Investment Sales or REPE?

Hi All,
I'm at a bit of a crossroads. My long-term goal is to work my way up at a top-tier PERE50 firm (something along the lines of Carlyle, Starwood, or Brookfield) and am wondering which of these 2 offers would give me the best prospect at breaking in.

Option 1 is to take a position as an Investment Sales analyst at a top brokerage in my market (think Eastdil, JLL, etc.) and use the position to learn the market, build my network, and get deal exposure.

Option 2 is to take a position as an acquisitions analyst at a small PERE firm that has had some good past performance and growing its AUM pretty quickly. Hopeful the company's track record continues, and I get to work with a tight-knit group and get some underwriting experience in the process.

I am attracted to option 1 because of the deal exposure and networking opportunities, but option 2 is closer in line with the work I am trying to do in the long-term.

Any comments will be appreciated. Thanks

Comments (53)

Oct 4, 2018

Really depends. Is the investment sales job a salaried position?

Array

Oct 4, 2018

Yes, the analyst position is salaried. Somewhat lower salary than option 2 but I'm not as concerned with the salary so much as with exit-ops.

Most Helpful
Oct 4, 2018

Take option 2 - many in REPE consider sales brokers to be monkeys.

    • 9
    • 1
Oct 4, 2018

If I only work as an analyst and do not transfer into full-fledged broker, do you think that would still be the perception?

Oct 4, 2018

I do know several people that started as analysts at prestigious brokerages and then switched to analyst/associate roles at prestigious REPE. But I don't see the reason in taking that career detour if you already know REPE is where you want to end up. For me to take the brokerage offer it would have to be REALLY special such as Eastdil NYC, mentored by CEO, etc...

Learn More

Side-by-side comparison of top modeling training courses + exclusive discount through WSO here.

Oct 11, 2018

An enormous amount of your time will be spent managing the graphics process for hundreds of pages of marketing materials that give you little quality experience for REPE. You will most likely seriously regret going this route.

    • 1
Oct 11, 2018

This. Get experience directly related to where you want to be. If you don't want to a broker, don't go into brokerage. I learned this the hard way.

Nov 8, 2018

I would also say that in this point in the cycle, it's prob best to be with a group that has healthy AUM and can live on mgmt fees until the next buy cycle.

the buy side is definitely more prestigious than brokerage, and I do think you will learn more. Being in acquisitions, you will probably have MORE deal flow than in brokerage.

Oct 4, 2018

There's so much variance in the quality of a brokerage team even within the same company. If this was eastdil nyc, the decision would be easy.

The market you're working in and the one you want to be in long term could also play a role in this.

Is the fund a generalist fund where you're getting exposure to multiple property types. What about the investment sales team?

Too many unknowns but I'd go REPE based on what you said.

    • 1
Oct 4, 2018

Without giving too much away, the market I'm looking at is a large secondary market (think Chicago or Atlanta). The fund is generalist and does some interesting property types like senior living, storage, and some others. As for the investment sales team, they do multifamily and office. I really don't enough about the culture of brokerage team to know how much support their analysts but deal volume is solid.

My only issue with going the REPE route is I don't get any sort of 'brand name' value on my resume, and I feel like I'm tying my career towards a company whose future I cannot predict.

Oct 4, 2018

The deals you work on will speak louder than the name brand of your company. If you work at CBRE and do nothing but $5-10mil multifamily deals, the name brand won't get you into Carlyle. If your fund is lesser known but you work on quality deals and you're given lots of responsibility, no one will care that your firm doesn't have a brand name. Maybe follow up with the companies and try to find out if they fall into those groups or not.

Call up a mentor or alumnus who you've never spoken to and have him help you out with the decision

    • 1
Oct 11, 2018
meridian_blue:

My only issue with going the REPE route is I don't get any sort of 'brand name' value on my resume, and I feel like I'm tying my career towards a company whose future I cannot predict.

Brand value is overrated. No one hiring you in 5 years (or whenever) is going to give a shit about the name; they're going to care that you worked on interesting deals and know your shit.

Oct 11, 2018

Those are major markets. You can easily parlay them into NY if you want. Brand name doesn't matter nearly as much as deal size/flow, exposure to different asset classes, and job responsibilities. Be sure to quantify on your resume transaction volume you work on with $ signs.

Oct 4, 2018

If you go to Eastdil, you won't be seen as a typical broker! Otherwise, join a top team at HFF, CB, CW, Berkadia, JLL, etc and you will be good either way.

To get a shot at Carlyle of any of the shops you mentioned, make sure daddy and mommy knows somebody!!! or you went to Georgetown, Yale, NYU, Harvard, etc which again most likely means mommy and daddy knows somebody or as COIN!

    • 2
    • 2
Oct 4, 2018

I would say the latter especially if the firm is doing some meaningful deals and sophisticated underwriting. Brokers only see one component when analyzing the property. At least for me, REPE adds multiple layers and lenses when analyzing an asset. And it's easier to transition as well.

Learn More

Side-by-side comparison of top modeling training courses + exclusive discount through WSO here.

Oct 7, 2018

Some of the REPE 50 will be open to hiring i-sales analysts from JLL/CBRE/Eastdil/HFF, but I don't think the firms mentioned in your OP do, unless it is Eastdil NY/SF/LA REIB or I-Sales. Almost every REPE 50 firm would hire someone from your option 2 if you get good transnational experience working with sharp guys. One thing to look into is whether option 2 will focus on any property types requiring ARGUS (medical office?). While some groups would be open to training you how to use ARGUS, not all will be ok with this.

    • 1
Oct 11, 2018

You want to work at a top REPE firm until you realize the guys who make the most money are the small, local operators who take risk.

    • 3
Oct 4, 2018

*The owners of the local small operators make the most money. At the Analyst/Associate level you definitely make more at a PE shop.

    • 1
Oct 12, 2018

So true. Given that this is WSO, everyone guns for PERE Top 50, thinking that it provides the most income potential. However, being the owner of a operator is where the money is.

Caveat Emptor - Being an operator can come with significantly more risk, whereas the risk-adjusted compensation of REPE is better.

Oct 22, 2018

Duke I think the main reason a lot of people gun for the PERE Top 50 is two fold.

  1. Prestige
  2. Visibility

Obviously the prestige explains itself but for someone researching REPE firms in their area where would they start? How would they find the smaller ones? I honestly don't know the answer besides asking people at work, or looking off of the PERE top 50 and seeing if they have offices in my area.

Oct 11, 2018

Option 2. If working in PERE is your long term goal, you're going to want to get experience with underwriting deals and learning about fund structure, capital raising, etc.

Oct 11, 2018

If its actually Eastdil, which assuming it's not due to the comment about salary, you will make far more than any small REPE would pay a first year Analyst. Also exits from IS if your own a good team are really good.

Oct 11, 2018

As others have mentioned, only work in Investment Sales if it's a top shop in a solid market as this will position you the best for the firms you want to work for down the road. Additionally, if you are working in Eastdil - Investment Sales in say New York, over a few year period you will have the ability to build your network very quickly at some of the aforementioned firms you'd want to work for down the road.

Robert Clayton Dean: What is happening?
Brill: I blew up the building.
Robert Clayton Dean: Why?
Brill: Because you made a phone call.

Oct 12, 2018

Unless its eastdil, I'd recommend going REPE. Much easier to go REPE -> REPE than compete with all of the other brokerage kids that want to go into REPE.

Why dick around at a brokerage if you can go immediately to the buy side?

Oct 12, 2018

Any idea on amount of deal flow at small PERE?

Oct 4, 2018

it's shop dependent. i work at a small REPE. i source deals, do the modeling, discuss with leadership, etc.

challenge is they want me to go on property tours 2-3 days a week and also do the modeling which is not enough time to all that work!!

when i share a deal with leadership, comps have to read, sales comps have to be ready, have to have modeled the deal to 99% (usually the only change from my analysis is usually that the owner are more aggressive on rents than me). people will fire questions over email or in person to me and i will answer those questions.

i am constantly networking with brokers and owners to learn what is going on in the market. only advantage of a carlyle over a small shop is that you have access to doing the BIGGEST freaking deals and capital is easy. small firms, i have to underwrite 90 deals for us to potentially buy one. can be frustrating but you learn just as much and you are also more hands on. i am dealing with architect, construction team and folks doing the value add improvements. i also get to review LOIs and get really involved in deals. i can do what the big guys do just that my buddies at the bigger shops make more money than me at my level. hopefully that will change soon!

    • 3
Oct 21, 2018

I would go for option two. Just a tip. Don't always examine $AUM. Since PERE commonly has a short-term investment horizon, I would weight IRR / EM metrics higher (if known) and success of deals. All the best.

Oct 22, 2018

Everyone realizes Eastdil is getting their ass kicked right now, right? Still relevant and well respected, no doubt, but they are not the elephant in the room that they were a few years ago.

Oct 22, 2018
Comment
Oct 22, 2018