Commercial Lending to REPE? Advice Needed

I graduated 3 years ago with a BS degree in Finance, good GPA at a pretty good school and started working in a Commercial Banking Leadership Program. I then worked as a commercial credit Analyst for about 18 months before getting promoted to a portfolio manager working directly under a CRE lender.  

 

The thing is, I am extremely bored. I like Commercial Real Estate, I love underwriting the deals, but commercial lending is boring and I have ZERO desire to become a CRE lender or any role involving sales/production. I'm analytical and detail-oriented, more of a "do my own thing" type of person and intrinsically motivated. Very organized and routine oriented. Bit of a health & fitness nut. Think Type A personality but more introverted/inquisitive. 

 

My parents did not finish college and do not have white collar jobs. I'm not from the greatest town so I've never really had anyone help guide me in the right direction in regards to career choices. I thought majoring in Finance was a good idea but I was never educated enough to learn about the various career paths after school. All I knew is that I did not want to work 80+ hours in Investment Banking. 

 

What kind of career in CRE would I be best suited for? Asset Management? Development? Acquisitions?

 

Looking forward to hearing different opinions. Feel free to ask any questions. 

 

Thanks!

Comments (33)

 
Oct 21, 2020 - 10:31pm

False. If you were a credit analyst at a recognizable shop where you learned underwriting and saw lots of deals then you could end up a good REPE shop. Blackstone, Carlyle, and Starwood are pretty tough. Not to say you can't make it, but something like BlackRock, Morgan Stanley, JPMorgan, Rialto Capital, or TPG could definitely be possible for you. I would say Asset Management is your best bet because you are doing portfolio management right now and AM is a core part of everyone's business. Acquisitions could slow down or be inconsistent for a little while at some shops because of COVID. Development is pretty tough and I wouldn't recommend it right now because many development shops are struggling right now and NYC especially is overbuilt. Office and retail development are not smart ideas. Multifamily development could always work. Industrial development is booming. But in all, I'd tell you to aim for an AM role at a REPE shop but if you happen to come across an acquisitons role them go for it. Hope this helps. 

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Oct 22, 2020 - 9:16am

I'm a student, but I've seen a ton of Wells Fargo FAP or whatever it's called to Carlyle and Starwood from my school. I've also seen Goldman's RE financing team to top REPE shops (the group is under IB, but it's essentially CMBS lending). I genuinely don't think you need the asterisks for Blackstone, Carlyle, and Starwood, from what I've seen at least.

 
  • Analyst 1 in RE - Comm
Oct 22, 2020 - 9:46am

All i'm saying is he would be at a disadvantage coming from just balance sheet lending compared to people with REPE experience or I-Banking

 
Oct 22, 2020 - 11:18am

If you're in REIB, transitioning to REPE is a layup. However if you're in lending at a big or well known firm then you can transition into REPE without much difficulty. It's like taking a two point shot instead of a layup, maybe not as easy but certainly not hard. 

Array

 
Oct 22, 2020 - 10:32am

You can easily transition to REPE from Lending, however, it's usually easiest done from a large lender like JP, WF, BofA, etc. I would even say it's one the best starting routes assuming youre at an institutional lender.

Ive never seen someone transition from a regional bank to a fund.

 
Oct 23, 2020 - 3:17pm

def easier from JP, WF, etc. but I've seen guys jump from a PNC or capital one (I guess these are regional?) or even CIT type place... even to bigger names (MSREI, JPMAM, etc). Not sure on networking/connections... just colleagues from undergrad/linkedin updates from ppl I'm not too close with. But it happens. 

 
  • Analyst 1 in RE - Comm
Oct 22, 2020 - 12:00pm

what about repe (debt funds and acquisition shops)? 

Whats the difference between both in terms of skills needed? 

which is easiest getting in from a balance sheet lender at a big firm like (JP, WF, BofA)?

and how long should i stay?

 
Oct 22, 2020 - 12:10pm

Debt side is easier because naturally they see and complete more deals, hence the need for competent talent. Also, debt shops aren't looking to make a killing like equity shops. With debt, your profits are fixed because you make money off of interest and fees. Acquisitons would be on the equity side, which is inherently harder. Good firms are picky about what they choose to bid on and acquire. So they are looking for the sharpest people. Also, they tend to run lean but pay more. A cool medium is if you tried to get into asset/portfolio management on the equity side, do that for 1-2 years then transition into acquisitions. However, I must say, if you decide to go into debt and you stay there for 4-5 years then you'll kind of be pidgeonholed into that role. Best to pivot to equity after getting 2-3 years of debt side experience. 

Array

 
Oct 22, 2020 - 1:15pm

What specifically about lending do you find boring? I could easily point you towards one of those other areas you mention, but you could also end up being bored at any one of those too. I will say though, that different personalities better suit each one of those. My best suggestion is to figure out more specifically what it is you're not liking and then just network with people in those other areas to learn more. It gives you an opportunity to ask why they like it, drawbacks, what a normal day is like, etc. Browse all the AMAs on here, people have been very open about their experience so that can be helpful too. Keep in mind, not every job or role you're interested in will tick all the boxes you're looking for.

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Oct 22, 2020 - 3:59pm

I guess to me, it's boring because it feels like I'd be just watching others around me grow their RE business. I feel like it's very transaction based and not creative.

Whereas on the equity side, I would actually be involved with growing a tangible real estate business and making it more profitable.

I've been trying to figure out why I'm dissatisfied with my current position for a while now. Who knows, maybe I just hate working lol

 
Oct 22, 2020 - 4:53pm

Acquisitions is only transactions-based. No transactions, no profits. Equity guys make more than debt guys. However, you still have to go out there and find deals to lend on. I will say equity is more interesting because every deal is not the same. I know with lending, depending on the specifics of your role, it can be very monotonous. Same structure, format, procedure, etc. 

Array

 
Oct 22, 2020 - 4:55pm

I think your reasoning is fair with it being mostly transaction-based and lacking creativity. It's sell-side though, so it's all about doing deals, keeping that stuff moving in the pipeline. And it definitely sounds like buy-side is better for you, since you want to be closer to the asset and mostly think about its potential.

You really just need to network and talk with more people that work in those three areas. You mention you're not in the "greatest" town, reach out to people in other cities who have jobs that interest you more.

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Oct 22, 2020 - 8:46pm

If you can't find your dream REPE job, you may consider looking for something at a debt fund. I spent almost a decade in life company lending and the big reason I went to a debt fund was because I wanted to work on more interesting/value add/transitional  type of deals. This last year has been extremely interesting/satisfying, when before I was pretty bored.

 

Also, it doesn't hurt that because we are an opportunistic fund, I get paid more or less in line with others in REPE. 

 
Oct 23, 2020 - 12:31pm

I'm in similar boat OP. Currently on commercial RE team at BB bank. I'm looking to move to REPE (ideally acquisitions) and am curious what people's thoughts are on what level of firms to shoot for. Additionally, any advice on how to get there (other than networking and leveraging existing contacts to talk to people at these firms)?

 
  • Analyst 3+ in RE - Comm
Oct 23, 2020 - 1:11pm

For now you're gonna just have to network. I was speaking with a principal-only RE headhunter and said a lot of their clients (Apollo, Starwood, TPG, MM funds) won't be doing any hiring until early to mid 2021 and I think that is realistic. Especially for acquisitions. If you're set on leaving ASAP, your best bet are either debt funds or asset management. The acquisitions roles you may be seeing are being used as resume collectors until they decide to actually start deploying capital.

If you are doing CRE at a BB though like GS/BofA/MS/Citi then you will have an easy time transitioning to REPE. Wait out COVID as long as you can.

 
Oct 23, 2020 - 1:16pm
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