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| +47 | Leave brokerage to be GP | 12 | 2h | |
| +45 | New Comp Database - Google Form (Now with Data Validation) | 24 | 3s | |
| +24 | Seeking Career Guidance in Real Estate Development Post-Graduation | 3 | 1d | |
| +23 | Going out on your own | 4 | 3h | |
| +22 | REPE/Development GPA | 15 | 2d | |
| +21 | Real Estate = complicated + underpaid | 15 | 2h | |
| +17 | MSRE/MSRED with no RE experience; Naive to think I’ll land a job afterwards? | 4 | 4d | |
| +17 | Fisher Brothers | 6 | 3h | |
| +16 | UC Berkeley MRED vs Columbia MSRED? | 2 | 6d | |
| +15 | Spreads over SOFR/UST | 0 | 2h |
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Wow that’s awesome man, first off congrats! What’s your background?
I agree with your reasoning, even if you’re only at the REPE firm for a short while, it’ll always look great on your resume and help open doors. Given the state of the economy and the opportunity to get a return offer, that sounds like a solid choice.
Also, you’ll have the chance to learn the ins and outs of and become highly skillful in modeling. That will serve you very well over the long term and also give you an advantage over many developers who never really learn how to model and therefore, I think, are unable to understand the deal as well as someone who can model well.
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Who says developers don’t know how to “model”. The development model that includes interest reserves and JV structures that go 3-4 tiers is one of the most technically complicated deal level thing I’ve seen in this industry. By the way, this “model” thing that is somehow revered by all the aspiring college students on WSO is immaterial as you get more experience in the industry. A successful RE person should be able to pick up the technical within their first 1-2 years as an analyst.
As OP said he wanted to do development, I’d take the development gig. Uncertainty is a part of life regardless of whether you’re in a bull or bear market. Take the job you want to do and learn what you think you like, then figure it out later. If it really is one of those big boy development shop, that should help you next year when looking for FT jobs.
congrats OP
The only real concern is how bad is the REPE market. We talking memphis, or mobile, AL?
No offense to anyone from there, just not a NYC type of city.
I think you're right, go with the REPE. I know so many late in life 'developers", You won't be able to reverse break into an OakTree. Honestly the finance portion is so important, and here is the thing I'm sure you could learn more about development being in a top middle market firm, but not the opposite about REPE.
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Yes but you also don't get the skills, experience, and connections to break into development if you start in REPE.
If someone wants to be a developer long term, they should be in development. Depends on how entrepreneurial one is
I'm not so sure you don't. But you get the better framework from which to apply the skills. Starting in finance/REPE you get a snapshot of the whole picture from day 1, now granted it will take you 4-5 years to fill in that box, but from there you can get an MBA and switch to development shops. I knew PM's with 10-years experience who could run a GC/development, but had zero clue what happens outside of their world.
Congrats on CBRE
CBRE global investors Dallas office? Totally comparable to working at Oaktree or Carlyle
CBRE GI might actually be comparable. Look at how much money they raised on PERE50. Just because its not one of the Corp PE shops doesn't mean its not "comparable". There's a reason why all those Corp PE shops are all turning to RE....
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Take the REPE role. I’ve worked in both and REPE offers a much quicker learning curve due to being exposed to so many transactions, particularly if you’re not aligned to any one asset class. This will give you a great grounding in underwriting and understanding what makes a deal work. This skill set is in huge demand from the top development firms where you can easily lateral to after 3-4 years in REPE. At this point you’ll have a few deals under your belt and the learning curve flattens a lot. A move to development at this point will offer a completely new perspective and skill set to pick up.
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I have to disagree on this one. No one in development gives a shit about whether you can model out a deal - that can be taught in 3 months. Having an expertise in some constituent part of the development process? That's a major value add. Being able to say you've done an excel model for 500 deals over the last 3 years is meaningless - it means you've mastered the easiest and least important part of the development project. Someone who tells me they've worked for a contractor for three years as a site super? That's a valuable skill
Out of curiosity what size firm are you relating this to? My experience of the above is based on working at a top developer (Hines, Tishman, Related etc) where an investment skill set was far more valued in a development staff member than a construction skill set, given there was a construction team to support the development team.
As I’ve clarified below, there’s far more to underwriting than just modelling. Underwriting a deal is the full process of building a sound investment case around a set of assumptions which can stand up to detailed interrogation, supported by proper DD.
You’re also attributing no value to another important component of the development process gained from the above, capital raising and investor management. Spending 3-4 years in REPE will teach you what an investor is looking for in a deal, how they underwrite it, and what aspects they really care about in documenting the JV. Your experience of this from development will be more limited.
It’s two different learning curves, and not as simple as just picking up modelling. When I say a great grounding in underwriting, I don’t mean just plugging numbers into excel. The key variable in underwriting I’ve noticed in development vs REPE is the level of justification required for each assumption and how deeply the numbers are interrogated at investment committees. As an example using multifamily, from what I saw in In development it was often as simple as “these 5 rental comps show it’s achievable in the current market, so it’s supported” whereas for REPE it’ll be current comps and then analysis to justify whether they will hold up based on economic backdrop, supply / demand, and where the market is moving in terms of rental terms and product offering.
In your first 3-4 years in REPE, you’ll work across significantly more transactions than you would in development and the DD required as part of each transaction is where you’ll learn. I.e. if you’re investing in development deals, you’ll need to DD all of the points you mentioned above, I.e. is the developer’s entitlement assumption achievable in terms of timeline and massing, is the developer’s construction cost achievable and does it reflect the spec they’re saying they’ll build to, is the construction programme achievable, is financing available at the terms they’re suggesting etc.
In development on the other hand, you’ll likely work across no more than 3-4 projects for your first 3-4 years where you’ll have learnt a lot more about design, entitlement and construction during this, but this will be driven by the handful of projects you’ve worked on. You’ll have a more detailed knowledge but across a more limited scope of products.
In terms of learning curve, I’ve learnt an awful lot more in my 2 years in REPE than I did in development as I’ve been exposed to far more transactions across multiple asset classes, but this will flatten quickly in 1-2 years. At this point, if I go back to development (which I would definitely consider), I’ll take my knowledge to a much deeper understanding of these particular points. Early in your career though, I think a wide but shallow understanding of multiple asset classes, how to underwrite them, and the key elements of the investment lifecycle, is more helpful than a narrow but deep understanding of certain components of the investment lifecycle.
Edit: do you have a good feeling for what the REPE group you’ll be joining will invest in? If you’re joining a group focused on core stabilised product a lot of the above isn’t a fair reflection given you’ll be focused on vanilla stabilised assets. If you’re focusing on value-add / opportunistic take REPE, if it’s stabilised core deals I’d take the development as I find core very bland.
I agree with this
You think a year of repe before moving to development allows you to bring a solid level of knowledge to the table ? Thinking of making a move such as this
I’d give it 2 years for a few reasons.
I wouldn’t necessarily call it a “solid level of knowledge” in that you’ll have a pretty broad but shallow knowledge of RE, but what you will be very good at relative to your peers with the same level of experience is assessing whether a deal is an attractive investment, underwriting it and presenting it appropriately to investors.
I think this echos most of the above, but here is my quick take.
As this is just a summer internship...
I would hands down take the REPE gig, really for one main reason.... Deal flow... in a summer you can see more of a transaction/deal cycle in REPE then you possibly can in development. No knock on development internships, but the business is just slower by its nature. You will learn and see more at the REPE gig and thus it is more valuable. Frankly, it also assists more job search and is no harm in development for sure. The fact that a return offer is possible (and not so much at the other one) seals the deal for me.
The only reason you should consider the development one is if you are more than 80% sure you really really really want to get a development job at the end of the day and 80% sure you don't want an REPE type gig. Dev gigs out of UG are tougher to come by as most dev cos can hire people with experience all day long.
Also just remember you are only deciding on an internship here for a summer, not a FT gig (they may not even offer, no promises), so don't make it like this is a long-term career decision.
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