Career Moves Out of CRE Brokerage

Hello WSO--

I'm in a bit of transition and was hoping some of the members here could offer some advice.

I have an MBA from what I believe would be classified as an upper second tier university. I grew up around real estate (warehouses) and have been working approximately 3.5 years in CRE brokerage with a national firm selling smaller multifamily deals. I have sold approximately 25 deals for a total of approximately $25M in that time (around 250 units total). but I'm not in love with the brokerage side of things.

Partially because I feel there are better roles that match my personality better (I'm a natural introvert and prefer to stay away from conflict rather than be mediating it), and partially because I'm not ready to call my current city home for the next 30+ years (multifamily brokerage tends to root you to one city), I am evaluating different paths to take from here. I could see myself potentially returning to brokerage eventually once I am in a city I know I want to be in long-term, but that is irrelevant for this discussion, other than the fact that I know I can make big money in this field and cannot ignore that when evaluating alternative career paths. I know it's probably on the low end of the WSO-perspective, but to me big money is north of $150k/year in a metro that doesn't feature San Francisco, Manhattan-esque cost of living.

I am 31, no kids, not married, have some money saved up, and have good support from the family if needed, so I do have a bit of rope to play with and do not need to come out the gate looking to make six figures. That said, if there isn't a path to six figures within three to five years, it's probably not something I can seriously consider now that I have had some success in brokerage and have seen how much good brokers can make in this business.

I am most interested in getting into the investment/development side of things, since that was always the endgame I had targeted (owning my own real estate, forming a private company/group that owns real estate, or working in a company that owns real estate and allows employees to take an equity stake in deals).

I see numerous Analyst job postings (financial analyst, real estate analyst, acquisitions analyst, etc.) that I feel I could get callbacks on, but it seems like most of these positions start pretty low from a pay perspective. What does the progression look like for someone that starts off in an entry-level analyst role, is good at it, and busts their hump? (I am used to working 50 to 60 hours a week, so hard work doesn't intimidate me). Is six figures attainable within four years? What vertical or lateral moves can an analyst role lead to?

I have also considered trying to get a job in local government to understand entitlements, permitting, economic development incentives, etc. as I believe that would be a good springboard to working for a developer.

Property management seems like a dead end unless you want to form your own property management company down the road, which is not something I have a desire to do. Correct me if I'm wrong...

Basically, I'm just trying to figure out A) if an entry-level analyst role has a viable career path to a reasonably lucrative position within five years (and what that path looks like), and B) what other lateral moves I can make out of brokerage with my current resume that I am not thinking of.

Any help is much appreciated! If there is any additional info I can provide to help in your suggestions please let me know. Thank you for any help you may be able to offer.

Comments (20)

Best Response
Aug 9, 2016
ThatRealEstateGuy:

I have an MBA from what I believe would be classified as an upper second tier university. I grew up around real estate (warehouses) and have been working approximately 3.5 years in CRE brokerage with a national firm selling smaller multifamily deals. I have sold approximately 25 deals for a total of approximately $25M in that time (around 250 units total). but I'm not in love with the brokerage side of things.

Partially because I feel there are better roles that match my personality better (I'm a natural introvert and prefer to stay away from conflict rather than be mediating it), and partially because I'm not ready to call my current city home for the next 30+ years (multifamily brokerage tends to root you to one city), I am evaluating different paths to take from here. I could see myself potentially returning to brokerage eventually once I am in a city I know I want to be in long-term, but that is irrelevant for this discussion, other than the fact that I know I can make big money in this field and cannot ignore that when evaluating alternative career paths. I know it's probably on the low end of the WSO-perspective, but to me big money is north of $150k/year in a metro that doesn't feature San Francisco, Manhattan-esque cost of living.

I got my start in brokerage (note some of the horror stories in my WSO blog in my signature) so I'll give my input. I'm what the internet calls an "outgoing introvert" and I'm perfectly able to be the life of the party and talk to anyone as long as I'm not forced to do it on a regular basis. Still, brokerage wasn't for me for the same reason and I never shook the feeling of being a slimy salesman.

One thing you should realize though is that most people don't bounce around between cities regardless of what type of real estate they're in. It's incredibly difficult to get a solid handle on more than 3-4, which is why all of the big players in development and REPE have branch offices that focus on specific regions. In my own short career I've bounced around way too much from city to city and it does suck putting time into making solid contacts only for them (and you) to disappear.

ThatRealEstateGuy:

I am most interested in getting into the investment/development side of things, since that was always the endgame I had targeted (owning my own real estate, forming a private company/group that owns real estate, or working in a company that owns real estate and allows employees to take an equity stake in deals).

I see numerous Analyst job postings (financial analyst, real estate analyst, acquisitions analyst, etc.) that I feel I could get callbacks on, but it seems like most of these positions start pretty low from a pay perspective. What does the progression look like for someone that starts off in an entry-level analyst role, is good at it, and busts their hump? (I am used to working 50 to 60 hours a week, so hard work doesn't intimidate me). Is six figures attainable within four years? What vertical or lateral moves can an analyst role lead to?

The first thing you should do if figure out if you want to be on the investment side or the development side. Investment pays better starting off, is more finance-heavy, and is more "hands-off" when it comes to the assets. Development pays less starting off, is more a coordination role between tons of moving parts, and is very "hands-on" when it comes to the assets. Different companies blend these roles in different ways too, so it doesn't have to be a black or white choice, but it helps to know "who you are."

With a MBA and 4 years experience by the time you start, you're a bit too advanced to be an analyst in the WSO/Banking sense of the word. That said, as I'm sure you know by now, titles in real estate don't mean anything and analyst and associate are almost entirely interchangeable. Still, don't target entry level roles because you're not entry level.

Pay for a development associate will typically be $75-$95k plus 10%-20% bonus. There's a thread on comp floating around here somewhere. The annual progression won't be anything impressive. The goal is to become a development manager and then get bonuses based on the asset meeting deadlines and staying on budget. You make quite a bit more in this role. Then, when you get up to Director or VP level, you typically get a piece of deals, are able to invest in deals, or get significantly higher bonus opportunities based on deal performance, based on where you work.

ThatRealEstateGuy:

I have also considered trying to get a job in local government to understand entitlements, permitting, economic development incentives, etc. as I believe that would be a good springboard to working for a developer.

Don't do this. First of all, it's a roundabout approach. You want to develop? Work for a developer. Don't work for anything but a developer. Second, it's public sector. Sad to say, but that means you'll be making $50k around people who come to work at 9:10 and leave at 4:50. I can't think of anywhere less entrepreneurial or inspiring. Then again...

ThatRealEstateGuy:

Property management seems like a dead end unless you want to form your own property management company down the road, which is not something I have a desire to do. Correct me if I'm wrong...

My second stop after brokerage, which I hated, was property management, which I hated even more. I did gain terrific insight into property operations, but similar to how I did not have the personality for brokerage, I most definitely did not have the type of customer-oriented, "fall on the sword," fake smile personality for property management. If you come tell me that your lightbulb is out or your toilet is clogged or what the fuck ever my first inclination is to tell you to act like a fucking adult and do something about it. That isn't really the right approach. Property management is even more soul sucking and is most certainly a dead end job unless you are some SVP of Greystar overseeing entire portfolios...and even then you still have to talk to the property managers who are almost universally low intelligence, catty, and petty.

ThatRealEstateGuy:

Basically, I'm just trying to figure out A) if an entry-level analyst role has a viable career path to a reasonably lucrative position within five years (and what that path looks like), and B) what other lateral moves I can make out of brokerage with my current resume that I am not thinking of.

Any help is much appreciated! If there is any additional info I can provide to help in your suggestions please let me know. Thank you for any help you may be able to offer.

It is a viable career path to a reasonably lucrative position within five years, but I want to reiterate that you aren't entry level. Don't discount yourself. The bests lateral paths for you will be Asset Management, development, or acquisitions/dispositions. On a very base level, developers build, asset managers maximize profitability, and acquisitions/dispositions buy and sell. There's a ton of overlap too, depending on the company, so one place might be very silo'd, another might have the asset management team and the acquisitions/dispositions team be the same people, another might have all three rolled into one, etc.

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Aug 9, 2016
CRE:

you still have to talk to the property managers who are almost universally low intelligence, catty, and petty.

I second this, (almost all) property managers in MF are the worst.

Jun 13, 2018

Property management in a nutshell towards the bottom there.

Aug 9, 2016

@CRE knows his stuff.

My boss worked for the public sector (deputy city manager for one of the top cities/burbs in the country) for 20 some odd years. He knows the entitlement process inside and out and he's a stud at dealing with the folks within the public sector. That said, he had an absolute bear of a time trying to make the jump from public to private sector. For one, the CEO of our company bleeds free-market capitalism and the thought of hiring a former public employee scared the shit out him. Second, he had to teach himself how to read and analyze profomoras in his 40s (he's the first to admit he was treading water for his first two years as a developer.)

In a nut shell, even though he gained some good skills from working in the public sector, my boss has told me several times that if he'd do it all over again he'd head straight into development.

Aug 9, 2016

@CRE, thanks for the reply.

I would likely be more interested in the development side of things. Things I like about brokerage are:

-- Every day is unique. I feel I would get bored quickly stuck behind a desk looking at spreadsheets 10+ hours a day.

-- Flexibility/Independence. Granted, I work like a dog so it's not like I'm sleeping in and taking three day weekends, but I still have the freedom to take off a couple of hours early on a Friday if I feel like it without getting the evil eye from some overbearing manager. Obviously there will always be deadlines that have to be met regardless, but I hate being micromanaged.

-- Getting out "in the field" -- I don't mind sitting behind a computer for an entire day or even a week or two at a time, but I imagine it would get old quickly if that was ALL I did all day, five/six days a week, all year long.

-- Working with people -- Although I'm naturally introverted, I do enjoy working and communicating with others to some extent. I just hate the dichotomy of sitting between two owners that both think the other is owner out to screw him, and think that the salesperson (me) is willing to sell his soul just to get the deal done. I have actually considered mortgage brokerage because I feel this would remove a certain amount of the "us vs. them" zero sum mentality that seems to pervade most real estate transactions.

I should also mention that although I do have experience underwriting and possess an MBA, I have never been "a finance guy" and most of the underwriting I have done has been for small apartment deals (read: very basic underwriting). My undergrad and MBA focus were both in marketing. I obviously wouldn't present it that way in interviews, but I have zero Argus experience (although I have watched videos and am fairly confident I could pick it up quickly). My firm provided very good/flexible templates for us to use for underwriting, so I understand how to read a ten-year model, perform property-level underwriting, know all the different financial indicators used etc. and can create one when the framework is already in place, but it would take quite a bit of polishing up on my Excel skills for me to be able to build one from scratch.

I know you mentioned that the annual progression upward from development associate isn't especially impressive until you reach the level of Development Manager. Is that something attainable within five years? How much can a Development Manager and Development Director make, respectively?

In general, what sorts of hours do Developer Associates/Managers tend to put in weekly? Not trying to come off as lazy, but I think people often forget the other side of the pay equation. Sure you're a big shot making $300k per year, but if it takes 80 hours week to make that check, I'd rather be in the camp making $150k/year but working 50 hours a week and still have some semblance of a functional, enjoyable life.

Also, if you were trying to get your foot in the door as a Development Associate, what would be the ideal route? A national real estate company like a CBRE? A private investor/developer like Greystar? A national/regional merchant developer? Would you be more inclined to go with a company with a large national presence like CBRE that will likely have more opportunities for outside candidates and internal growth opportunities, or a successful smaller boutique/regional developer where your work is more likely to be noticed? I really hate "corporate environment" feeling offices, so I would likely prefer to gravitate to a company that has a bit more personality and personal successes are more likely to be acknowledged/rewarded. I don't play politics or brown-nose, so it's important that I can grow based on the merit of my work rather than based on who's ego I am or am not stroking properly.

Last, would my background be given much credit across product-types? For instance, I see a huge future opportunity in anything related to health care or affordable housing. Would my background in multifamily sales be valued to a developer of assisted living/seniors communities? What about retail or industrial?

Also, this:

If you come tell me that your lightbulb is out or your toilet is clogged or what the fuck ever my first inclination is to tell you to act like a fucking adult and do something about it.

My thoughts exactly haha. I have heard so many second-hand stories from owners while in brokerage, the thought of dealing with these idiots that can't barely lace their own shoes while having to wear an apologetic smile rather than pointing out that person's stupidity would drive me insane.

Aug 9, 2016

On a high level, development certain checks all the boxes as far as incorporating what you listed that you like about brokerage. Every day is certainly unique, independence is there, getting out in the field is too, and your entire job is coordinating people to achieve a desired goal.

Development financing isn't rocket science, and underwriting especially can be learned quickly, but you might want to take some REFM or related online coursework to brush up so you can speak intelligently about it.

Progression toward development manager role is certainly attainable within five years, but this is going to vary wildly from company to company, product type to product type, and how the market looks. People usually get this promotion out of necessity, i.e. there are a shit ton of projects going on and someone needs to run them. If the market dips, that need isn't there. The hours are very project dependent too, but it's not a 9-5 job and it's not 100 hours a week like banking during peak hours. You might put in 50 one week and 75 the next. Big "important" firms usually mean longer hours.

To get into development, you again want to get as close to development as possible. CBRE is a fantastic firm and a great name to get on your resume but they're still mainly brokerage. Wouldn't be the first place to target, but would hardly be a bad start. Greystar's development team would be a miraculous place to start, but that might be stretching it a bit.

In terms of office culture, you can definitely find an institutional-grade firm that lacks a suffocating corporate environment. Real estate as a whole is far more laid back than the other industries discussed on this site. I'm in navy blue khakis, a brooks brothers polo, and loafers with goofy socks at the moment. I haven't shaved since yesterday morning.

Product type - there are as many companies that specialize as there are that don't. Typically you'll end up on a team that does one specific thing. Since you're going in "fresh" - I would try to target firms and teams that build what you want to build.

    • 1
Aug 9, 2016

@CRE

Thanks for taking time to reply with such detail. Here, have a banana! haha

Sounds like I need to do some more digging and start of building a list of potential developers to reach out to.

Out of curiosity, how would Tenant Rep differ from Investment Sales? Obviously you are working with tenants to understand their needs and try to match them up with a suitable space. But in terms of potential earnings and deal flow? Even though it's nice being able to double-end sales in Investment Sales, I do like the idea of representing one party rather than both because at least I know who I'm fighting for. Would getting exclusives for tenant rep be more or less competitive than exclusives for investment sales? Similar income potential (assuming you are working on good-sized deals)? I don't think this is where I would like to direct my career, I only ask because I just received an unsolicited message from a recruiter today:

...a unique and very entrepreneurial opportunity with a boutique tenant rep only brokerage.... This brokerage was created by the former founder of one of the large global real estate brokerages, and is growing quickly. We are looking to add 1-3 brokers to the team to help build and create opportunities nationally.

I'm guessing that if I was frustrated in Investment Sales, I am likely to be frustrated in Tenant Rep for similar reasons, but I thought it couldn't hurt to ask.

Aug 18, 2016

Ignore last post, I'm fairly certain working on Tenant Rep is not where I want to be. I know you mentioned that depending on the firm there can be quite a bit of overlap or little to no overlap b/w the roles of asset manager, acquisitions/dispositions person, and/or development associate. Assuming these roles are siloed within the firm:

-- Which roles offer the opportunity to be in the field and not perpetually stuck behind a desk? I'm assuming development associate allows the most, but I'm unsure how much or little opportunity the other two roles have to get out of the office.

-- Which roles offer the most flexibility in terms of lateral growth opportunities? (i.e. which positions will be valued for a variety of lateral career moves within real estate down the road if necessary. For instance, if I work as a development associate for a few years and find that I hate it, would it be just as easy to transition from development associate to asset manager as it would be to transfer from asset manager to development associate?).

-- Which roles would provide the most job security in the event of an economic downturn? I'm guessing that development associate would be least secure of the three...

-- Which of these roles are most likely to have $100k+ attainable in the next three years, and $200k+ in the next seven to ten years? I would like to think all three, but am unsure.

-- Which of these roles tend to offer the best work-life balance?

-- Which of these three roles would be easiest for me to break into with my current resume? As I mentioned, I am confident I can polish up my Excel skills and gain some familiarity with Argus one way or another, but I'm not sure how much value would be assigned to my sales/underwriting background once the firm realizes the average deal size I worked on was less than $1M when most of these firms are working with much larger deals and much more complex financial models.

Aug 11, 2016

I can help answer these to some extent:

-In any junior/mid level role, you will be behind the desk a large percentage of the time. You will need to learn that side of the business/processes (e.g., for development, the entitlement process, certificates of occupancy upon completion, city planning board/commission, etc.; for acquisitions, the analysis process, taking something to IC, the DD process, learning the submarket nuances, etc.). Once you master that aspect/how the business works, then you get to do fun stuff like doing site visits, industry events, investor meetings/presentations, etc. This is a case by case basis. For the right person at the right shop in the right opportunity, you could be doing some of that stuff as early as 6 months to a year, could take much longer though.

-Generally, entry/mid level jobs in an acquisition capacity pay the best base salary, with a pretty good bonus, whereas development you are looking at much lower base, but in some cases a lot higher bonus as a % of base. Asset Management is probably the most balanced in that the base is generally more than a development assoc. but the bonus will be less than both other roles. Six figures is definitely doable very quickly if not initially. Again, definitely sector/fund/group specific, but I'd say income potential is probably a toss up between acquisitions and development depending on where you are (if at a top regional player, development probably takes top spot over life of career, with REPE right behind). Asset management is probably a more flat growth path, but again, I've seen anecdotal evidence where all of the above does not hold true.

-As you can imagine, the work life balance is inversely correlated with income, so take what I said above and invert it for # of hours you can expect.

-You are correct in that during a downturn, development would most likely be the most unstable position of the 3. I had lunch with a friend at a regional shop the other day and he was saying that in the last dip, there were only the 3 top guys left at a group which had about 20-30 people prior. Then from there I think you could make an argument for either AM or Acq for the 2nd and 3rd riskiest. If you are at an operator that needs a large AM staff, probably more safe than AM at a value add shop which is basically waiting for a downturn so they can buy up the world, meaning that their Acq team would be pretty safe instead.

You can kind of see a recurring theme I'm getting at here in that this industry is much more relative/case-by-case and not as 'cookie-cutter' than a lot of other financial subsectors.

-With respect to what would be easiest to break into, I already alluded to my thought on that in my other post. To the UW comment, I don't know if it would be a huge value add to try and teach yourself the underwriting part. You would be better served paying a friend/colleague some money (or beer) to just come over a few times and run through a few deals with you. There's a very specific way that underwriting needs to be done in the institutional space, and rather than waste your time teaching yourself a way to do it that is inaccurate/not standard, just have someone start you off on the right foot. Then it just becomes about repetition/seeing a lot of different kinds of deals.

Aug 10, 2016

I've read a lot of CRE's posts and pretty much agree with all of what he says as another industry guy.

To add a little, as someone who started as an analyst at a brokerage firm and then transitioned to acquisitions at a REPE shop, I think your best bet is to try to go in somewhere as a mid-level dispositions guy, and then sort of 'morph' into acquisitions or another role. You as a broker will know more about the closing process / deal execution side itself than a lot of others on the buyside (with the exception of an acq./dispo pro who has been doing for quite a few years) and will be a value add on that end. Those positions are fewer/scarcer than a lot of other roles since many shops just have the acquisitions or Asset Management team do both or farm it out to a broker, but for the ones that are out there you will be highly competitive, and won't have to do an entry level stint. A lot of firms are fluid on the things they let you work on once they know you and like your work product/ethic, so it shouldn't be too difficult to get exposure to some of these arenas after a year or 2 of grinding.

I had a similar choice to make with brokerage vs. investment side in that the short term of brokerage had the potential to be much more lucrative, but if you don't like it you will burn out, and at the later levels of the investment/development side, if you're talented/hard working you will still have very high income potential on a slightly more predictable basis. Especially once you get to the point where you are seeing equity, there's a ton of upside.

    • 1
Aug 11, 2016
MonkeyWrench:

I've read a lot of CRE's posts and pretty much agree with all of what he says as another industry guy.

Fist bump

    • 1
Aug 18, 2016

Similar situation for me (working in Investment sales on the office/industrial side). I hope to leverage my connections in a few years and move over to the buy side (REPE). One thing I would say about the Argus stuff is yes, it's pretty much an industry standard. Why don't you use it in your current position? If you're at a top firm (CBRE/JLL/HFF/CW), I'm sure you would be. My advice is to get your hands on it if it is anywhere near available. Argus has its nuances but once you get the hang of it, modeling is not rocket science. I just imagine that a REIT would be looking for Argus knowledge in a candidate. Perhaps some guys in the real estate forum who are already on the buyside/REIT area would be able to shed some more light

Aug 18, 2016

I recently made the transition from top tier brokerage to the buyside and I had very minimal Argus experience. There is an Argus certification that you can complete and you can put on your resume that you are "Argus Certified". I was able to get my job without this cert but looked into it as a back up plan. Might be worthwhile to go for it, didn't seem too intense but cost a couple thousand for the whole course.

Aug 18, 2016

I'm signed up for Argus two-day course that I should complete in the next month or so. Does anyone have comments on my goal of analyst position for a few years and then Asset Management? Is that the correct path? I want to get out of sales/commission based job immediately. I truly like working on the spreadsheets/financial analysis part of the acquisition/disposition for my clients. The part I dislike is the shady sales stuff.

Aug 18, 2016

Are you at a full service firm where you can lateral into AM? You might be able to make it into AM analyst spot straight off, but it really is going to depend on your network. In Chicago there are plenty of smaller REITs, life cos and banks that have offices there. Try selectleaders.com and see if anything interests you.

Aug 11, 2016

I worked at Eastdil before and moved into traditional IB, which I like a lot more. Let me know if you'd like to chat.

Haters gonna hate

Aug 18, 2016
Aug 11, 2016
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