CMBS Origination Exit Ops

I've been exploring the WSO CRE forum for the past few weeks and wanted to ask a question with my first post about potential exit ops for the job I have lined up.

Currently in my final year at a non-target state school on the West Coast. Interned for a top national CRE broker after my sophomore year and interned on the origination side of a bulge bracket CMBS lender after my junior year. I've accepted an offer to return to the CMBS origination group after graduation. I'm planning on staying there for at least 2-3 years depending on what opportunities present themselves. My ideal end game is to work my way into CRE development or REPE ideally before the age of 30.

My question for all you monkeys with industry experience: are there any roles necessary to bridge the gap form where I'm at to where I want to be? What sort of experience would a REPE shop be looking for? Anything outside of what I'm already doing? Outside of networking, what steps should I be taking to make this happen?

Also, after having the CRE brokerage/capital markets experience I wouldn't mind working my way back to that side. Would it be out of the ordinary for someone with my prior experience and 2-3 years at a CMBS originator to immediately fill a production gig at a capital markets shop upon transferring over?

I appreciate any insight nayone can provide.

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Comments (20)

Nov 24, 2015 - 9:17pm

You're an originator on the debt side of this business...hopping to the equity side (although Capital Markets is "sell side") would be an odd maneuver IMO. I don't see very much movement from CMBS to Capital Markets or vice versa. Would love to hear about past examples or success stories. CMBS originations/sales really intrigues me but I can't see myself getting the opportunity to enter that side of the industry without losing years on my personal career.

Nov 25, 2015 - 3:40pm

Thanks for the reply. Let's assume that sort of maneuver (CMBS to REPE or capital markets) is unreasonable or unlikely. What are some opportunities in your mind outside of CMBS origination that someone with CMBS origination experience could pursue to keep their career path on an upward trajectory. Essentially, outside of advancing internally, what do you think are some next steps?

Interestingly, it was my capital markets experience that sort of got me the current gig. Knew enough about the industry to speak knowledgeably to the function of the CMBS role. That being said, I think your point is definitely valid. Might be pigeonholing myself into something very (too) specific to be easily making the kind of moves I have in mind.

Nov 25, 2015 - 3:29pm

I saw this once with one of the NYC analysts in my group. He was a real gunner and extremely hardworking. He was always running the IRR of deals and looking at the deals that came in from the lenses of an equity guy after hours. So you would really have to be willing to spend a lot of your time doing your job and then learning the equity side. He was also one of the hardest working analysts in our team.

I left a small hospitality acquisition firm to join my group, but I really like the debt side. To be honest with you, the work is drastically different. As a lender, your job is to always look for the downside scenario, but as a developer/borrower, you're really looking to find any upside. In addition to that, you're always looking for new ways to find capital or structure the capital raised to be most profitable.

The other guys who made the move followed the former head of the group, and they were all over 30.

Since you are at a BB CMBS shop, I am very confident you could leverage that name into a job at a smaller (ie not Blackstone or Douglas Emmett) shop [I might even say easily].

Nevertheless, I completely think this is doable if you want to get into your top tier shop. I would recommend the following:

When you are at your CMBS shop, take advantage of all the resources they have. Look at all the debt deals they see. I am assuming you're going to be an underwriter, so take advantage of all the deals that your entire group sees. Look at, read, and study ALL the OM's (especially Eastdil), ARGUS run, term sheets, securitization term sheets, rating agency presales, and credit committee books that you can get your hands on.

Try to get to know all the analysts at the Brokerages. Get to know the analysts at your competitors, and not just in the CMBS world, but in the portfolio lenders (life insurance companies, debt funds, commercial banks), bridge lenders, and mezz lenders.

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Nov 28, 2015 - 2:19pm

CMBS originations exit ops (Originally Posted: 04/29/2014)

I am currently an analyst at a large balance sheet lender located in NYC. My current team covers all the top institutional real estate names and have gotten some good deal exposure in my 2-year tenure. I have an opportunity to move out of the balance sheet world to a large loans origination group at one of the top BB banks at the associate level. My mid-term goals (within the next 2-3 years) are to move to a HF that invests in real estate (either debt, equity or something in between) or move to the capital partner side of REPE (have not yet decided but I'm pretty sure I don't want to go to the operator side) and want to keep my options as open as possible.

To the guys currently on the buy-side at a HF or in REPE: How is BB CMBS experience seen by current buy-side investors? How easy is it to take the capital markets/CMBS experience and move to a HF that invests in real estate debt? What about REPE?

Given my goals would I be better served trying to move to one of the aforementioned industries now? Other thoughts? Really torn on this decision and could really use some input. Thanks

Nov 28, 2015 - 2:21pm

Bump. Could be a difficult question to answer though as we are only a few years into CMBS 2.0 and there may not be as many analysts/associates out there who have made the jump.

I moved from a balance sheet originations role at a bank to a repe debt fund. People like us are in a good spot because with all the upcoming maturities over the next 3 yrs or so (~$350 bn per yr), everyone and their mom is raising a re debt fund and there's huge demand for junior support.

Nov 28, 2015 - 2:22pm

I've tried PM'ing Dr. Barnaby but haven't seen a response so I will ask the monkeys. What is the best way to go about finding and joining these debt funds? Recruiters? Linkedin stalking followed up with networking? I'm in the same role (balance sheet originations) and looking at possible opportunities with debt funds. Thanks for the help!

Nov 28, 2015 - 2:23pm

Hit up all the major recruiters and apply on linkedin. I made a similar jump from balance sheet originations to the buy-side and got lots of traction coming from a lending background. As long as you have experience underwriting with all the major product types and have worked on some large (see $100m+) deals you should be good. Also, I found it was important to be able to get out of the 'lending' mindset in interviews. Talk like an equity guy and understand the cap stack beyond senior debt and you will be in decent shape.

Nov 28, 2015 - 2:28pm

like to refresh this thread to see if CMBS originators exit opps are still as it was in 2014? or has the resurgence of CMBS 2.0 shifted the landscape. thanks.

i'm not smart enough to do everything, but dumb enough to try anything
Nov 28, 2015 - 2:29pm

CMBS Exit Opportunities (Originally Posted: 07/23/2015)

WSO has an influx on topics regarding RE, so I was hoping that the forums can help out with my question about transitions.

Currently working at a large CMBS shop as a 2nd year analyst on the west coast. Looking for precedence and advice on making the transition to buyside post CMBS stint (debt HF, REPE etc) I have an interest in moving to Asia (born and raised there) Thank you everyone!

i'm not smart enough to do everything, but dumb enough to try anything
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Nov 28, 2015 - 2:33pm
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