BB Real Estate Banking (comm lending) or boutique REPE

atb1's picture
Rank: Senior Chimp | 18

In need of a little career advice!!

I'm currently enrolled in a Master in Finance program at a regional target. I just recently accepted an internship in acquisitions for the Spring semester at a real estate private equity group with about $1 billion AUM. In the interviews, they said I would move into a full-time acquisitions analyst role after graduation if I did well, but I'm pretty sure the pay is below street. I am also recruiting with a few bulge-bracket real estate banking programs (not IB, think commercial lending and a little CMBS). In the long run, I want to land a cushy acquisitions analyst position with a large REPE group in my area.

My question is this - should I try to stay on the buy-side as an acquisitions analyst for a group with a small AUM and work my way into larger groups down the road, or should I do a RE analyst stint with MS/JP/Citi/GS and move back into acquisitions after 2-3 years? Which track is a more practical route to real estate investment managers with $10+ billion AUM?

Side-note: I'm aware REIB is a better option. My GPA isn't great, so I'm trying to break in the side door on this one.

Comments (16)

Nov 24, 2014

I would think if your end goal is acquisitions, then go with the repe shop (if they are active and have a good pipeline)....1 Billion AUM isn't really that small...my 2 cents

Nov 24, 2014

Depends on the deal flow for the acquisitions role, but I would recommend the MS/JP/Citi route as it provides a longer list of exit opportunities and a larger network.

Both are good choices IMO so don't sweat it too much.

Nov 24, 2014

Thanks for the responses guys.

Gene - do you think BB RECB will still make me a competitive candidate for the big REPE shops when I go up against the IB guys? If I stay in acquisitions, I can always say "I've been doing the EXACT job you're hiring for, just in a smaller setting", and I obviously lose that card if I go BB. But again, I can only speculate how much value they place on experience v. BB credentials, and how much the network would pull for me.

Jimbo - good point. $1b is respectable, but the comp could be a concern. Gotta pay back my excessive loans at some point (fight on...)

Nov 24, 2014

If you can try to do CMBS at major BB like DB or JPM. CMBS is going to very active over the next few years which will give you an amazing experience that you could use to get to the buyside in either a debt or equity role.

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

Nov 24, 2014

Agree with goodlife. We've hired people from both REIB and acquisitions at a smaller shop. My personal opinion is that direct acquisition experience is better, assuming the fund is active and you are actively meeting other people in the industry, but that's in a vacuum. In reality there is a ton* of real estate maturing in the next few years and people will be looking for that skill set.

(*) http://www.wiley.com/WileyCDA/WileyTitle/productCd...

Nov 25, 2014
Gene Parmesan:

Agree with goodlife. We've hired people from both REIB and acquisitions at a smaller shop. My personal opinion is that direct acquisition experience is better, assuming the fund is active and you are actively meeting other people in the industry, but that's in a vacuum. In reality there is a ton* of real estate maturing in the next few years and people will be looking for that skill set.

(*) http://www.wiley.com/WileyCDA/WileyTitle/productCd...

Definitely going to check this book out. Just ordered off Amazon.

What do you think is going to be the result of this wave of maturing real estate?

Nov 24, 2014

Both sound pretty good.

Nov 24, 2014

commercial lending is not sexy unless youre focusing on CMBS (which sounds like you would not)
id take the investment shop internship and try to spin that to a bigger investment shop full-time

Nov 24, 2014

You mention that pay is "below street". What market are you in and what is the pay? Both seem like great opportunities (assuming you get an offer from the BBs). Advice is dangerous, especially when there is little information to base that advice on. But based on what you gave us, I'd personally take the acquisitions job as it will be direct, relevant experience.

Nov 25, 2014

I know I'm lacking a lot of details that I'll need to make the decision, but generally speaking, if a top REPE shop is the goal, it sounds like...

BB CMBS > Smaller AUM acquisitions > BB commercial banking/lending

I have a few connections in BB CMBS - seems like it may be worth it to keep that door open after graduation.
Gene - awesome resource, much appreciated
AcquisitionsGuy - I shouldn't have used the term "below street". I hardly know what the standard entry-level pay is in REPE acquisitions, and it seems like it varies a lot by group and AUM. From my research, it looks like I can expect to make around 60k + 20% bonus. The group does value-added investing in multi-family and comm.

Again, thanks for all the input

Nov 25, 2014

Is this NYC? If its in another city, 60k+20% I think is considered pretty good.

Nov 25, 2014

It's in NYC. That said, I have friends either interning or working for shops in LA in the $5-20b AUM range, and all-in comp for a 1st year analyst with these groups is generally in the neighborhood of $70-75k + bonus. Small sample size, I know, but still...

Nov 25, 2014

I was wondering the CMBS that you guys prefer to is the origination role or it is more like underwriting role, structuring role, or trading role? I did not work in the CMBS space so I am not really familiar with it but, why is"commercial lending is not sexy unless youre focusing on CMBS"?

Dec 5, 2014

I would definitely go for RE analyst position in your case

Dec 14, 2014

I'd go REPE. Working on the commercial lending side, I've always wanted to move over to REPE. I've got a few connects I've been working, but if I could have started there, no matter how small, I would have.

Dec 14, 2014
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