Comparing two types of real estate dealmakers

This thread was inspired by a recent discussion I had with a member on this forum. He works at a life insurance company and buys stabilized office buildings in major metros at 4-caps using 0-40% leverage.

My question is basically this - what do you think is more impressive? Doing what the above guy does? Or working in investment banking and moving onto Starwood and working on the Yotel deal (big corporate deal - google it)? Or doing IB -> Blackstone and working on the Hilton deal, Logicor deal etc

Who do you think gets paid more?

My advice for you young guys in this forum, if you enjoy buying single assets and clipping coupons, investment sales is the way to go. You'll be able to put together an investment committee memo for an asset level deal in a heartbeat after a couple years there.

If you want to work on big corporate deals and make 2-3x your buddy at MetLife real estate, go the IB route

Comments (42)

 
Feb 14, 2019 - 9:18am

Who gives a shit?

Commercial Real Estate Developer

  • 5
 
Feb 14, 2019 - 9:42am

Real Estate Alert about a month ago had the league tables for real estate M&A for 2018. A total of 14 deals spread out among 25 firms actually closed. Over the past 10-years the average number of closed deals is 10.

A lot of people on this site fawn over REIB, but to be honest it is generally a brand-name heavy/experience-lite gig, especially at the junior level. Someone at a lifeco or a small REPE shop actually closing multiple deals a year is getting much better experience and will the better deal maker, the person at REIB will be superior in PowerPoint.

 
Feb 14, 2019 - 10:07am

Closing a loan =\= closing a merger. Obviously a loan underwriter will do more "deals" per year but calling a loan a "deal" and an M&A deal "just another deal" is totally inaccurate.

Let's just say REIB isn't the best experience. It doesn't matter. The topic was about the REPE corporate deals versus 5 cap industrial in Houston. I don't even think Yotel used a broker. But you won't work on the Yotel deal without going thru banking

The junior level is about opening doors and creating opportunities for yourself. Doesn't matter if you get "the best experience" if employers don't want to hire you

Fuckin my way thru nyc one chick at a time
  • 2
 
Feb 18, 2019 - 12:36pm

Closing an asset acquisition is similar to closing on a merger, I'd imagine, and if you're entitling and constructing a new development project that is almost certainly more challenging and involved than REIB. Especially at the junior level, where development folks have real responsibilities and IB folks are just running league tables and putting pitch decks together

 
Feb 24, 2019 - 7:55pm

EliteStudent11:

Let's just say REIB isn't the best experience. It doesn't matter.

Hahahahahaha "Elite Student" works in Real Estate "Investment Banking" and tries to shit on other shitty mortgage brokers to make himself feel better in comparison. Dude, REIB is wack. Raising capital for REITs at some large-cap, primarily consumer bank's IB division isn't the experience that most people have in mind when they talk about the IB cache.

 
Feb 14, 2019 - 9:53am

There are these friends of mine, from school, they studied computer science, now they are making $150K out of school and have normal hours .... I repeat normal hours ....... seems kinda embarrassing for EliteStudent11 to be flexing all the time when we finance people are second, third, or fourth place when it comes to lifestyle/compensation combined.... we are kinda that group who used to be the shit, and now we are not the shit, and some of us do not realize, the ones that are here "for the money" are the most laughable

 
Feb 14, 2019 - 10:27am

But the prestige bro. Chicks immediately flock to any dude who has an EB on his Business Card. Every girl that is a 10 is completely informed about the hierarchy of banking and tracks prestige closely on WSO. Obviously they'll flock to REIB guys... right?

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
  • 4
 
Feb 14, 2019 - 10:26am

I think working 40-50 hours a week on complex developments that will transform neighborhoods is a lot more impressive than jerking off in excel and PP every day while constantly stroking your MDs ego to appease their every whim. It's even more impressive when it comes with a 30x payday and an actual, REAL accomplishment you can walk past knowing others are enjoying and appreciating what you created. Also, Yotel blows.

 
Feb 14, 2019 - 10:34am

Investing in RE companies is not a real accomplishment... thanks for the insight!

Fuckin my way thru nyc one chick at a time
  • 3
 
Most Helpful
Feb 14, 2019 - 11:54am

Hey man - I see your posts from time to time. I understand that you are very interested in pursuing a REIB role focusing on entity-level advisory. I think it could be cool for the right person in the right group or bank. That's a great career choice if you are genuinely interested about the work and want to be doing it for the foreseeable future. The same goes for any line of work really.

Why are you always trying to flex your self-perceived superiority over the rest of the members of this forum? Do YOU even have a REIB job...? I thought I remembered you complaining about your balance sheet lending role or something.

If you want a REIB job then go fucking get one. No one really cares. Not hating on you, just saying you may consider being a little more polite. Especially considering the fact that this is a relationship business.

I had a flair for languages. But I soon discovered that what talks best is dollars, dinars, drachmas, rubles, rupees and pounds fucking sterling.
  • 7
 
Feb 18, 2019 - 7:39pm

What irritates me about the trolls on WSO is that they're spreading misleading/wrong information on a website meant to help people. There are tons of college kids & professionals that actually use this website as a resource, and this jackass is dilluting the quality information for the lulz. In EliteStudent's case, if it were just one or two posts that'd be one thing, but it's almost every fucking thread for this guy.

I've contacted AndyLouis and WallStreetOasis.com twice regarding this, and frankly I'm disappointed that they haven't done something about it.

 
Feb 19, 2019 - 10:46pm

It's funny how I get shit on for saying RE I-banking is the best place to start your career in real estate, but when people say I-sales is the best place to start your career in real estate, no one bats an eye. The truth is I-banking is the best for one particular path (working at a fund that does corporate deals, distressed debt, etc) while I-sales is the best for another particular path (asset level acquisitions fund, although many of these funds also prefer banking analysts).

But most people in the RE forum didn't get into banking and they work in I-sales / lending so telling them that I-sales is the greatest basically panders to them. It's not that it's 100% correct, it's just that it makes everyone happy to hear it.

Obviously my post is phrased in a way to piss people off, but it's ultimately accurate info that just happens to not pander to you.

 
Feb 14, 2019 - 5:13pm

What I thought this tread was going to be about was dealmakers with higher sales vs higher analytical skills. Of course you need some of both.

Also gets back to dealmakers with acquisitions or asset management backgrounds.

And then deal makers for more stabilized, value add, development (land acq) or portfolio deals.

I think back and also in the mirror, and there are different types. There are MDs/partners who are great at building a pipeline. There are MDs who are great leaders and or visionaries. I think it matters in what stage the company is in.

Have compassion as well as ambition and you’ll go far in life
  • 2
 
Feb 21, 2019 - 7:56pm

I thought the same lol. Someone should actually start that thread instead. I'd be interested in hearing the different styles of the rainmakers at everyone's respective firms. My principal, for example, is very low on the analytical spectrum and high on the "nose for a deal" spectrum, and I personally think that goes 10x further.

 
Feb 23, 2019 - 1:04pm

My old MD was very transactional based and sometimes I wished there was more leadership coming from him.

Array
 
Feb 22, 2019 - 11:50pm
“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
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