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Yes, some newer shops have been known to offer carry/promote in exchange for lower salaries/annual bonuses. The whole "start up" universe relies on stock grants and options to keep people who could command higher pay; far less common in real estate but not unheard of.
But a word of warning, this is not necessarily the great thing you may think it is is. A firm unable to pay market salaries is undercapitalized.... Can they pay market legal bills? Can they really do pursuits? Have they even raised enough money to execute a deal? You should approach these firms or offers like this with skepticism, not excitement. Especially as a new/junior employee. Doing this for a mid to senior person makes far more sense, they are 1. more expensive and 2. more likely to drive the success of the firm via their own efforts plus 3. They need the added incentive to leave established firms and take the risk.
In your case, you are just taking more risk at the wrong part of a career. You really should decide based on mentorship, training, and ability to grow on a team. Some small/new shops are 100% great for this, some will be total nightmares. It is also worth noting that equity comes in the form of "golden handcuffs", meaning if you leave the firm for a new gig, you lose it. If it is a real startup venture, the "lockup" could be 5-7 years depending on speed of deal completion (I mean, you probably can't get paid out until it goes full cycle, could be 3-5 years, but realistically you can't count on it. And of course, they can fire you or lay you off in between as well.
So with all that said, if you want to find these firms they may offer this. Just hang around the local NAIOP/ULI, likely you will find or hear about some. Network directly as you feel fit. Side note/advice, I wouldn't ask about the equity in lieu of full salary gig, that is something they need to bring up if they choose.
Agree! Don't join an undercapitalized shop that will promise you promote. Often times, the promote comes with handcuffs that you have to stay with the firm and if the market is f**ked or you work for idiots, you will end up with zero promote, incompetent leadership that can't execute and a toxic workplace.
The promote should be a bonus for a slight discount to market pay. For example, if you expect total pay to be $150-175K for base and bonus at the associate level, take $125-$150K with promote that might put you at $200-250K+.
If the promote comes with strings attached, WALK AWAY!!!!! Even if you leave the firm, you should keep your share of the promote for deals you are involved in. Make sure the firm you are joining closed deals last year or they have a few $$$ to transact on opportunities in the current market. Ask brokers, lenders, REPE, developers and other industry guys/girls about their reputation. Hearing the team you are working for are "good guys" is not enough!!! You want to be around guys who are respected and have the ability to execute in various cycles. This is a lesson I have had to learn the hard way!
It's also worth noting that small shops may not want you. At a larger place, there are corporate structures in place that make it easier to onboard a new hire, train them, and turn them into productive members of the firm. If you're joining a new shop with a principal or two and maybe a spare employee, no one has the time, experience, or desire to train you or help you, because they're scrambling to make shit work and the lowest priority on their list is "help this guy get good experience." They want to keep the lights on, not give you the best possible experience, and knowing that they may just pass on you entirely in favor of someone who's been in the field, has contacts, has experience, and doesn't need babysitting. Especially if they're compensating you with carry and not cash, because the nightmare scenario is hiring the wrong person and having given away a finite piece of the company in return for a bad fit.
More generally, there seems to be a real disconnect on these boards between the perception and reality of how easy it is to get carry, anywhere. Owners aren't stupid and they know the value of their carry, they're not gonna be in a hurry to give it away. If you aren't an absolutely integral employee to the business, you can forget about it. Either you're sourcing and driving deals, or you've been there for years and years. It's not "I'm gonna crank out 300 potential underwritings a year and the BLAM! I'll get 350 bps of carry!".
This is very true, carry is a generally used as 1. Recruiting incentive for top talent, 2. Retention plan for top talent, 3. Reward for great work (preemptive retention plan) and/or 4. Motivational reward to encourage high performance (align effort with pay). Rarely is it ever used as a means of lowering salaries off market (sometimes as means of lowering annual bonuses however). Think about it, how cash strapped must you be to give up something potentially work say $50k to reduce savings of say $10-15k (totally random made up numbers).
No.
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