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

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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.

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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...

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Nov 6, 2018
VolatilitySmile:

But I don't see the reason in taking that career detour if you already know REPE is where you want to end up.

Because if you start at a shitty REPE shop you're going to be stuck there for 2-3 years probably and not get good exp. If you go to a good investment sales team, you'll see a ton of deal flow, learn in a (relatively) risk free environment, and then be able to see who the players are in the market since you'll see who's bidding on deals, closing, fundraising, etc. and choose where you want to go. Also, pro tip - good senior brokers are basically HH's on steroids. They know all of the people who you'd want to work for and can call them up and personally deliver your resume to them if you put in a good 2 years with them. It benefits you for obvious reasons and it benefits them by having a 'friendly' placed in a client firm.

If you know the REPE shop you're going to is good, then it's a no-brainer if that's where you want to end up, but it's hard to know that out of the gate until you have been in the market a while.

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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.

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Oct 20, 2018

haha, I was just thinking this the other day- I work in lending where I occasionally prepare an asset summary report where I copy paste some pictures of charts, graphs or maps. And getting those to be right size on a word document where it is still clear is a pain in the ass. If I have to work on that stuff constantly for 100's of pages for an OM, I would fucking kill myself. Could not be more annoying and its frankly the stuff that we should not be doing as there is a better use of our time.

Oct 22, 2018

It's pretty fucking awful but also critically important because good OM becomes the most important document throughout the due diligence process (along with the P&S agreement).

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Oct 22, 2018

As someone that spends 70% of my time every day sizing multiple loans, I read a shit a ton of OM's. While I agree that they are important, I have a bone to pick with some OM's. In my view, they really dont need to be a 100 pages. Whenever I see a OM with 100 pages, I often find so much fluff. Frankly, 20-30 pages are more than sufficient for most properties. Just give me the highlights on the market, sponsor and the property. And nothing makes me happier than seeing an excel file with the T-12, rent roll and proforma. That alone will make my life so much easier. And the easier the broker makes my life, the quicker I will be able to provide feedback on pricing and the loan. Nothing worse than a rent roll provided just in the OM in pdf format that has 30 tenants and a cash flow with 30 different granular line items and no excel versions provided.

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Oct 22, 2018

Completely 100% agree. I aggressively suggested this to my MD to no avail. The market overview is generally worthless, and the location overview really needs to be some solid aerials with bullet points about area job drivers. Also, the financial section should be a supplement in Excel with a PDF version available if needed.

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Nov 8, 2018

Couldn't agree more with an excel supplement.

Nov 6, 2018

The OM's are 100 pages because the brokers are concerned with making it easy for as many groups as possible. So just because you don't care about pages 30-100 and you only want pages 1-20, another group might be the exact opposite. There are many types of groups looking at the OM's, all of which have many different requirements, investors to please, etc.

Nov 8, 2018

Use powerpoint in full page format

Nov 6, 2018

This is not accurate. Most of the big brokerage shops have analysts and then graphics designers who prepare the OM's. Unless the team is really lean the analysts don't usually work on the graphics side, the designers do it with oversight from the junior/mid-level brokers.

Nov 7, 2018

I've been in high-level groups at two of the following (CBRE, JLL, HFF, Eastdil, C&W) and at both firms the producers pawned all graphics management off on the analysts. This is most definitely accurate...

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Nov 7, 2018

It's definitely not at 3 of the ones you mentioned, since I was at one for nearly 4 years at literally the top group in the firm and we did not do that, and my former roommate bounced around to the other 2 and he did 0 work with in-design/graphics layout. You might have had a shitty roll of the dice which is unfortunate but that's not the norm.

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Nov 8, 2018

It definitely was... I worked on the US capital markets heads' team for one of these as an analyst for a year...

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Nov 8, 2018

Got it. It must have been JLL or C&W then, because the way the other three firms are structured the CM leads almost never work on their own OM's, they parachute in and work with the local teams, if they even work on the OM at all.

Nov 8, 2018
InVinoVeritas:

I've been in high-level groups at two of the following (CBRE, JLL, HFF, Eastdil, C&W) and at both firms the producers pawned all graphics management off on the analysts. This is most definitely accurate...

It varies. Lots of IS groups have a designated marketing/design person that is a separate role from the analyst. This tends to be especially true in the "high level" groups.....

Nov 8, 2018

Yes and that person gets overloaded at $35-40k or w/e they are paid and won't stay at the office until 8 or 9pm to get shit done.

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Nov 8, 2018
InVinoVeritas:

Yes and that person gets overloaded at $35-40k or w/e they are paid and won't stay at the office until 8 or 9pm to get shit done.

So you as an analyst were using InDesign and creating graphics? seems like a weird set up.

It's different everywhere, even 2 teams in the same office might handle it differently, but most groups I know of at CB/JLL/CW have designated analysts and designated designers, or the analysts collaborates with an outside/3rd party designer (at smaller offices). I could totally see analysts having to jump into "design" work in powerpoint, but seems unrealistic to expect an analyst to have advanced InDesign/adobe skills.

Either way it's dumb to argue with @MonkeyWrench about this since its different everywhere... the office team vs the industrial team in the same CB/JLL/CW office might not even do it the same way. But for the most part I'd imagine the top teams all have designated design staff.

Nov 8, 2018

This. He mentioned above he was working for a US CM group head, so this would be like Chris Ludeman at CB or Roy March at Eastdil. If so, these guys don't have the same structure as an 'investment sales' team that report up to them. These guys hire analysts that work for them on one-off stuff and probably do some OM creation, but aren't doing any underwriting. Completely different than if you work for like a Darcy Stacom in NYC or a Jay Borzi in SF.

Nov 12, 2018

Oh yeah, its definitely different everywhere. That said, my poor group culture experience in brokerage has left me pretty biased/bitter.

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.

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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.

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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

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Nov 6, 2018

Super helpful right here. Thanks!

Nov 6, 2018

This. The brand name itself is irrelevant, but the deal flow/experience is key. My comments above reflect the fact that it's usually easier to glean how successful a brokerage team is since the info is generally more available to the public (and you as a candidate). It's less risk going in than a REPE shop that you may know nothing about. Obviously if we are talking BX, Carlyle, etc, this would be an easy decision.

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 12, 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 20, 2018

What do you show on your resume for transaction volume? Deals closed, underwritten, etc?

Oct 22, 2018

Deals closed and deals underwritten works. I put a bullet covering process improvements made to base model template and deal volume where I directly managed the execution team (junior analyst, graphics, project coordinator...).

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!

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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.

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.

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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.

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Oct 11, 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.

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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 22, 2018

As you alluded to, the REPE field is mostly opaque. The PERE Top 50 is about as good of a list as there is in finding real estate private equity firms.

I believe I have a excel sheet of non-Top 50 REPE firms on my home computer. PM me and I'll send if I have them.

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.

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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 20, 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!

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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
Oct 22, 2018
Oct 22, 2018