Can anyone speak to real-estate (asset-level) IBD experience?
I've read most of the threads on WSO on this but couldn't find very comprehensive information, from what I understand, real-estate IBD is a controversial title and can refer to two separate types of banking 1) advisory for REITs, developers and the likes on a company level; 2) selling individual buildings, which is asset-level advisory
Can anyone speak to the experience gained in the latter type (asset-level advisory)? in terms of day-to-day responsibilities, skills learned, exit opportunities?
What about asset-level advisory vs company level advisory? which is considered better in terms of learning/developing yourself and in terms of exit?
Thanks for your help!
Bump
They are radically different career fields. The former is true investment banking the likes of which you'd see on Wall Street; the latter is quasi-investment banking and, in my view, the best experience for those who want a career in real estate generally. My boss is the head of our company (an owner/operator/investor) and spent 15 years in asset-level investment banking at a large, national firm. He literally learned EVERYTHING about the business, from lease structures to valuation, development analysis to property management, appraisal to equity structures, lending (obviously) to surveying--I mean, ev.ER.y.thing. When you get hundreds--maybe thousands--of reps on deal after deal, you learn the business the way you know your native language--fluently and innately.
Exit opportunities at the asset-level are almost anything, depending upon the type of firm you're at (national vs. local, respected vs. not respected) and your personal responsibilities and experience. PE, principal, development, anything.
Could you elaborate a bit on the difference between the two? I was planning on recruiting for IBD post top 10ish MBA but am increasingly becoming more interested in CRE. I was under the impression that while RE IB worked at the company-level, there would still be asset-level analysis and portfolio sales as well. Is that not the case? The idea of just raising equity for REITs is less appealing to me than being able to work on asset-level deals as well.
For the sake of a clear comparison, what would be the difference between say BAML REIB, Eastdil REIB, and Eastdil Equity Sales?
Essentially, at its most basic level, and of course cross over can occur, Eastdil Equity Sales will sell a stake in a building, such as selling the Empire State Building. Eastdil and BAML REIB will generally work to raise equity / debt for a REIT such as SL Green. That's not to say that Eastdil equity sales may not assist Eastdil REIB, but it is where they focus. Some traditional REIB teams may pitch the largest building sales. If you read the book "Other People's Money" you will see that a traditional REIB team actually pitched to sell Stuy Town. If the deal is large enough, a traditional REIB team might go after it.
REITs are traditionally valued with NAV. So yes, you do look at single asset valuation in traditional IB.
The reason I say to focus on traditional REIB to start is, let's say you want to go to a Blackstone type firm after, your best shot is out of a traditional IB. Some of the largest developers across the country also prefer people with traditional REIB experience. They want kids that they know can burn the midnight oil and model. (This is directly out of HR's mouth). Essentially, traditional REIB will provide you with a wider range of options, whether you choose to stay at the entity level or move to the asset level.
Thanks, sb +1
anyone got more insights? thanks in advance
I work in Debt Placement on the asset-level and it's quite difficult to tell people what I do because there is literally 10 different names to the business. Although, I do try to stay away from calling it true IB. I can attest to the fantastic experience you gain, you pretty much are a jack of all trades after the first 6 months. The learning curve is steep, but with a good team you will be an effective analyst rather quickly.
I don't think asset-level or company-level exit opps are truly the same. Both careers will give you tremendous experience; however, in slightly different ways. I assume if you work on the company-level side your modeling skills will be more nuanced, as the deals you will be working on will have more moving parts. However, if you work on the asset-side and truly love RE, your exit opps will be fantastic: REPE, Lending (CMBS, Life Co., etc.), REIT.
I work at a BB Conduit shop, and I am lucky enough to work on some deals that requires the traditional IB team. I can assure you that they do not do the same type of work as a Real Estate Analyst at HFF, JLL, and CBRE. The one exception to that is Eastdil, the one and only true RE IB, but even then, it depends on the group you're in. You can end up as at a RE PE firm through either way.
Regardless of the group (leasing, equity sales or debt) you land, I would say that understanding leases is going to be the majority of your work. Day to day, your job as an analyst can range from typing in numbers into a spreadsheet (Argus), preparing OM books, or deal management. The work doesn’t require a CalTech PhD.
However, I will say, given that the RE work doesn’t require a PhD, traditional IB is more prestigious and affords you far a wider range of exit opportunities. I have seen IB analysts end up at RE PE firms, but I have never seen someone from RE move into say traditional Corporate PE. With that said, I will say that if your goal is a RE PE or developer shop, the RE brokerages are going to be the best place to be. Your exposure to different types of assets and transactions will be unmatched.
I would urge someone to think of exit options in a broad set. Being in a traditional REIB group will allow you to recruit for a larger amount of REPE firms. Some firms prefer people with "traditional" investment banking experiences because of what you learn. Other firms don't care. Just some food for thought.
Aren't there more traditional REIB groups than asset-level IBs though? I've been researching asset-level roles post-MBA and it seems like only Eastdil keeps popping up. On the other hand, almost every investment bank that you can name has a traditional REIB group.
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