Can someone working in real estate investment and/or development please shed some light on career options for an entry-level Acquisitions Analyst vs. an entry-level Development Analyst?
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What is compensation like at lower levels and as one advances in their career? My impression is that investment roles have higher salaries in general, but you can ultimately make more in development if you are in a principal position. Would you have to raise money and develop yourself in order to make good money in development? (ie $500k-$1mm+)
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What is a better entry-level role, acquisitions or development? Would one set you up better for the rest of your career?
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Is it common to move between acquisitions and development? Is it easier to move from acquisitions to development?
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A lot of developers tout their development pipeline. If a developer says they have a $2 billion pipeline, does that mean they have $2 billion under construction, entitled, or at least acquired? How aspirational is the "development pipeline" number? I am wondering because I've come across smaller shops that build $100-$200mm projects (total value after disposition or refinancing) and yet advertise a development pipeline that is over a billion, which makes me believe the so-called development pipeline doesn't consist of very concrete (pun!) projects.
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Any thoughts on working for a debt fund? Would you later be an attractive candidate for a position on the equity side?
I dont have lots of time but:
2 + 3. I have moved fluidly between entry level acquisitions and development roles. They are very similar.
Pipeline a little ambiguous. To me, it just mean things they have it in control either owning it outright or options and are making progress in some way, in any stage.
no idea
Sounds good, so a former development analyst with a couple years of experience could easily transition to a more finance-oriented role such as in acquisitions with a PE firm?
Any comment on compensation at a developer in NYC? I've seen some reports and old threads on WSO, but the numbers seem a little off. For example, the 2018 CEL report says total compensation is $90k-$100k, but a lot of people on here say they're making closer to $65k-$75k.
i dont know about NYC, market in texas is 65K - 70K with 10-20% bonus. i am a 2nd year at 70K 25% bonus and 200bps carry. NYC should be higher. To your first question, yes, especially if the PERE firm has an opportunity zone fund that will be investing exclusively in developments.
Ive done both:
Your impression is corect, developers might pay bigger bonuses but they don't have large funds to take fees on.
Development is a great entry, you will get a flavor for everything at a high level
It's common. Easier to move from dev to acq, there's just more moving pieces in development
No, a developer could be bidding on a $1mm piece of land for a $25mm building, meaning they would put $26mm on their pipeline for that project. They don't even own it yet.
Going from lending to development would be harder than going from lending to acq.
It's easier to move from development to acquisitions? I had thought the opposite.
Anyway, how do developers in NYC pay? What could a development analyst at a mid-tier developer (Naftali/Chetrit/Adam America/Gotham/Moinian) expect to make? And what are more senior directors/VP's making?
those shops are really hard to get into and I doubt they pay their analysts on par with megafunds/companies in the PERE 50. I'd also look into the culture at each of those shops (for what its worth I've heard bad things about Naftali Group)
I'd imagine the pay is decent but not great. Family offices are tough because there isn't a whole lot of room to move up after associate level from what I've heard from friends at places like Extell, Naftali, etc. Maybe you get promoted to VP but after that...very tough. Still a great place to learn and IMO worth a slight pay cut
The pay seems to be lower because they know you are there for the unique experience. Associates at Extell from what I remember get paid about $140-150k all in (this was a year or two ago might be different now). but, at the end of the day, early in your career its all about the learning opportunity. if you have a chance to work for Miki Naftali, Joe Chertrit, the Moinian's, etc. I would jump on it
I’ve done both. Big brand experience continues to be helpful. The national and international alumni of my analyst class is solid, even until today. Smaller company experience you can wear many hats and possibly advance more quickly if hierarchy less defined and you show capability.
Starting in development or REPE acquisitions, it is interchangeable but I personally have a preference for starting in a large REPE. You start off with the 30,000 foot view of CRE (even investment management; why LPs allocate portfolio to real estate). 10 buckets of money (core, core plus, value add, opportunistic, mezz, separate accounts, niche, programmatic JVs, portfolio and M&A, co-GP/co-invest) each with each own capital markets behavior across many geographies, asset classes, investment thesis.
Then you go to Development as an analyst or associate (typically post grad school, but there are exceptions). Now the 1,000 foot view (the 0 foot view in my opinion is the framer with the hammer or the on-site leasing agent). You’re flying low but typically with consultants or in house experts to manage. Normally one or two asset class specific development shop. A lot more complex from a technical knowledge perspective, with coordination with all parts of development as an analyst underwriting deals and creating valuations for land or manufactured land, pitching for capital, and or working in dispositions. A lot more localized. Understanding of the 10 Buckets of Money (private equity), is valuable (a bit less if you’re at a REIT). These projects need capital. You worked for a provider of capital (check that box). An analyst at a development company can be a really great role even if the development is silo’d because you have to help connect the silos with your underwriting. Really neat.
The development associate role is a great spot as you start getting more into the weeds of development; continuing to Development Manager. I recommend a firm that follows the Trammel Crow model; development deal quarterbacks the entire development cycle. They tend to hire those with grad degrees. I’m talking about the larger shops.
I would like to add that the continued improvement and success of your past employers and colleges can and will benefit you long after, as an alumnus. If your firm is the acquirer (not the acquiree), and grows in strength that bodes well. I won’t overlook a lesser known firm today with growth potential. If you can help them build that brand, you have an even more compelling story and experience with growth challenges and glory.
Now you have a broad based exposure and a top down look at the business. Where you go after that, you decide.
That said don’t dimish any role, Acquisitions, Development, Asset Management. You’ll find our profession more prone to generational events like recessions, boom times. Your carefully laid out plans can change (I was also unemployed), and you make the best of it.
If you work hard, really pay your dues, focus on improving your work; in time you will have great options. And give back to others.
1) I hate this question. There is no hard and fast rule, period. Too many independent variables at both the entry level and at the end of the road. There are brokers out there getting commish checks that make MF annual bonuses look small. There are Portfolio Managers of closed funds getting higher shares of liquidity events than the senior deal team guys, etc. If I had to guess, there is not a significant correlation between working in Acquisitions, Brokerage, Development, etc. and making more money. It can all be lucrative, it can all be underwhelming. Even when people talk about how Acq guys make more than AM guys at the top, it's not necessarily true. If you become a PM and work at a shop where the PM gets a higher cut of the promote payout at the end of a fund's life-cycle than anyone else, you can make more than the guys toiling away as VP's of Acquisitions.
2) Whatever you're more interested in.
3) If you can do development you can do acquisitions. Vice-versa isn't necessarily true but at an analyst level there's pretty good fluidity between either career path.
4) Everyone inflates the shit out of their numbers in some way. The number you're seeing is more like a pipe-dream than pipeline.
5) At the younger levels it's not hard to jump between either. As you get older, the air gets thinner and you're going to need to have more specialized experience to be a competitor for top roles.
Et quas est voluptate quasi repellendus. Laboriosam nesciunt nostrum est commodi. Qui minus rerum et.
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