Real estate, like many industries, is changing at a fast pace because of new technology. Startups are the drivers of new technology usage and recently I feel like I have stumbled upon innovative RE startups more and more. Some names I have run across include the obvious (WeWork, Zillow, Airbnb) and some notable up and comers (Opendoor, Common, Reonomy, etc).
Curious to hear your thoughts on how you see technology changing the way that business is conducted in the real estate world - whether that includes automation, crowdfunded investments, easier access to data, blockchain, etc. Also feel free to mention any interesting RE startups that you have run across.
Fifth Wall is the single most prominent Real Estate VC Fund. Follow them closely and you'll answer a lot of your questions.
Wow, just looked them up - really impressive stuff. Their team is on another level, also podcasts seem quite insightful.
That Fifth Wall team reminds me of GSW's roster.... Absolutely ridiculous lineup.
They seem impressive and would love to work for them. But, on the other hand, they seem very elitist. A job opening for a senior position (or something where you'd mentor more junior employees) mentioned a requirement of "Top-tier school (any major)". So it doesn't matter if I majored in basket weaving so long as I went to Harvard?
I always thought that what really mattered were experience and accomplishments, not the ranking of the school you went to 10 yrs ago.
Looks like a J. Crew catalog
peep metaprop
VP at my office recently left to work at a RE startup called Peer Street... haven't looked into what they do, but this guy is very accomplished so I would think they're a solid startup (or he wouldn't of left)
Is this it? Looks interesting. https://www.peerstreet.com/howitworks?ps_src=header
It's just hard money lending and they take a management fee (usually like 10% of interest rate). They don't originate anything either.
Never heard of Fifth Wall. Just went on their site.
Talk about an impressive team background..damn
I do think there is lots of catching up to do for the real estate industry compared to how tech has changed other fields. For instance, on the construction side, we still build with the same process as we did since WWII. So I find prefab startups fascinating, in trying to reduce cost etc.
Some interesting startups I have run across:
https://fundrise.com/
Crowdsourcing for RE investment. Interesting concept but here is an article with some setbacks: https://www.fool.com/investing/2016/06/23/is-fundrise-as-good-as-it-see…
https://www.gridics.com/
Super interesting startup founded by University of Miami alumns that helps with zoning analysis and decisions. A bit pricey for a small firm to use but I'd love to get my hands on this.
KATERRA
Lmao this is pretty savage. KKR + Silverlake is a solid combo - also its pretty funny that the CEO of Foxconn (manufacturer of iPhones in China that has a crazy amounts of factory worker suicides) is on their Board.
Check out Homezada..........personal software to manage house finances and maintenance schedule....
Buildium. Pretty cool software used for property managers. I wanted to hop onto their sales team but they pay a little too low for me to make the move. If anyones interested in their product I can connect you with a friend of mine who works there.
Compass
I find Proptech as a really exciting place just because the industry isn't purely transparent and even if all the data's are made available to the public, analyzing those data's and making it worthwhile still needs a hand of an expert and hence there is always a room for optimization and development. I will be doing an internship at an emerging Proptech startup this summer in growth strategy and product management (its a small startup and they just finished their seed funding and got through a prominent Proptech focused accelerator program) and the way they integrated AI and ML to their product just sold me right there. I met a lot of people with promising ideas starting up in this space with some impressive academics and top tier work experience. The fundraising part is also getting quite well as a lot of VCs are investing in this space these days. Maybe I am super optimistic but I think it is gonna be the next hype just like FinTech these days.
Revolution Precrafted looks pretty neat, though all the global multi billion deals they are doing (e.g. World Islands Dubai, which will never materialize) make it seem a bit more hype than substance
rentlytics seems to be doing some cool stuff on the MF asset management side. backed by some interesting VC firms and walker & dunlop. greystar is potentially their largest account and they seem to be penetrating MF asset management in a very unique way. the guy who runs the shop is a smart dude I respect.
Real Estate Startup Fund (Originally Posted: 01/09/2013)
What would be the fair compensation for an associate with a solid transaction background acquired in a boutique strategy consulting firm (5years) at a startup real estate fund in a top 5 US city. Fund size ~ $150-$200m not all funded. Staff includes 1 other associate, 3 MDs/partners. Fee structure: 1.5%, 20% over 9% hurdle.
Hope to get some replies for people who have worked in small funds and/or startup funds.
Contingent upon a variety of other factors but I think fair assumptions would be as follows:
Base: $80-$100k Bonus: $50-$80k based on performance
I have always been a proponent of taking less cash comp and asking for participation in the carry or some co-invest opportunities especially in this type of start-up. It will take a number of years to monetize most of your investments so your initial comp may be lower. Shoot me a PM (if you want) once you get the comp proposal.
Based on the fee structure, I imagine the company gets somewhere around $5-$7 million a year in fees assuming they hit the hurdle. This is also pre-tax by the way. Then keep in mind there are 3 partners and they are going to collect a huge chunk of whatever there is. I'd say as an associate you would probably get around $50-$60k and I have no idea what there bonus pool is like, so can't really say much on that, but I expect total comp could be between $80k-$100k. I think junkbond's estimates maybe very optimistic. I know Carlyle's RE group doesn't even pay that well for associates so I doubt a startup fund would have such strong compensations plans.
Agreed, a fund that small will pay you peanuts Teddy, what is the range for Carlyle?
I believe its somewhere around 100k - 130k all in.
Teddy, what is your source for that? That sounds light as fck for an associate at a place like Carlyle.
forgot to mention that this is the fund's first year and that it's looking more like 2 million in fees. The fund is in PE format where the 20% is taken at year 5. Partners are delaying their pay for a year or so.
My target comp is 130K all in, but not sure if it's realistic.
junkbond,
That is based on Washington D.C. office. I am sure <abbr title="New York City">NYC</abbr> is much more. I think its closer to 130k and that is definitely not that light based on the COL there, you would live a very nice life in D.C. on that. My college roommate's brother worked there. Again this is D.C. comp and that is really good there.maddux,
Based on those fees, I don't think the fund is going to pay even close to that. You might get an option to take an equity stake in the business if the partners allow it. An equity stake by the partners would allow the company preferential tax treatment.What sort of credentials does one need to be an associate at a Carlyle-level shop? Would premier brokerage (top market, top shop, top team) --> columbia MSRED --> Carlyle Associate be a plausible progression?
I've interviewed with Carlyle, but for asset management in DC. There is a clear distinction in recruiting between their asset management team and their deal team. I would not be surprised if pay were totally different as well as the calibre of people.
$130k all in at Carlyle seems pretty light for NYC. REITs are paying 100-130k all in. I always thought the big PE guys would be paying much more.
depends what team you're on
I'd be shocked if an associate at Carlyle made that little. I work at a comparable but arguably weaker firm then Carlyle and make over 250 as associate
I am having a hard time getting similar numbers in my models teddy. Can you elaborate how you got those fee projections?
I guess it depends on the fund and what kind of financing rates it can accomplish.
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