Help Needed - got a new offer

Hello,

I've recently received an offer from a small REIT. Given the team is small, this role will be covering basically everything - UW, AM, due diligence, reporting, etc.

The comp isn't ideal - about 20k less than my current role. I am currently working in Big4 valuation. I have been actively looking for quite some time. I've realized how hard it is to transition from valuation to a buyside front office role.

Part of me wants to take this offer - it is still a buyside front-office ish role. Part of me wants to keep looking - maybe I will be able to get into a more prestigious/bigger REPE (I've had a few final rounds for different buyside front office openings; however, this is my first offer).

Please let me know your opinions/recommendations.

Thank you!

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Comments (19)

Jul 18, 2018

First of all - how do you like Big 4 valuation? (Possibler career path for me, I'm a college student)

If you can't negotiate your salary, my advice is to do what makes you happy. If 20k really doesn't mean much to you each year, and this new role will make you happier I would do it.

Jul 18, 2018

Similar to audit - I don't think it adds any value. It will becomea "sales" job as you prgoress

Jul 18, 2018

What are you planning for yourself career-wise and how long have you been at the big 4? $20k less seems pretty steep considering that big 4 doesn't typically pay well already. Would that not set you back financially?

What property type and markets does the REIT focus on?

Jul 18, 2018

I think I am good enough to get into a reputable REPE. I've landed final rounds with legit firms, but nothing converted prior to this offer.

I have several years of experiences. I just feel that the longer you stay in Big4, the harder it takes to get. This is why I am in a semi-desperate mind set.

Jul 18, 2018

Do you know why those other offers didn't come through?

You could take the gig, but does it fit with what you want to do long-term or a good starting job in RE? If it doesn't work out (meaning a property type, market, or individual role you don't like) are you willing to stick it out a year for the lower pay?

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Jul 18, 2018

How long have you been in the Big 4 Valuation role?

Jul 18, 2018

Experience trumps everything. I don't know where you are located, but I feel like there are less acquisitions jobs than a year ago. Worst case scenario is you work here for a year and network, and take another job a year or two later.

Jul 18, 2018
capratetoolow:

about 20k less

I would be curious to know the percentage hit you are taking on salary and if the REIT offer is market for your experience level. I think you you are right to assume the PERE shops are going to be a better experience, especially if the REIT is not a public REIT. I just left a non-traded retail capital REIT and it was not a real estate company as much as it was a fee collecting company. I would weigh the firms investor base heavily in my mind, is it institutional capital or retail. < that is the major difference for me. If you are in the Texas market I can try to help you out more....

Jul 18, 2018

Could you please tell me a little bit more about your prior experience? Mine is a non-traded REIT funded from retail sources as well...

20K is about 10~15%

Jul 18, 2018
capratetoolow:

Could you please tell me a little bit more about your prior experience? Mine is a non-traded REIT funded from retail sources as well...

20K is about 10~15%

on a percentage basis, that is not a bad hit. Based on my understanding, the non traded REIT space is a dying industry. Blackstone has decided they want to enter retail capital and they are coming in a big way, from what I have heard they account for 70%+ of retail capital raised. Blackstone can do this because they are giving investors what they want, opportunities for liquidity events. Some of the investors in the REIT I left died before they got there money back, I will let that sink in. For the non-traded REIT, the REIT will either need to create a liquidity event to let shareholders redeem, go public, or liquidate through a portfolio level buyout. If the CEO wants to collect fees forever, the investors are at the CEO's mercy. Our cost of capital was 12%+ we had to pay the financial planner an upfront fee to push our product (mis aligned incentives for the retail capital) and then we had to have fundraising in house to push our product to the financial planners. Public REITs just issue equity, and they can do it when their equity is trading at a premium to NAV. The public REIT can also arbitrage the public private differential to add value. Any investor who would choose a non-traded REIT over the other options within the real estate investment landscape is being taken advantage of. For me personally, the non traded REIT space cannot die fast enough, more than anyone else, the retail investor needs honest financial advice, and they are not getting it.

EDIT: Sorry, I let some passion through. The firm your looking at could be working hard for the retail investor, but at the same time, the costs of raising capital for any non traded REIT will make them less competitive in the long run. Unless your firm is working hard to go public, I would say it is just trying to take advantage of the retail investor as long as it can. Also, when you are working with "ignorant" capital, it will never cause you enough pain to really need to work for it and create a powerful, effective organization. institutional capital is on your ass everyday.

EDIT II: all that being said. I worked for a non traded REIT for one year and now I am about to start at a dream job in REPE tomorrow. Already some of the projects I have started working on are so interesting, it seems to be a very different game. But, if you really want to get into real estate, you might take the job and learn a lot to get to where you want to be.

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Most Helpful
Jul 19, 2018

This question seems mostly about salary and the offer than the experience. So, I'll give my thoughts on the salary, verses if the role will provide the exposure you need to continue on your desired career track.

TLDR: Negotiate, and press your cards from every angle. Get out of the Big4 Valuations. You can always get into this new role and keep looking. There's no harm in that. Full read below:

For the other final round interviews: if you haven't already, let them know you have an offer in hand. Press them. If they like you enough, they should expedite their decision. If they cut you from the process, you kind of have your answer that they have/are seeking better candidates. But, they might extend you an offer. Either way, you'll get out of the mindset of waiting around for them to let you know whats up or down. Personal experience: Not even a month ago I had a great interview. Was called in for another one. In the midst them scheduling me for the final round (as well as the modeling test) it went dead silent. Long story short, another candidate they were considering had another offer "they needed to address with the other firm". Said candidate forced their hand and the company I was interviewing for extended them an offer that they accepted. Cut everyone else from the process. Not saying I would have gotten it anyway, but I wasn't eliminated based on my resume, experience, first round interview, etc.

For the REIT/offer in hand: get them as close to making you whole as possible. Signing bonus, annual bonus, retirement (if your Big 4 is like my firm, we don't have a 401K match) other benefits (paying for some sort of professional development/schooling). Sometimes ancillary benefits can make up ground on the difference. 5+ years at Big 4 you're most likely going to carry a higher salary than an entry level analyst job, more times than not (assuming Tier 1 Market). A 10-15% dip isn't terrible, but certainly adjusts your standard of living. Is their offer abysmal in general? If you can still afford food and rent, but maybe have to cut back on discretionary spending for a year or two, it might be worth it in the long run. You could also potentially leverage the other interviews. This might be hard because you don't have an offer, but time kills all deals. Do the whole song and dance about appreciating the offer, this is what I think I'm worth because of X, Y, and Z, and then professionally let them know you have had other interviews that have gone into deep rounds and are expecting other offers. Could back fire, but might give leverage in the negotiation.

Take it from me...if you hold out for that slam dunk PE role with the nice salary + bonus, you *might * be waiting a while. I turned down something over a year ago because "it wasn't ideal" and i'm still doing the same stuff at my current gig....pm if you want more info.

EDIT: I digress a bit. I'm definitely not saying take the offer in hand just to take it. But, if you're truly going to get exposure to transactions, equity(?) and debt, underwriting, asset management, and they have a healthy deal flow, these skills will get you closer to the end goal than 3rd party Big 4 valuation/PPA. I presume you have some decent modeling skills after doing 5+ years of valuations.

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