move? Or are you content going into either or if it's a big enough shop?
All depends on your alternatives. People have been saying we're in the latter stages of the current cycle for like three years now.
But interest rates are finally rising, so don't you think this may actually be different this go around?
I'm contemplating leaving balance sheet lending (big bank: think PNC, JPM, BoA, WF), but trying to be mindful of not going into a role within a firm that soon may bust.
Be mindful of where you go - but no need to avoid acquisitions altogether. Companies that have been piling on leverage and relying on speculative rent growth/leasing assumptions might be a risky move, but that doesn't describe everyone. Lot of shops have a lot of dry powder and are waiting for a pullback to deploy- definitely wouldn't expect mass layoffs across the board.
Haven't worked on debt side, but I have heard that space is getting more competitive. If you are convinced on an impending downturn, wouldn't rule out AM side if the funds start taking buildings back.
AM hiring is up across the board for this reason. A lot of firms are pulling back on acquisitions and focusing on preserving capital and asset managing their existing portfolio. That said, there are also still plenty of active groups out there with lots of money to put out and groups that are conservative and diligent with their acquisitions even the current environment. As others have alluded to, it all depends on the group, but I would definitely be cautious about which one you are joining since acquisitions folks seem to usually be the first to go when the music stops.
I literally just accepted an offer for a Senior Acquisitions Analyst role at a $2B Infra/Industrial fund that operates at about 50% leverage, core-plus fund and know very, very little about real estate. Am I fucked, lol?
You know very, very little about real estate? You're not fucked, but they are.
Higher rates can also be very bullish real estate. It’s a sign that the economy is strong.
When there's a dip the returns also become more attractive, so as some alluded to above if a firm/fund is well positioned they may actually look to increase acquisitions headcount, especially if the firm's profile is an all-cash transaction basis. I for one would welcome a tempered downturn since I could actually get some decent returns for a change.
If companies are leaning toward hiring more AM personnel, does that mean they get paid more of a bonus at year end since their expertise would be more valued at this point in the cycle?
Commodi iure assumenda nobis vero nisi libero. Expedita quos deleniti aspernatur praesentium. Impedit rem iste qui rerum. Est amet blanditiis beatae deleniti suscipit.
Qui sit impedit molestiae incidunt nisi fuga id. Voluptatibus dicta quibusdam eos nostrum molestiae nulla. Rerum architecto molestias blanditiis sequi soluta. Modi vitae quasi animi expedita quo numquam unde.
Nobis adipisci perspiciatis culpa quia quae et. Occaecati voluptate amet aut ea. Dolorum hic est accusantium nobis. Voluptas non aspernatur aut sunt impedit repellendus corrupti. Aut cum quod sint et totam commodi.
Ullam et velit consequatur neque id. Cupiditate voluptatem qui quisquam esse est. Tempore officiis nulla impedit. Velit minus velit inventore sapiente dolorum consequatur. Distinctio omnis nisi et ut magnam quia asperiores. Nostrum necessitatibus earum facere et maxime adipisci. Molestias ut architecto aperiam nam voluptatem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...