Career Path in Commercial Real Estate

Specializing: Starting a Career in Commercial Real Estate

There are several different areas of specialization in commercial real estate. This list is should help identify some areas of interest but it is not all-inclusive.

  • Brokerage
    (mortgage and leasing)
  • Real
    Estate Development
  • Corporate Real Estate
  • Institutional
    Real Estate Investment

Commercial Real Estate Brokerage

Brokers often conduct business on behalf of a firm and they represent a buyer or seller in a transaction. Commercial real estate brokers earn a majority of their compensation via commissions. They can conduct business with corporations, institutional buyers and sellers, foreign and domestic business, as well as various other investment entities. A commercial broker will usually focus on a single type of property such as industrial, retail, office, lodging, or apartments. Brokerage is a client facing business that requires good people skills.
Here's an excerpt from 6 Tips For Networking Into A Commercial Real Estate Brokerage Firm from certified real estate professional @CRE"

. Last Night on Mad Men, Roger Sterling used a connection at the airport to "happen to bump into" a potential client. He talked to the guy, became fast friends, and got Sterling Cooper Draper Pryce into the pitch at the last minute by cultivating current relationships and forming new ones.

Not too far off from Sterling's world of 1960's advertising account executives, Commercial Real Estate brokerage is a career based entirely on relationships. Unlike banking, as a broker, your personality and people skills matter immediately. You aren't going to be spending a solid handful of years toiling behind the scenes and having an intimate relationship with Excel before you become client-facing.

Almost immediately you'll be on the phone, pounding the pavement, knocking on doors, emailing everyone, networking at formal and informal events, and your relationship with other brokers in your market, both within your company and outside of it, is just as important as your relationships with clients. If your personality sucks, so will your bank account (at least at first).

Real Estate Development

There are multiple different "levels" of real estate development. However, we'll take a look at two of the more popular levels, the entrepreneurial (i.e., starting your own firm and managing your own projects) and the established fund (i.e., joining the ranks at Hines, Tishman, or another established firm).

The following is a high-level overview of the business conducted by a real estate development entrepreneur. Once a firm has been established, the land will be acquired and prepared for development or a site will be purchased. The developer will then oversee the construction process. Commercial developers will usually have a specialization which is determined by the property size and type.

Here's an excerpt from From Real Estate Finance To Founder Of Development Company from a valued real estate community member, @subsix"

I left NYC for another city (between the coasts), and got a job with a local multifamily developer/investor. Spent two years doing that, and then (roughly 11 years ago) left with another guy to start our own apartment development group.

We started with about $50K between the two of us, and a 300 SF office. We kept at it, stayed aggressive (but didn't take foolish risks) and fast forward to now, we've so far done about $500 million (cost basis) of multifamily and mixed-use development in our market(s). We've gotten paid reasonably well along the way (some years better than others), and have managed to build up meaningful net worths.

Corporate Real Estate

Corporate real estate here means the real estate division of any firm or company. The path to corporate real estate manager is hazy. A corporate real estate manager can have a broad range of responsibility, This may include planning, acquisitions, design, and construction. The real estate manager approaches these responsibilities as the owner, occupant, or purchaser. Here are some examples from the real estate community

from certified user @coolhandlucas

This is some quoted text.Never worked in corp RE but I worked with several large corp RE teams while I was a tenant rep broker.

Corp RE works with the exec team to develop a growth/consolidation strategy (i.e. where what type of buildings, budget, lease vs own, etc.) Various jobs depending on if the firm leases or owns space: project managers, property managers, facilities, financial analysts, accountants, assistants. Overall, much fewer sales and people-oriented than most other areas of real estate. Generally a pretty stable/average desk job, and there is absolutely nothing wrong with that.

A couple of examples:
-If an organization has many leases across the country for a certain division and wants to consolidate, the corp RE team would identify a brokerage team to help them align lease ends and search for new space
-If a company needs to expand, they can choose to find a new lease, develop/construct new and own or leaseback, etc.
-lease administration: if there are certain options/rights/terms of existing leases the corp RE team manages these

Comp is on par with pretty much any other corporate position. F500 real estate execs make excellent money. I know for certain the former RE exec for target was making $millions, granted that was in the heyday of bricks and mortar retail.

Base pay is probably in the neighborhood of the following:
Entry: ~$50K
VP: ~$125-175k
SVP: $175-225K

Institutional Real Estate Investment

Institutional real estate investment refers to real est investment at a large scale by an institution. The institution is usually a real estate investment trust (REIT), insurance company, or pension fund. The transactions are usually valued above 10 million dollars. Institutional investors employ their own brokers and analysts among many other roles. An analyst can be responsible for monitoring markets, tax law, regional market changes, geographical economic trends, local and global market trends, as well as micro trends. Institutions invest in real estate in a variety of ways. In public markets, an investor may allocate resources to a REIT or commercial mortgage-backed security (CMBS). Common investment vehicles may include pooled funds, joint ventures, and separate accounts. Basic direct investments include investments in offices, retail, industrial, and multifamily space.
from certified user @monkeywrench

REITs/core funds basically buy and hold something forever as long as it's spitting out relatively good annual yields relative to bond rates whereas the structure of value-add/opportunistic funds generally have a lifespan of 5-10 years. So, of course, depending on the vintage of those funds they could have vastly superior/inferior returns to REITs which are in a more steady state..

A basic explanation of the function of institutional investors.
from user @c00guy

Low risk
High liquidity - publicly traded just like stocks / mutual funds
Tax exemptions
Most profit is distributed to investors
May or may not directly invest in real estate assets (e.g. mortgage REITs)
Investors include both retail and institutional.

Recommended Reading

Comments (55)

Jun 23, 2010

thats a pretty broad question. there alots of things you can do in commerical real estate. you could finance real estate projects either trhough equity or debt, you could do asset management, property mamangement, new development, redevelopment, brokerage services, bank lending, mortgage brokerage etc etc. asking about the career paths in cre is like asking about the career paths in finance. your going to be more specicfic or have a specific career path in mind within the industry.

hold on a sec, i will post a link that will help a n00b like you.

man made the money, money never made the man

Jun 23, 2010

man made the money, money never made the man

Jun 23, 2010

As previously mentioned, this is an extremely difficult question to answer without first providing more extensive details on your background and career/personal goals. CRE can be an incredibly profitable field, but like anything else, maximum income and an ideal home life tend to be mutually exclusive. I'm currently working as a financial analyst on the acquisitions team of one of the world's largest real estate private equity firms. Compensation (at the pre-mba level) is comparable to any BB investment bank in NY, and grows exponentially with every year you log with the firm. Hours vary but usually my day starts at 8 am and ends around 7 pm, though it's not rare to be in till 9 or later. As I am single, this schedule allows for ample after-work socializing and considering that analysts are the last people to go home, it strikes a decent work/life balance.

Unlike other fields, real estate tends to be a really inclusive environment, comprised mainly of people who've spent their entire lives in real estate. I come from a pure CRE background as my internships included real estate investment banking, asset management and CRE development. Most of the analysts I work with have similar backgrounds.

Commercial brokerage is a double edged sword, when the market is roaring you can make a killing, but when it swings in the opposite direction, it can be a bitch. Brokerage is also a numbers game, it's about putting yourself out there and making as many contacts as possible. I know a handful of brokers that make well over 7 figures a year, but for each of those rainmakers, there's 100 guys struggling to make $30K a year. With the exception of large scale private equity and development firms, CRE is a local game. I suggest you contact local brokers and developers and set-up information sessions if you want to learn more about what they do. It'll be a great jumping-off point and might lead you in the right direction come recruiting season. Hope this helps!

Sep 23, 2010

Why not try to get in PE now. I would actually look up some companies you would like to work for, see if anyone went through the NYU program (Linkedin profiles.) Call/email them. You can also see their work experience and see where they started, and that will also introduce you to some smaller companies in the area.

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Sep 23, 2010

Thank you Dick, from what ive been hearing/told its going to be difficult to go right to PE because I don't have any deals / real case modeling under my belt. I plan on reaching out to some PE shops and seeing what happens but I also want to look at other routes on how to get there.

Sep 23, 2010

If I was you I would target smaller REPE firms and try and reach out or look to get into investment sales at a CBRE/Eastdill/JLL.

Don't take this the wrong way but the certificate is meaningless.

Sep 23, 2010

Also in my opinion a good debt shop can be a good place to go however I would avoid consulting.

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Sep 23, 2010

So you would avoid applying to analyst positions at places like, Altus Group or Townhouse Partners? why would you avoid consulting/advisory analyst positions (if I were to get good deal flow and modeling/analyst experience and it was for only a year or so)?

Sep 23, 2010

Contrary to some other opinions I think starting out at very small PE funds that are < 1 billion AUM but have dry powder and have to deploy capital, similar to the fund I work at are great places to start out.

Certainly the pay is not as high as the more established funds, but there is no part of the transaction/fund raising process that I am not exposed to.

Working for a small fund and helping it grow will hopefully pay dividends in moving up the chain later on down the road and faster than your fellow colleagues at the the mega funds.

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Sep 23, 2010
REPE8:

Contrary to some other opinions I think starting out at very small PE funds that are < 1 billion AUM but have dry powder and have to deploy capital, similar to the fund I work at are great places to start out.

Certainly the pay is not as high as the more established funds, but there is no part of the transaction/fund raising process that I am not exposed to.

Working for a small fund and helping it grow will hopefully pay dividends in moving up the chain later on down the road and faster than your fellow colleagues at the the mega funds.

I would agree with the earlier poster. Nothing wrong with trying and failing, but I wouldn't get someone's hopes up as far as going from CoStar straight to private equity.

Sep 23, 2010

Interested to hear more about this. Would you consider opportunities with smaller funds u/w multiple asset classes superior to working for a larger well-known fund focused on u/w a specific asset class?

Sep 23, 2010

what do you guys think about getting into a cmbs side of CRE...analyst or underwriter position?

Sep 23, 2010

you mean originations or underwriting?

Sep 23, 2010

I tell people all the time to look at their career as a long term project. Couple years underwriting in a high deal flow shop with geographic and product type diversity is great, even if it's on the debt side. There are way more people interested on the buyside then there are positions.

The RE certificate tells me you're more committed than the next guy. Keep it up.

Sep 23, 2010

How well do you know Argus? From the perspective of a 2nd year PE Analyst in the Acq Group, its a program you need to be very comfortable in. The time i spent on the brokerage side building those models from scratch was the reason i was hired on the REPE side. Not a bad route to go if you want deal experience, and you'll meet a ton of Acq guys since they're your buyers.

Sep 23, 2010

I haven't used Argus but I plan on getting certified/taking a class on it soon. I would definitely want to get in as an analyst on an investment sales team or a Capital Markets Group at a brokerage here in nyc... im not seeing to many openings available now though.

Sep 23, 2010

Is Integra (valuation) in a larger market such as NYC/LA a good place to start and break into a small REPE in the future?

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Sep 23, 2010

Your path is similar to mine. Directly out of college I was a sales broker for about 6 months, but didnt like a lot about the sales brokerage side but was intrigued by the finance side. It seemed like the finance guys were smarter and could take me anywhere in real estate, unlike brokerage where you are mainly stuck. I am currently an underwriter for a commercial bank for a high volume deal team.

I'm curious as to why you left your bank? In my opinion, in most real estate sectors you are either a deal maker, or you are an underwriter. Where you not in a position to eventually bring in your own deals? Or did you just not like the finance side.

Sep 23, 2010
PaulFranklin:

Your path is similar to mine. Directly out of college I was a sales broker for about 6 months, but didnt like a lot about the sales brokerage side but was intrigued by the finance side. It seemed like the finance guys were smarter and could take me anywhere in real estate, unlike brokerage where you are mainly stuck. I am currently an underwriter for a commercial bank for a high volume deal team.

I'm curious as to why you left your bank? In my opinion, in most real estate sectors you are either a deal maker, or you are an underwriter. Where you not in a position to eventually bring in your own deals? Or did you just not like the finance side.

Sep 23, 2010

I wouldn't panic. But there's nothing wrong with trying the brokerage path like you mentioned, if you can afford to go without an income (which is a big "IF"). If that's possible, because you've already underwritten loans, I would totally go work for a brokerage doing debt placement.

I distinctly remembering talking to the guy that runs the office in my city for a respected national commercial real estate banking group. He said he sometimes talks to guys who are years into their careers who want to be producers, but have spent quite some time doing analyst work. His question for them is, "Well, if you've been wanting to be a producer, why haven't you done it yet?"

Again, I mention this because you've underwritten loans before, but it applies to a lot of the more exciting jobs that you are describing. It was a little harsh, admittedly. But still, the concept of "if you wanna be a dealmaker, then at some point you have to somehow just make the leap" resonated with me.

Sep 23, 2010
PaulFranklin:

Your path is similar to mine. Directly out of college I was a sales broker for about 6 months, but didnt like a lot about the sales brokerage side but was intrigued by the finance side. It seemed like the finance guys were smarter and could take me anywhere in real estate, unlike brokerage where you are mainly stuck. I am currently an underwriter for a commercial bank for a high volume deal team.

I'm curious as to why you left your bank? In my opinion, in most real estate sectors you are either a deal maker, or you are an underwriter. Where you not in a position to eventually bring in your own deals? Or did you just not like the finance side.

Hey, thanks for the response. I was in a position to bring my own deals in, but I would have been more in commercial banking bringing in mostly commercial loans. This was not something I had a desire to do. Getting involved in real estate is really all I was interested in. Thus, jumping ship.

Sep 23, 2010
prospie:

I wouldn't panic. But there's nothing wrong with trying the brokerage path like you mentioned, if you can afford to go without an income (which is a big "IF"). If that's possible, because you've already underwritten loans, I would totally go work for a brokerage doing debt placement.

I distinctly remembering talking to the guy that runs the office in my city for a respected national commercial real estate banking group. He said he sometimes talks to guys who are years into their careers who want to be producers, but have spent quite some time doing analyst work. His question for them is, "Well, if you've been wanting to be a producer, why haven't you done it yet?"

Again, I mention this because you've underwritten loans before, but it applies to a lot of the more exciting jobs that you are describing. It was a little harsh, admittedly. But still, the concept of "if you wanna be a dealmaker, then at some point you have to somehow just make the leap" resonated with me.

Yes, I agree about the wanting to be a producer thing. I tried the brokerage path, but failed to sell one of my buildings before I ran out of money. I should have waited another year or two before jumping in.

When it comes to getting involved in the development and acquisitions part of real estate, where and when would you start looking? What position would be the easiest to transfer to with my work experience (brokerage, underwriting, and property management)?

Apr 19, 2017

Looking for some insight on my career outlook:

  1. Undergrad accounting degree, finishing up MBA at solid public school.
  2. 4 yrs of commercial real estate lending experience underwriting all types of loans including a&d, construction, homebuilding, multi-family, office, retail, industrial, mobile home park, mini-storage and land.
  3. Recently took an acquisitions analyst role for a residential developer/builder thinking this combination would set me up well in the market place having financing and acquisitions experience.
  4. Knowing my background what types of firms would I be eligible for and how would real estate professionals perceive me? Would love to be a senior acquisitions guy, do my own deals, or work at an repe shop. Thoughts?
Sep 12, 2017

I'm curious on your situation. I currently have 4 years under my belt as a commercial lender focused on real estate in Boston and have met or exceeded production goals each year. Prior to that was a credit analyst for 3 years. I'm well versed in asset based lending, construction / development for retail, apartment, single fams, mixed use etc.

I'm at a regional bank making 110 base + ~20% bonus and have the itch to join PERE. Going to talk with a recruiter soon that placed a friend.

Thoughts on target position within PERE? Salary? Background being compatible? Should I consider a REIT?

Also... Is it a bad time to get into PERE (maybe late in the cycle??)

Apr 19, 2017

.

Sep 23, 2010

... what?

Oct 10, 2017

Have you considered a move to the real estate valuation/advisory wing of the shop you're currently at and/or one of the other big four?

The big four, notably EY and Deloitte I believe, also have their structured finance groups that perform due diligence/consulting for cmbs securitizations. Seems as though many from these teams wind up exiting into a cmbs shop. You may know this, yet just throwing out my initial thoughts.

Oct 10, 2017

I recently moved from Big 4 audit to CRE. I currently work as an acquisitions analyst for a REIT. When I was looking at firms, my two biggest criteria was that the company was growing somewhat fast and they had a strong history of promoting from within. I found the perfect REIT that had both of those attributes. As a result, I was very quickly able to move around in the company to my current position (within 4 months of starting).

I found my position through a recruiter that had strong ties to the real estate industry. At my firm at least, they really value people with Big 4 experience, regardless of your role (i.e. audit, tax, advisory).

Anyway, good luck! I would personally recommend an acquisitions role. Great way to see the entire real estate industry (valuation, modeling, legal side, brokerage side, asset management, due diligence, dispositions). But of course I am biased.

Oct 10, 2017

Two things:

1. I know that feel bro
2. If you know some people in the industry, you need to focus on getting someone to create a role for you, instead of applying for specific job listings. The overwhelming amount of jobs posted are for pretty junior people.

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Oct 10, 2017

Grow your network in the industry. You need someone higher up to recommend you.

Oct 10, 2017

What type of company are you looking to work for and in what role?

Oct 10, 2017

Ideally a multifamily shop. The big names like Fannie Mae, Freddie Mac, Centerline, Berkeley Point, Wells Fargo, Berkadia, Prudential, Grandbridge, Northmarq, Beech Street, Greystar, etc. I haven't started to work my contacts yet since it seems pretty mercenary (ya know, to talk to someone once every 18 months for help with a job, lol. Hate doing that to people because I know I wouldn't like it to happen to me...). Production or underwriting--I've really enjoyed both (in the past).

But I'm also pretty passionate about home building (built 5 houses for profit) and would be open to office or retail.

Love real estate in general. If you've ever built a house or worked on a project--my God. There's something so satisfying about building a quality product and bringing it to market and providing someone with a roof over their head.

EDIT: looks like my dirty laundry is getting aired on the front page...

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Oct 10, 2017

Dunno if you've already done this but if it were me I'd consider outright saying "I'd be happy to take an analyst position in CRE despite blah blah blah" but phrase it so it doesn't come off as arrogant. Perhaps people just think you're blasting messages/resume and haven't given much thought to what you're applying to.

The other thing you could do if you have no other options is reword your resume so it sounds a little worse, ie less experienced/knowledgeable. Can't hide your age though.

PS, what do you mean you ran a branch of a bank and worked 100 hour weeks? I thought local bank branches are open like 10 hours a day. I have to be missing something here.

Oct 10, 2017
Going Concern:

Dunno if you've already done this but if it were me I'd consider outright saying "I'd be happy to take an analyst position in CRE despite blah blah blah" but phrase it so it doesn't come off as arrogant. Perhaps people just think you're blasting messages/resume and haven't given much thought to what you're applying to.

The other thing you could do if you have no other options is reword your resume so it sounds a little worse, ie less experienced/knowledgeable. Can't hide your age though.

PS, what do you mean you ran a branch of a bank and worked 100 hour weeks? I thought local bank branches are open like 10 hours a day. I have to be missing something here.

Personal production, hiring personnel, training employees, managing finances and leases, establishing procedures, managing compliance (nightmarish--thanks, Dodd-Frank), etc. on a shoestring budget that only goes up with production, commissioning websites, maintaining site content, and overseeing marketing and many other things is time consuming. Work normal hours of 8 am to 6 pm 6 days a week and then I do most of my personal production in the evenings, which is basically a 40-hour a week job in itself. 100 hours easily. Haven't taken a vacation DAY in 2 years--I even worked a half day in the afternoon after having morning knee surgery in February.

This is an impossible pace that I can't continue as there is no realistic end in sight in the next 24 months. At 3 am on Friday night it really hit home as I keeled over in pain--emotional and physical pain (like, gas from stress or something).

Oct 10, 2017

You said you want to work for a "multifamily shop" but the examples you gave are mostly lenders. Then you go on to say you want to develop which none of those companies do.

You need to focus and narrow in on something. It sounds like you are too old to be a generalist so focus on a specialty.

If you are managing a bank branch (I've never heard anyone work 100 hour work weeks running a "branch") it seems like the most obvious move would be RE loan originations. You can choose your work/life mix by the size of the lender you work for. Something like Pru, NY Life, Metlife, (any large life) or a BB bank and you will be making good money but still work relatively long hours (but not 100 hour weeks), if you go to a local or regional bank you will be giving up income but the hours are very 9-5.

Something sounds off here though, there's more to this story.

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Oct 10, 2017

So you like residential, office and multifamily and enjoy the development side and the underwritting side but you named debt shops and come from a regional bank working over 100hr weeks (twice the norm for a regional bank manager)... very confused

Oct 10, 2017

Hey I work at one of the companies you listed and I sent you a PM. I don't have any pull but I'll do what I can.

If you can't kill them with kindness, just kill them.

Oct 10, 2017

Thanks for all the responses. To clarify, debt shops work on new construction projects pretty regularly. I've worked on a dozen or so multifamily builds, so it's not completely out of the ordinary to work on those files. The lenders that I listed are all multifamily lenders. Only a handful of those organizations do considerable non-multifamily transactions.

I'm not a branch manager for Bank of America. I manage a 21-year-old regional bank's brand new branch (well, brand new when I started). It's more or less an entrepreneurial role, not an administrative role. My pay is 100% based on the branch's profit. In addition to working normal 8-6 I work basically 7-1 or 2 am most days of the week on my own origination. Maybe it's 90 hours some weeks, 105 other weeks. Not sure why it's relevant--I'm quitting because of the hours and the strain on my health. Whether it's 90 hours a week or 105 just isn't relevant.

Oct 10, 2017
DCDepository:

Spent my first 4 years out of college in multifamily real estate. Spent the last 2 years running a branch of a bank. Actually, we've done pretty well, but my business partner and I can't get along anymore and the 100 hour weeks and the intense stress have pushed me to the brink. I'm ready to walk away and get back into commercial real estate/multifamily real estate. The money--and the money has been phenomenal--is not worth it anymore. I've gained 50 lbs in 2 years and face intense social isolation because of the long and unscheduled hours.

Since starting my job search, I've found out that I'm overqualified and under qualified for most jobs (under qualified only in the sense that my specific qualifications don't necessarily match the hiring criteria 100% even though there's nothing in CRE that I can't pick up in 4 weeks...real estate is absurdly easy).

The biggest issue I'm facing is that I seem to be overqualified for most jobs and am having trouble getting responses as a result. I'm actually happy to take an analyst level job in CRE at this point. Are there any suggestions for how to deal with being considered overqualified?

From what I can think of, going to be a real estate broker might be the easiest thing for you now. But it's not a salary job, but you entrepreneurship of business will make you survive very soon.

Oct 10, 2017
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Sep 23, 2010
Oct 10, 2017