Anyone else not for that deal life?

I get it, its sexier, probably higher paying, and more prestigious. Personally I don't think its worth the stress, I'm looking for a way out very soon, maybe still in real estate but something on the management or operations side of things.

Curious to hear if anyone has made a similar transition

 

This happens to a lot of people, not just in RE but in IB and PE. I began in real estate investment banking in a very small boutique firm that basically lived and died by fees generated from closing deals. It was very stressful all round, I left right before the 08 crisis hit (more or less saw it coming, at least with respect to what we did). I am now in research and strategy, like it a lot more (this is really a super personal thing, it fits my own highest and best use, not for everyone).

Since I work for a principal investor/developer, still get to be part of the fun, but I'm not as directly in the line of fire. You always have options, going to asset management is usually the easiest transition point and I'm not sure the pay structure will be that different (a lot of firms reduced the difference post 08, still 'sexier' on acq, but many firms leveled the bonus structures substantially).

 

Good to hear that it happens more often then I thought, I'm also at a small firm (10-15 employees) so wear many hats which I think is pushing me over my limit.

I'm actually surprised some people in this thread mention development as less stressful. In my eyes I was looking at it as even more stressful with LPs hitting you up for updates, tight deadlines, etc.

 

Go look at the IB board, they talk about 'exit ops" before even starting the job, they basically know they will probably hate it.

Development is generally 'slower' compared to any transnational deal business. There are still deals, closings, due diligence, and all the rest, but it is far more infrequent. Further, the developer has more control and options. It's very different being on the buy side than the sell side to put it bluntly. Developers have to worry about raising capital and securing loans, or however else they finance their deals, that is probably the most stressful task. Other stressful tasks are getting city approvals, sales/leasing, etc. But all of those are 'slower' and the developer has more control, hence why people say it is less stressful.

 

It is VASTLY overestimated on here how many people are going to be "deal makers" or the next Sam Zell. Reality is MOST people in the real world are going to have a salary plus bonus structure earning around 200-300K range. Real estate might be entrepreneural but look around you, excluding brokers, most of your peers are getting paid a salary plus bonus. That is the harsh reality.

 
Most Helpful

Harsh reality of $200-$300k/year? I'll take that, thank you very much!

Haha, actually though you're right. First everyone thinks they will be the top analyst/associate anywhere, memorizing any and all modeling questions/formulas, can write the best IC memo out there, and can underwrite any type of deal structure with ease. Then comes time for the VP stage and those same analysts/associates who were freaking out about who was the best at excel or Argus, now are stuck holding the bag because they never enhanced their production skills and that's what carries you from VP and beyond.

Also, OP thanks for writing this. I'm sure there are more individuals out there with the same mindset, but were hesitant to say anything since everyone on here appears to be that deal-chasing nut.

 

Haha, I will take it as well, that is solid middle/upper middle class in most areas. Underwriting or asset management in the debt or equity side is a solid gig with good work life balance . Ride it out for a while and you will be in the 200K+ range. Not sexy as development, but again most people are not developers, they are development managers and get paid a salary+bonus.

 

I think people also underestimate the time it takes to advance, get good at a job/skill/role, and actually add value. Too much, 'they want to hire me because I went to X school and worked at X firm'... total bullshit. They only want to hire you because you will add X value or make X money for the firm, delivering massive value isn't something someone right out of school is likely to do (nor really expected to do).

 

One way would be to own a few properties and manage them yourself. Then you meet a few investors and they hate managing their own properties so you offer for a monthly fee. You really have to scale quickly or not need a ton of money to live on because it takes a lot of units to make it.

My current property manager did it this way. She managed about forty or fifty rentals for her fiance and when he died he had never written her in his will so his ex wife got all of his properties. She was left dry and started managing properties for a few other investors she knew in the business.

 

The "deal life" definitely lends itself to a type of person/personality/worker, usually on-the-go and always on the lookout for an edge, etcetc.

That being said, the other side of the coin has its own issues. In my role I get to work on acquisitions, development, & asset management (+ little bit of property management). Each function has pros and cons, and you'll likely be stressed out by something going on in any role. (Stress has more to do with your perspective on life & work IMO.)

Acquisitions: trying to get a deal done Development: managing City, managing consultants, managing costs, managing construction, managing timelines, managing leasing AM: dealing with investors, monitoring property performance, looking for efficiencies to safe cents on a psf basis, dealing with tenants

Regarding compensation... if you bring revenue in to the firm, you'll be compensated appropriately, and that is true across any industry in the world. In general though, you can get paid decently well if: you add value &/or you are hard to replace. Typically those require expertise, and expertise requires experience.

 
KClubs:
The "deal life" definitely lends itself to a type of person/personality/worker, usually on-the-go and always on the lookout for an edge, etcetc.

That being said, the other side of the coin has its own issues. In my role I get to work on acquisitions, development, & asset management (+ little bit of property management). Each function has pros and cons, and you'll likely be stressed out by something going on in any role. (Stress has more to do with your perspective on life & work IMO.)

Acquisitions: trying to get a deal done Development: managing City, managing consultants, managing costs, managing construction, managing timelines, managing leasing AM: dealing with investors, monitoring property performance, looking for efficiencies to safe cents on a psf basis, dealing with tenants

Regarding compensation... if you bring revenue in to the firm, you'll be compensated appropriately, and that is true across any industry in the world. In general though, you can get paid decently well if: you add value &/or you are hard to replace. Typically those require expertise, and expertise requires experience.

 

These days asset managers live a pretty sweet life with how more comparable their pay is getting to acquisitions. The difference is not big and they will have the experience to go off on their own if they really wanted to cause they understand how to get a property to perform.

They get a perfect work/life balance.

 

Everyone is going to need to be at least a little about "that deal life" on the principal side or you'll top out eventually.

I will readily admit it isn't my favorite part of the job as a developer, and I couldn't imagine being an analyst just cranking out model and memo after model and memo day after day, but I'm not going to have anywhere to build cool stuff if I don't find the dirt or someone I work with doesn't find it for me.

You can always try to find complimentary partnerships down the road, in which you partner with someone who excels in an aspect of real estate you don't or at least don't like, but finding dirt or buildings to buy is a pretty essential part of the business one way or another.

Commercial Real Estate Developer
 

Seriously, so called IB life has nothing to do with life. I intend to live longer than rest of the cohort, period.

 
Analyst 1 in Other:
Seriously, so called IB life has nothing to do with life. I intend to live longer than rest of the cohort, period.

What are you even talking about? This isn't he IB forum and has nothing to do with longevity.

Commercial Real Estate Developer
 

I did 3.5 years in acquisitions for a distressed MF in NYC. The dealflow was insane back then (now almost dead). I loved the job but the hours/deadlines were too much for the long term. Did the switch to AM for the same firm but in London and never looked back. It's been almost 4 years. 9am-6/7, a few crappy weeks during reporting cycles but that's it. Job is fun. Love the culture there, can cheaply travel in Europe during the weekends. Maybe I took a small paycut, I don't care... I'm still making too much money for my lifestyle

 

You aren't alone. I've done a little bit of everything over my 15 year career and I figured out long ago that while I loved RE, I wasn't a deal junkie. For the last 8ish years I've been working in debt AM. Things are a bit crazy right now, but generally speaking, I make good money, have great work/life balance and really enjoy both the deals I work on and the borrowers/teams I work with.

 

Temporibus in voluptatum hic quos. Dicta ullam maiores pariatur totam cupiditate. Rerum facere impedit nihil doloremque.

 

Consectetur molestiae cumque mollitia magnam nulla nam dolor. Explicabo molestiae quidem eos veniam quia nulla. Commodi et sed veritatis temporibus. Nisi hic vero odio optio. Excepturi et eligendi tenetur natus asperiores quas molestiae voluptas.

Harum eaque fugiat deserunt enim incidunt. Velit quasi consequatur eligendi magni eum ipsum ducimus. Aut aliquid non est fuga tempora. Perferendis nemo itaque natus ea facilis eum soluta. Officia harum adipisci est suscipit est repellat omnis labore.

Quas enim nihil voluptatem cumque dolores. Rem nesciunt ab eos doloribus tempora quia rem. Voluptatibus quaerat quo quisquam quia fugiat enim.

...but is it REPE?

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
dosk17's picture
dosk17
98.9
6
CompBanker's picture
CompBanker
98.9
7
kanon's picture
kanon
98.9
8
GameTheory's picture
GameTheory
98.9
9
DrApeman's picture
DrApeman
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”