AMA: REIT Acquisitions Associate

WSO has provided me tons of valuable information over the years and helped me break into real estate a few years ago. Now it's time to pay it forward. I am going to be 100% full disclosure on everything (except compensation).

I work as an acquisitions associate for a small publicly traded REIT (Gladstone Commercial, NASDAQ: GOOD) in Washington, DC. Prior to joining Gladstone, I worked as an acquisitions analyst at The RMR Group (formerly known as Reit Management & Research). The RMR Group is a manager of 4 publicly traded REITs with approximately $17B in assets. Before that, I was in EY's audit practice where I focused on commercial banks and asset management firms.

I went to BYU-Idaho (yes, there is a campus there) for my undergrad, Boston College for my MSF, and will be attending Duke Fuqua this fall for my MBA.

Please ask away!

Check out these other relevant AMAs:
Real Estate Q&A
AMA: Head Research Analyst (Commercial Real Estate)
Q&A With a Buy Side Analyst at Real Estate Investment & Development Firm

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Comments (62)

Mar 22, 2016

MBA wise, what made you choose Fuqua? Did you consider Kenan Flagler? Just asking because while Duke is obviously ranked higher, KF has a great RE program. Also, what were the backgrounds of the others who worked with you in acquisitions at RMR? Thanks for doing this.

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Mar 22, 2016
larry david:

MBA wise, what made you choose Fuqua? Did you consider Kenan Flagler? Just asking because while Duke is obviously ranked higher, KF has a great RE program. Also, what were the backgrounds of the others who worked with you in acquisitions at RMR? Thanks for doing this.

I chose Fuqua for a few reasons:
1) I connected a lot more with the Fuqua students/alums than KF;
2) From a recruiting standpoint, Fuqua provides a few more "options" outside of RE. Also, since I already have a good RE background, I don't believe RE doors will be shut just because I went to Fuqua over KF (this would not hold true if I did not have a RE background);
3) Fuqua is more of a national MBA whereas KF is more regional

The acquisitions team at RMR while I was there consisted of more senior people (Director and up). In fact, I was the only junior-level employee on the team. Everyone came from a acquisitions/Asset Management background. None came from banking.

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Mar 22, 2016

Thanks for doing the AMA. Couple questions:
- Could you describe you day-to-day tasks, hours, and responsibilities?
- What are the bonus %'s like at your level?
- Given that you work for a public REIT (although on the smaller side) is there a lot of bureaucracy to get through?
- What are the pros/cons of working at a REIT in your opinion?
- Do you work as a part of a team or are you pretty much on your own to source your deals?

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Best Response
Mar 22, 2016
CRE-Finance:

Thanks for doing the AMA. Couple questions: - Could you describe you day-to-day tasks, hours, and responsibilities? - What are the bonus %'s like at your level? - Given that you work for a public REIT (although on the smaller side) is there a lot of bureaucracy to get through? - What are the pros/cons of working at a in your opinion? - Do you work as a part of a team or are you pretty much on your own to source your deals?

1) Typical Day: Due to the smaller nature of my firm, my job consists of a mix of acquisitions (80%) and Asset Management (20%).

From an acquisitions standpoint, my job is to underwrite and model deals, analyze the credit of a potential tenant, run the due diligence process if we win a deal, prepare all investment committee materials, visit sites, and perform market research. Each day will be filled with a mix of those items. My firm gives junior employees a lot of responsibility and relies on their analyses to make key decisions.

From an asset management standpoint, I only help when there are new leases or dispositions. We have an Asset Management team that runs the typical asset management duties.

2) Hours: Hours are fairly good. If I am working on multiple live deals, I might stay till 6 or 630. Besides that, I am out by 530 each day.

3) Bonus: Bonus at my level can vary significantly by firm. Some firms give higher base and lower bonus while others are flipped. I'd say the typical Associate at a REIT is in the 30%-50% range.

4) Bureaucracy: Luckily my firm is fairly small so there is no real bureaucracy. However, being public does require a lot more administrative tasks.

5) Pros/Cons of REIT:

Pro: Invest in more stabilized assets which means in a downturn the portfolio will not be hit as bad as a value-add or opportunistic portfolio = slightly better job stability; due to the public nature of the firm, you have full access to the firms performance; if you believe in the firm, you can easily buy and sell shares;

Cons: Investing in more stabilized assets which means you see less diverse/exciting properties; cannot "co-invest" so your upside is limited; red tape and administrative work associated w/ being public;

6) Team: Our teams typically consist of a Managing Director or Director and one Associate or Analyst. The teams are small which means you get a lot more responsibility and get to see all aspects of the deal.

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Mar 22, 2016

I do not understand why people do these AMA's without intending to discuss compensation, it is a relevant consideration. With that said, did you start in the REIT after your MSF? What do you intend to do post-MBA? Did real estate not prove as good as other "high finance" jobs in MBA applications? How respected is acquisitions experience at a REIT compared to at a REPE firm?

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Mar 22, 2016
BobTheBaker:

I do not understand why people do these AMA's without intending to discuss compensation, it is a relevant consideration. With that said, did you start in the after your MSF? What do you intend to do post-MBA? Did real estate not prove as good as other "high finance" jobs in MBA applications? How respected is acquisitions experience at a REIT compared to at a REPE firm?

1) I can discuss compensation, just not give specifics about mine. As I noted earlier, someone at the Associate level can expect a bonus in the 30%-50% range and base to be in the $85-$115k. As with all real estate, this range can vary significantly based on firm, location, etc.

2) After the MSF, I worked at EY in the Banking & Capital Markets audit practice. After working there for a year, I switched over to acquisitions at RMR.

3) Post-MBA, I am hoping to stick in real estate, although on the investment banking side.

4) For MBA, you are not grouped in the IB/PE group of people but rather in the RE group (which is relatively small for all MBA programs). I came from a non-target school, okay GMAT, with no "brand-name" RE experience. I only applied to two programs: Fuqua and Kellogg. I was accepted at Fuqua and WL at Kellogg.

5) I assume you are talking in terms of MBA? Because real estate is a pretty niche industry and not a ton of people in RE go top programs, I don't believe (my opinion) most admissions teams really know how to distinguish between a REIT and an REPE firm.

Mar 22, 2016

Thanks for doing this.

What made you decide to go back and get a MBA after already getting an MSF?

Could you explain the jump from analyst to associate? How did your responsibility and role change with the climb up the ladder? Also what made you move firms?

Mar 22, 2016
REPE8:

Thanks for doing this.

What made you decide to go back and get a MBA after already getting an MSF?

Could you explain the jump from analyst to associate? How did your responsibility and role change with the climb up the ladder? Also what made you move firms?

1) The MSF is a degree for someone with little to no experience, is very narrow in focus, and is not yet on the same standing as an MBA. My whole schooling/career has revolved around numbers. I want to take a break from that to learn more about marketing, management, etc. The network and career opportunities directly post-MBA were other high considerations.

2) The analyst and associate are basically doing the same thing, except the associate will have more responsibilities and more trust. The associate is expected to run the underwriting and due diligence with basically no oversight whereas as an analyst you will have people constantly double checking your work.

3) The move was mainly personal. My in-laws were supposed to move to DC and so we were moving there to be closer to them. The final push was RMR went through some turbulent times (search: "Commonwealth REIT and Corvex" to get a full background).

Mar 22, 2016

Thanks for doing this, I will check the offerings on your website very soon.

I'm also headed to a top MBA program this fall and was wondering if you could speak to some of the opportunities for career-switchers looking to break into real estate. I am coming out of the US military and am interested in acquisitions roles. I know you haven't started school yet, but do you have any insight into the compensation for someone who has no prior RE experience? Same as other associates?

Mar 22, 2016
CX1988:

Thanks for doing this, I will check the offerings on your website very soon.

I'm also headed to a top MBA program this fall and was wondering if you could speak to some of the opportunities for career-switchers looking to break into real estate. I am coming out of the US military and am interested in acquisitions roles. I know you haven't started school yet, but do you have any insight into the compensation for someone who has no prior RE experience? Same as other associates?

First off, thank you for serving our wonderful country! If you have no RE experience pre-MBA, you will likely enter at the associate level and compensation will likely be in the range I stated earlier (~$105-$125k all in). For you, the most important thing is to get as much real estate experience as possible. Be a leader in the RE club. Take all the RE classes you can. Take part in case competitions. Get a part-time RE internship during school.

Real estate hiring is very erratic and very few firm will ever come to campus. Therefore, you really need to hustle, especially if you have no pre-MBA experience. It is far from impossible, but you do need to hustle.

If you are gunning for acquisitions, I would also look at Asset Management roles as well to cast a wider net. It is not uncommon for asset management people to switch to acquisitions.

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Mar 22, 2016
RE Bootcamp:

CX1988:Thanks for doing this, I will check the offerings on your website very soon.I'm also headed to a top MBA program this fall and was wondering if you could speak to some of the opportunities for career-switchers looking to break into real estate. I am coming out of the US military and am interested in acquisitions roles. I know you haven't started school yet, but do you have any insight into the compensation for someone who has no prior RE experience? Same as other associates?

First off, thank you for serving our wonderful country! If you have no RE experience pre-MBA, you will likely enter at the associate level and compensation will likely be in the range I stated earlier (~$105-$125k all in). For you, the most important thing is to get as much real estate experience as possible. Be a leader in the RE club. Take all the RE classes you can. Take part in case competitions. Get a part-time RE internship during school.

Real estate hiring is very erratic and very few firm will ever come to campus. Therefore, you really need to hustle, especially if you have no pre-MBA experience. It is far from impossible, but you do need to hustle.

If you are gunning for acquisitions, I would also look at Asset Management roles as well to cast a wider net. It is not uncommon for asset management people to switch to acquisitions.

Thanks for the great advice!

Mar 22, 2016

Thanks for doing this. Anyway you could give more in-depth on your background / timeline. Number of years at each job / when you graduated undergrad. Also if you are comfortable more background on your GPA / GMAT.

Also when did you start thinking / preparing to get your MBA? Did you take any of the GMAT classes?

Mar 22, 2016
MIWP1989MI:

Thanks for doing this. Anyway you could give more in-depth on your background / timeline. Number of years at each job / when you graduated undergrad. Also if you are comfortable more background on your GPA / GMAT.

Also when did you start thinking / preparing to get your MBA? Did you take any of the GMAT classes?

I finished undergrad in 2010 and finished my MSF in 2012. From there I spent:
EY -> 1yr
RMR -> 1yr
Gladstone -> 2yrs

Undergrad GPA was 3.5 and 3.6 from the MSF. My GMAT was 690.

I started preparing for the MBA pretty early. A year before I applied I went to a lot of info sessions, talked to many alumni, visited campuses, etc. All of that was in an effort to pick only the programs that fit for me.

I used the Manhattan Self-Study and supplemented that with Magoosh. I would highly recommend both.

Mar 22, 2016

How are you funding your MBA?

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Mar 22, 2016
smokay72:

How are you funding your MBA?

A mixture of savings account (not retirement) and student loans. Unfortunately I was not offered any $ from Duke. My wife and I also run a successful MS Excel consulting company that will also help offset the cost.

Mar 23, 2016
RE Bootcamp:

My wife and I also run a successful MS Excel consulting company that will also help offset the cost.

How many people are employed by this successful company?

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Mar 23, 2016

My parents invest in Multi Family (40 Units+) in NYC, but don't have the education that I will have once I finish graduate in May. I plan to get my MBA in a few years. However my ultimate goal is to create a real estate investment company that:
1. Invests in Multi Family Residential buildings in NY (using investors money as well as my own and charge a management fee)
2. Create a property management company that will then renovate these apartments and maintain them.
3. Also fund my cousin who builds multi million dollar custom homes in NY

What do you believe is the best route to achieve this... Should I go IB and eventually move into PE or try to move into commercial real estate at a commercial bank and get a masters in RE at a top MBA program?

Mar 22, 2016
ISellMoney:

My parents invest in Multi Family (40 Units+) in NYC, but don't have the education that I will have once I finish graduate in May. I plan to get my MBA in a few years. However my ultimate goal is to create a real estate investment company that:1. Invests in Multi Family Residential buildings in NY (using investors money as well as my own and charge a management fee)2. Create a property management company that will then renovate these apartments and maintain them.3. Also fund my cousin who builds multi million dollar custom homes in NY

What do you believe is the best route to achieve this... Should I go IB and eventually move into PE or try to move into commercial real estate at a commercial bank and get a masters in RE at a top MBA program?

Real estate is an apprentice business. It is not hard to learn, but it takes time to build the skill set and especially the network/connections. If you can do REIB -> REPE that would be great experience. You will learn a lot about the fund raising, investment, and management process.

However, beyond that I cannot give much more advice since I am still in the lower-end of experience. Check out a speech Stephen Schwarzman gave to Harvard MBAs last February. He had great advice about starting to venture out too young in the finance industry (I'd include real estate in that). He said:

"If you look at something like my industry, which is finance, which is very much an apprentice business, it takes a while to develop the skills and perspective to know what you should be doing when. The biggest mistakes that I've seen is when someone has some technical ability and, after a few years, decides to go off to build their own business when they've never really been responsible for anything, not managerially or any other way. They get confronted by the real world that doesn't want to back people like that or [face a] market situation or change that they've never seen before and [are] unfamiliar or [have] an overestimation of a group success compared to their success."

"Typically, when you embark on that endeavor and fail, you very seldom get back on the track in the institution that provides you with the shelter or the continual learning. You've gone out, you've failed. And failing isn't like getting a D on a paper. Failing is losing other people's money. And most people are quite unforgiving about you losing their money when you told them you were highly capable and competent and it turns out you're not."

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Mar 23, 2016

Thanks for doing this. I work in REPE and had a couple questions.

  1. Do you underwrite in ARGUS entirely, a mix of ARGUS (through NOI) and excel (layering on debt and return metrics), or purely in excel?
  2. What returns are you targeting on a levered and unlevered basis? Do you feel cap rates will continue to compress in primary markets or are we at/near the peak?
  3. Can you comment on sourcing - are most deals you work on widely marketed?
  4. What metrics do you consider when evaluating private company credit when initially evaluating a deal (with no financials available)?
  5. What do you estimate comp to be for VPs, and what % is bonus vs salary?
Mar 22, 2016
Mr_Coffee:

Thanks for doing this. I work in REPE and had a couple questions.

1. Do you underwrite in ARGUS entirely, a mix of ARGUS (through NOI) and excel (layering on debt and return metrics), or purely in excel?2. What returns are you targeting on a levered and unlevered basis? Do you feel cap rates will continue to compress in primary markets or are we at/near the peak?3. Can you comment on sourcing - are most deals you work on widely marketed?4. What metrics do you consider when evaluating private company credit when initially evaluating a deal (with no financials available)?5. What do you estimate comp to be for VPs, and what % is bonus vs salary?

1) We underwrite using a mix of Argus (NOI) and Excel (layering on debt, fund management fees, and return metrics)

2a) Because we are a REIT, our the levered returns we are seeking are lower than REPE. We typically target a 12% levered return.

2b) I think cap rates have hit their peak, as least in the space we play in (core / core plus). When talking to peers at other REITs, it seems that most companies are throttling back on acquisitions (some by as much as 50% from last year) and are now net sellers. Supply and demand would say this will drive cap rates up.

3) About 70% of our deals are widely or semi-widely marketed and the other 30% are from personal relationships our MDs have with brokers (i.e. off-market deals or deals only being marketed to a handful of firms)

4) We will talk with industry experts who are familiar with the tenant's company to gauge the its strength in the market. We'll also hire an outside firm to perform an in-depth study of the industry to see the future outlook of it. However, in the end, if the tenant cannot provide us some form of financials during diligence, we will not do the deal.

5) This is speculation since I am not a VP, but I would imagine that base would be around $125-$150k with a 65%-75% bonus.

Mar 24, 2016

This is some really interesting information, thanks for doing this.
Couple questions:
As an associate, are you expected to source deals or do you mostly just work on deals brought to you by higher-ups?

The switch to acquisitions from AM sounds pretty common, but how have you seen it in practice? Are asset managers generally taking a step back in title and/or compensation with the switch? (for example, would an associate in Asset Management be able to make a lateral jump, or would it be more likely that they should look for analyst/senior analyst roles?)

Thanks again.

Mar 22, 2016
bolo up:

This is some really interesting information, thanks for doing this.Couple questions:As an associate, are you expected to source deals or do you mostly just work on deals brought to you by higher-ups?

The switch to acquisitions from AM sounds pretty common, but how have you seen it in practice? Are asset managers generally taking a step back in title and/or compensation with the switch? (for example, would an associate in Asset Management be able to make a lateral jump, or would it be more likely that they should look for analyst/senior analyst roles?)

Thanks again.

Associates are not expected to source deals. Your role is to run the underwriting and due diligence. You will not start sourcing deals until the VP level at the earliest. However, usually sourcing is left to the directors and managing directors.

There is no "typical" path people take when switching from AM to acquisitions. Some people are able to make a direct lateral (a couple of people on my team from RMR did that) while other will have to move down a level. In general, compensation for acquisitions will be higher than AM (when comparing similar levels).

If I were in an associate-level AM position but I really wanted to be in acquisitions, I would take a senior analyst acquisitions job all day long. Once you're in acquisitions for a bit and gain the skill set, a whole new world of job opportunities opens u. It would not be terribly difficult to move from a company focused on multi-family to a company that focuses on office. It would not be terribly difficult to move from a REIT to REPE. And so on.

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Mar 25, 2016

Would I have a shot of breaking into acquisitions from commercial real estate banking? Looking to make the move soon.

Mar 22, 2016
littleflipper:

Would I have a shot of breaking into acquisitions from commercial real estate banking? Looking to make the move soon.

Most definitely. The most recent example I saw was a person we interviewed at Gladstone. The person was in CRE banking for a couple of years then switched to acquisitions at a very reputable company. The experience and skill set you gain in CRE banking is very applicable to acquisitions.

Mar 25, 2016

Thanks so much for doing this! This is extremely timely for me because I have a final interview for this very position on Monday with a large REIT. A few questions...
1) How negotiable is the salary offered? When pressed for my comp range in the initial interview, I gave a range below market (60-80k) so now I'm worried they'll try and stick me with that. Your comp feedback above was very helpful in this regard, thank you.
2) Do you have any suggestions for a really intelligent question to ask the interviewers at the end?
3) Do you have any insight into the final round interview? It's with the president and director, so I assume it will be primarily fit, but if you have any insight as to what I can expect, that would be great.
4) How many deals do you work on at once and what is the average timeline for each deal?

Congrats on your success and thanks again for doing this!

Mar 22, 2016
luv2speed:

Thanks so much for doing this! This is extremely timely for me because I have a final interview for this very position on Monday with a large REIT. A few questions...1) How negotiable is the salary offered? When pressed for my comp range in the initial interview, I gave a range below market (60-80k) so now I'm worried they'll try and stick me with that. Your comp feedback above was very helpful in this regard, thank you.2) Do you have any suggestions for a really intelligent question to ask the interviewers at the end?3) Do you have any insight into the final round interview? It's with the president and director, so I assume it will be primarily fit, but if you have any insight as to what I can expect, that would be great.4) How many deals do you work on at once and what is the average timeline for each deal?

Congrats on your success and thanks again for doing this!

Congrats on getting a final round interview!

1) My view is, salary is always negotiable to a degree. My approach (which someone else can chime in if they have a better approach) would be:
a) Try to find a few comps from friends in a similar role. Feel free to PM me and I can provide a few from people I know.
b) When they extend an offer, I'd thank them for the offer, express your interest in the company (don't say they "are you #1 choice), and say you need a day or two to mull it over.
c) When you get back to them, tell them you would love to accept the offer but you would like to counter the salary to be $xx,xxxx. You came to this number after talking with a few people at different companies and feel this is market base.
d) Since they extended an offer, they clearly want you. Therefore, they will meet you either all the way (if you are asking for a small amount like $5,000) or somewhere in the middle.

2) The best questions you can ask are questions that are going to help you make a decision on whether or not you would want to work for that company. Here are a few suggestions:
a) How many live deals do analyst typically work on during a year?
b) What responsibilities are given to the analysts? Is there room to gain more responsibility outside of the typical "analyst" position, or are the roles and responsibilities fairly set in stone?
c) What is the typical career progression within the group?
d) How open are senior members to mentoring the junior employees?
e) What are some things you do not like about working with this company?

3) At the senior level, it will almost 100% be fit questions. They will be asking you about your past experience, why you want to work at this firm, what is driving you to switch companies, why you are interested in real estate, why you interested in that particular asset class (assuming the company only focuses on one asset class), and where else you are interviewing. If you made it to the final round, I'm assume you already passed the technical questions.

4) Usually I am only working on one live deal at a time. Maybe two if I am in the initial phase of one and closing the other. Each deal will be take about 60 days to complete from start to finish (from initial underwriting to closing).

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Mar 25, 2016

Thanks for doing this. I have a few questions:
1. What made you want to get a MSF and MBA? Would you recommend getting both or just one?
2. How was the transition from big 4 to your role at RMR?
3. I'm about to graduate undergrad and looking for acquisitions analyst roles. I go to a non-target. I have a mentor, working on dev and acquisitions deals so I'm getting more of a grasp, but I haven't been exposed to ARGUS yet and the certification course is out of my price range at the moment. Do you have any suggestions on how to be a better candidate for roles?

Mar 22, 2016
BubbaBanker:

Thanks for doing this. I have a few questions:1. What made you want to get a MSF and MBA? Would you recommend getting both or just one?2. How was the transition from big 4 to your role at RMR?3. I'm about to graduate undergrad and looking for acquisitions analyst roles. I go to a non-target. I have a mentor, working on dev and acquisitions deals so I'm getting more of a grasp, but I haven't been exposed to ARGUS yet and the certification course is out of my price range at the moment. Do you have any suggestions on how to be a better candidate for roles?

1) I got an MSF, and chose Boston College in particular, because: a) I wanted to be in Boston and only west coast companies recruited out of my school; b) my undergrad is an non-target an no larger firms recruit from there. I outlined in a post up above my reasons for an MBA. I am happy to answer more specific one is you have any. Also, I would NOT recommend both if you don't have to.

2) The transition was great. I did enjoy learning the financial statements while auditing and seeing different companies, but besides that auditing was not the most fun. Mainly because I was not interested in it.

3) If you have time, try to get a part-time internship (even if it is unpaid) at any real estate company near you. Don't worry too much about the Argus training if you don't have the $$. I would recommend you take some RE modeling training such as Breaking Into Wall Street. Start grabbing coffee with as many real estate professionals as you can. If you are not already, start reading market reports on the markets you are interested in. All the major brokerage houses (JLL, CBRE, C&W) put out these quarterly reports for free.

Let me know if you have any other questions I can help with!

Mar 25, 2016

Great read, thanks for the post.

One question: Your thoughts on Masters of Real Estate programs? For acquisition analyst roles, do you think this degree could open doors?

Looking to make a career change from construction project management, currently working for a major developer in NYC. Looking to gain finance skills but not overly enthused with the time/$ commitment required of an MBA. Recently accepted at Columbia and NYU programs.

Thanks.

Mar 22, 2016
wdav66:

Great read, thanks for the post.

One question: Your thoughts on Masters of Real Estate programs? For acquisition analyst roles, do you think this degree could open doors?

Looking to make a career change from construction project management, currently working for a major developer in NYC. Looking to gain finance skills but not overly enthused with the time/$ commitment required of an MBA. Recently accepted at Columbia and NYU programs.

Thanks.

I'm not terribly familiar with the MSRE programs but I know there has been a lot of discussions on this formum. @CRE or @CRE care to opine?

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Mar 26, 2016

You can get an acquisitions position out of NYU. Recruiting at NYU is very hit or miss though. I would look carefully into Columbia's recruiting to make a decision. PM me for more info.

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Dec 8, 2017

I am a finance with a specialization in real estate student at Kaplan University. What do you think about my prospects of getting an acquisition

Apr 7, 2016
wdav66:

Great read, thanks for the post.

One question: Your thoughts on Masters of Real Estate programs? For acquisition analyst roles, do you think this degree could open doors?

Looking to make a career change from construction project management, currently working for a major developer in NYC. Looking to gain finance skills but not overly enthused with the time/$ commitment required of an MBA. Recently accepted at Columbia and NYU programs.

Thanks.

In my opinion, you situation is 100% why someone should get a MSRE/MRED degree. You have experience and insight in a similar field, a solid name on your resume, need to sure up a specific shortcoming in your skillset, and you don't want to drop big money over two years to get a generalized degree. Not trying to blow smoke up your ass, @wdav66 but I think you're a prime candidate.

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Mar 26, 2016

Looking back, if you had the choice to work in the big4 right out of college, would you still have done the msf?

Mar 22, 2016
QatalystV2:

Looking back, if you had the choice to work in the big4 right out of college, would you still have done the msf?

If Big 4 in Boston recruited from my school (or any reputable finance firm on the east coast for that matter), I would not have done the MSF.

Mar 27, 2016

Thank you so much for this AMA! I'm graduating in December, had an IB internship last summer (RayJ) but have my heart set on REITs/REPE. After reviewing the previous form posts, most of my questions were answered previously, but I have one left: do you see any value in the CAIA certification, or do you see any of your colleagues with it?

Mar 22, 2016
fsujlinc:

Thank you so much for this AMA! I'm graduating in December, had an IB internship last summer (RayJ) but have my heart set on REITs/REPE. After reviewing the previous form posts, most of my questions were answered previously, but I have one left: do you see any value in the CAIA certification, or do you see any of your colleagues with it?

There are very few people at a REIT/REPE who have the CAIA certification. I would not waste my time with it as the return is not there.

Feb 27, 2018

.

Mar 22, 2016
<span class=keyword_link><a href=//www.wallstreetoasis.com/finance-dictionary/what-is... rel=nofollow>alpha</a></span>.beta:

Thanks for doing this.

1) How did you manage to transition from EY's audit practice to RMR acquisitions?2) Did you in prepare in advance through networking etc?3) Was it a difficult/easy process to transition over?4) Any advice you have to offer for someone who is potentially trying to follow the same path?

1) I worked through 3 or 4 different head hunters and told them all that I wanted to focus on RE companies. I also applied to every RE job that looked somewhat interesting. Ultimately I got the RMR job through a headhunter.

2) I spoke with a lot of people in the RE industry before I started interviewing and applying to jobs. I wanted to make sure I knew they type of role I wanted and was knowledgeable about the RE industry. I also took a RE modeling course just in case that ever came up in an interview (which it did not). Additionally, I tried to touch any parts of RE as I could while at EY (asked specifically to be on the RE loan portfolio of a bank I audited).

3) The process was not easy by any means but not incredibly difficult either. I had to apply to a lot of places and work simultaneously with multiple headhunters to get the job. Ultimately I got interviews at 3 RE firms. 1 said "no", 1 said "maybe" and RMR said "yes". The transition is very doable, just be prepared to do a lot of hustling.

4) a) Start networking w/ as many RE professionals as you can. Do this by grabbing coffee/lunch. If you don't know anyone, reach out to people on LinkedIn. You'd be surprised how many people are willing to connect and have an informational interview with you.

b) Take a RE modeling course. I personally took Breaking Into Wall Street's course and found it useful. After you take the course, put that on your resume. If you have the resources, also take an Argus training.

c) While in audit, try to get on a company that touches RE. If you cannot, try to get into the RE valuation group.

d) Join a RE association in your city and take an active role. Be sure to highlight this experience in your resume as well.

e) Start applying to jobs and talking w/ headhunters.

Let me know if you have any other questions!

Mar 25, 2016

Love the enthusiastic insight @CRE . Much appreciated.

Apr 7, 2016

Make sure you network like crazy before and during school too. MRED programs don't have the OCI base and typically don't hold your hand through your job search.

Apr 9, 2016

I have a question about age. Is it rare for someone to get into REITs either on the analyst side or trading/brokering side in their early to mid thirties?

Thanks!

Apr 10, 2016

Off the cuff, I should yes.

As it is technically illegal to ask or judge a candidate based on age companies will do it anyway. So you can doctor your resume by taking off your graduation date, and then appropriate irrelevant work experience. This is not dishonest if you can do the job.

There is always an outlier, but that person is probably not you.

Apr 9, 2016

Thank you for the input, C.R.E Shervin. uphill battle at best, it seems.

Mar 22, 2016
PonderingWhileSquandering:

I have a question about age. Is it rare for someone to get into REITs either on the analyst side or trading/brokering side in their early to mid thirties?

Thanks!

Sorry for the late reply, I was traveling the past few days. Yes, it would be quite difficult to break in as an analyst at a REIT if you are in your 30's. If I were sifting through resumes and I came across someone with 8-10yrs experience applying for an analyst position, my first thought would be, "would this guy be willing to be under people who are 5-7 years younger than him and be willing to do the lowly analyst work?"

Dec 8, 2017

I am a 35 year old studying finance with a real estate specialization at Kaplan University. I have no experience in this field. What do you think would be the best route for me to take in this situation?

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Apr 9, 2016

Great read. I started out in audit at one big 4 firm and switched to TAS at another when I could get an acquisitions position. After a year, I have decided to put my name out there. I have been talking to a fund about an Asset Management position, fund isn't small but not public or huge on staff. Should I hold out for the acquisitions? Or just bust my ass and hope for the best? Big 4 sort of ruined my trust in moving around internally.

Mar 22, 2016
Midwest86:

Great read. I started out in audit at one big 4 firm and switched to TAS at another when I could get an acquisitions position. After a year, I have decided to put my name out there. I have been talking to a fund about an Asset Management position, fund isn't small but not public or huge on staff. Should I hold out for the acquisitions? Or just bust my ass and hope for the best? Big 4 sort of ruined my trust in moving around internally.

Obviously an acquisitions role would be ideal. However, if the offer is with a good firm, offering good experience (working on dispositions, repositionings, etc.), and you are not having traction with an acquisitions job, I'd take it. As I stated earlier, it is very common to switch from Asset Management to acquisitions.

Also, many real estate companies are decreasing their acquisition volume substantially in 2016. There is a fear in the RE world that the market is getting too frothy. So, in light of that, I would not expect acquisitions jobs to be as plentiful as they were in the last few years.

Let me know if I can answer any other questions!

Mar 25, 2016

How much travel is required/necessary for someone in an analyst/associate acquisitions role at your firm?

Mar 22, 2016
littleflipper:

How much travel is required/necessary for someone in an analyst/associate acquisitions role at your firm?

You will likely travel about once every 2 months and once every month at the very most. Travel increases quite a bit as you become more senior. Senior people (director/MD) travel about 1-2 times every month. But those trips are usually 1-2 days so it is not very taxing (unlike consulting for example).

May 14, 2016

First off, thank you for taking the time to answer questions. I am currently a valuation analyst for a REPE shop. I value and handle residential real estate for my firm. mostly stabilized properties but some are value add. I would like to transition to an acquisitions role and i was wondering if you have any advice or suggestions on how to do that. I have a solid foundation of the modeling and financial aspects about commercial real estate but i don't have much experience in DD or other aspects of acquisitions. I don't want to get pigeon held in a valuations role so I'm wondering if you have any advice to make that transition.

much appreciated.

Apr 24, 2016

Thanks for making this. I am confused about one step in the acquisitions underwriting process, and am hoping you can expand:

I know most OMs are sent out w/o much price guidance. What process(es) do you use to internally determine price so that you can solve for your IRR? Is it less scientific (aka using in-place NOI and applying a market cap rate and then adjusting accordingly based on how badly you want the deal)? Or, is it more scientific (aka doing a full blown DCF so that you determine value, and then using that figure in your IRR cash flow analysis)? My gut tells me the former, but I'm not in acquisitions so I really have 0 clue.

Apr 24, 2016

You would typically look at comparable trades on a per unit/key/sf basis and throw in a number as a placeholder. Then you'd run a DCF and solve for a PP price that enables you to meet your discount rate. If this is substantially below indicative pricing, so be it.

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Mar 22, 2016
indexmatch:

Thanks for making this. I am confused about one step in the acquisitions underwriting process, and am hoping you can expand:

I know most OMs are sent out w/o much price guidance. What process(es) do you use to internally determine price so that you can solve for your IRR? Is it less scientific (aka using in-place NOI and applying a market cap rate and then adjusting accordingly based on how badly you want the deal)? Or, is it more scientific (aka doing a full blown DCF so that you determine value, and then using that figure in your IRR cash flow analysis)? My gut tells me the former, but I'm not in acquisitions so I really have 0 clue.

@reacquisitionsnyc provided great insight. I'll provide a bit more.

Even though OMs many times are sent without guidance, the truth is, if you call the broker, they will give you guidance. They will never say, "Put in an offer to what you think is best!" Instead, they'll say, "We are expecting the deal to trade in the mid-to-high 6.0% cap range". From there you can run the low end of the guidance range through your model and see how this compares on a per SF and cap rate basis to other comps in the market. You can also see how the returns at the price high range work for your company's return threshold.

Mar 23, 2016
RE Bootcamp:

indexmatch:Thanks for making this. I am confused about one step in the acquisitions underwriting process, and am hoping you can expand:I know most OMs are sent out w/o much price guidance. What process(es) do you use to internally determine price so that you can solve for your IRR? Is it less scientific (aka using in-place NOI and applying a market cap rate and then adjusting accordingly based on how badly you want the deal)? Or, is it more scientific (aka doing a full blown DCF so that you determine value, and then using that figure in your IRR cash flow analysis)? My gut tells me the former, but I'm not in acquisitions so I really have 0 clue.

@reacquisitionsnyc provided great insight. I'll provide a bit more.

Even though OMs many times are sent without guidance, the truth is, if you call the broker, they will give you guidance. They will never say, "Put in an offer to what you think is best!" Instead, they'll say, "We are expecting the deal to trade in the mid-to-high 6.0% cap range". From there you can run the low end of the guidance range through your model and see how this compares on a per SF and cap rate basis to other comps in the market. You can also see how the returns at the price high range work for your company's return threshold.

I will add one thing - a majority of brokers are building a cushion into their guidance (i.e., guiding to the very high end of the range). From what I've seen this can be 5% to 20%, sometimes even more. Although other brokers will give reasonable guidance the first go round.

Apr 27, 2016

This is some really interesting information, thanks for doing this.

Dec 2, 2016

This has been a really interesting read, I'm considering going into RE post MBA in a few years and am trying to learn about the field as much as possible.

Are there any books or outside resources you might suggest to someone trying to learn more?

Dec 8, 2017

Thanks for posting this thread. I am currently studying finance with a specialization in finance at Kaplan University. One of the options I want to pursue it to work for a REIT like you do. Do you think Im on the right path? Any suggestions about internships once Im done?