If you are already at an RE investment firm, which graduate degree would use pursue to get to a top tier REPE firm?
I had the following exchange with a fellow WSO RE guy. We thought we'd share here to get more points of view...
Currently, I am exploring the idea of getting MSRE from MIT's Center for Real Estate with the intention of transitioning from my current real estate investment firm into a "top" PE group (BX/Carlyle/KKR/Canyon Cap/MSREF etc etc...I want to work on complex deals).The plan is to apply for MIT's MSRED, then on to PE greatness. I have been advised (repeatedly) to apply to an MBA instead.
I am against this for a couple of reasons:
- I am committed to real estate and I dont plan on changing careers (I already have 3 years investing experience)
- If I go to grad school, I want to learn something relevant, and fluff classes like Marketing and Organizational Behavior are not relevant to my career
- MIT's program is only one yr, its faster and cheaper than an MBA
- I think its more likely for me to get into MIT than H/S/W
- I think MBA grads are tools
- There's something about MIT's culture and envornment that interests me. There's this sense of unbounded academic curiosity on the capmus that I find cool. It gives me a warm and fuzzy feeling (I am a nerd)
- The MIT program is very rigorous, especially with respect to RE financeFrom my conversations with people in a variety of different REPE and REIB groups, I have had a range of responses from "No, dont do it, get an MBA instead" to "Yes, do it, its MIT for fuck's sake". Sometimes their reasoning is relevant and sound, sometimes their reasoning is downright idioitic. Its fustrating.
This is a tough one to answer and to be honest, I've thought about it a lot. I'm assuming you're in the US. If I look at my linkedIn contact list (without searching) I see the following credentials for people at those level of firms in the USA (mostly NYC):
- HBS MBA x3
- Kellogg MBA
- Columbia MBA
- MIT MS (no details of which one & is also one of the holders of an HBS MBA)
- Columbia MSRED
- Wharton bachelors x4
- Other bachelors x3
These are from the Senior Associate to Senior MD/Partner level and are strictly REPE (not investment banking). All the undergrads above are senior guys (mostly MDs).
Blackstone have recently hired an MBA from Kellogg as an associate (he had a lot of previous REPE experience). The Columbia MSRED above is a senior associate at Carlyle. So there is a presence of both qualifications at these firms (remember there are few MSRED guys overall compared with MBAs)... also both have Wharton undergrads as MDs which highlights the importance of work experience in REPE.
Questions you'll need to consider for you to be competitive:
- How much RE experience do you have (deals & years)?
- Is it in acquisitions or Asset Management?
- Is it REPE experience?
- How good is your network? Do you know people at your target firms or will you rely on OCR?
Assuming your experience shapes up I would only go for the MIT MSRED over a H/S/W MBA if your network is solid, i.e. that you will be able to get your details in front of the right guys at most of your target firms. If so, apply early and ask for an internship prior to starting at MIT, and/ or offer to potentially work on a research project for them as part of your thesis (I think it's 3 months). You don't want to be at a disadvantage to MBA guys who have interned.
Yes, MBAs are tools on average, but you won't be competing with normal MBAs. Your "relevant" competition will be MBAs with REPE experience and experienced hires. Those guys aren't necessarily tools. Also, if you do go for the MSRED, I suggest you take electives in corporate finance to show that you have the corporate side covered. I think the MSRED can take 2 electives from Sloan so that should be enough (you'll know the RE stuff cold anyway).
Your MBA competition will look something like this:
http://realestate.wharton.upenn.edu/resumebook/in…
In RE, your network matters a lot. You can be smarter and know how to do the right deals in the right way, but that isn't going to make you succeed unless you have sold someone on your ability to manager their money or the merits of getting a deal done. The RE circle is small. Focus on making relationships now. Do you have someone who can refer your MIT resume to the guys at your target firms? Better yet, to these guys know who you are? If so, these jobs are yours to lose.
REPE hiring is needs based so there is a bit of randomness to it. You can counteract this with networking over time.
I'm sure you've checked out MIT's own advice:
http://web.mit.edu/cre/apply/mba-msred.html
Ultimately, the MIT MSRED is a great course, which will give you the academics and the MIT brand, but you will have to put in work to be competitive for those jobs no matter what degree you do. These are some of the best roles in the sector.
Think of what options you have with the MSRED outside of those jobs though, i.e. other RE investing (debt?), or RE development.
Choices:
I would suggest applying to both MIT MSRED and the top MBAs H/S/W (maybe Columbia and others that interest you). You'll have a better idea of what choice to make once you have the acceptance letters.
Also, have you considered trying to network/lateral into your target roles now? If you can, this would be the best situation even if you come in at the same level as you are now.
What do others think? How does it differ in your firms / countries?
Full disclosure - did a real estate program at top school in Europe and am currently working in London at a large firm similar to those on your list.
The people in my program who went on to the mega REPE firms were the clear stand-outs in the class and already had great credentials. The rest of the class struggled and ended up in places like CBRE or C&W as surveyors or researchers or at much smaller investment firms that no one has ever heard of. It was pretty polarized. The top group represented 10-15% of the people. You have to be sure you are one of those people who is going to be able to stand out in order to get the jobs you want - otherwise I think the program is a waste.
I imagine this is different than a place like Wharton which sends many people to larger REPE shops. I have a friend who finished at Wharton, came to London and found a very solid REPE job within a few weeks. Another person I work with here went to LBS for his MBA. We have a few HBS grads as well.
Your comments about REPE being small and relationship driven are 100% dead on. Most people I know in the industry got their jobs through their network, including myself. Don't remember much if any OCR.
I think I'd lean towards the MBA if I had to do it again. I think a lot of my situation has to do with luck as well.
Thanks RE_Banker, this is very useful insight...
Note: I got both my MBA and MSRED.
RE_Banker is spot on. Those that I knew who did the MSRED and who went on to work for the bigger shops tended to have had a background in IB or some other type of high finance. Most others went into some sort of development or brokerage.
Many RE firms tend to put more emphasis on the MBA even if it's not as specific to the industry. I graduated by joining the RE group at a BB and probably wouldn't have been able to pull it off if I only had a MSRED. It's unfortunate because like you said, I didn't particularly enjoy suffering through marketing classes and the like. Plus many MBA programs often don't have enough RE related courses.
MIT looks like it offers a dual degree program (MBA and MSRED) so that might be something to consider. However, you may have to forgo the internship summer if you do that...
Thanks kjl, did you do your MSRED first or the MBA?
Sent you a PM.
Recent employment statistics for the Columbia MSRED are grim. Something like 50%.
50% is rough... The sector still has a lot to work through financially before work can pick up on the asset side.
CMBS issuance in the USA last year (2011) was sub $40 billion... the total combined US CMBS issuance from 2008 to 2011 was sub $60 billion. To put that in perspective, in 2007 alone it was $230 billion or so.
All info on this thread is bang-on.
I'll come out and say it - I was the guy who PMed Relinquis that original PM.
Through my own research into the MIT MSRED program and conversation with people in the business - it would be worthwhile to pursue an MIT MSRED over a traditional MBA IF AND ONLY IF you have relevant experience that relates to the type of work (either in acquisitions or asset management) that REPE groups do. If you are looking to switch careers from RE brokerage or property management (or similar) into REPE, the MIT MSRED may not help you achieve your goals of working at a top REPE group. However, if you have experience in constructing cash flows from scratch, modeling value-add type construction and partnership agreements, then the a top MSRED might give you the brand-name boost and analytical/conceptual framework that a REPE firm would find valueable.
To add, I wouldnt recommend that someone should also pursue a top MBA to break into REPE without the prior modeling exp to back it up. You really need the combination of the two (relevant exp and either top MBA or top MSRED) to make the transition work. Conventional thinking says that a top MBA (H/S/W) opens all doors; I dont think this is the case nowadays for ALL high-end careers (like PE and HF), except for careers that have the in-place training pipelines that are designed to take raw talent and "mold" you (IB, MC and F500 corp management programs).
Anyone else applying to MSRED programs this year? Cornell acceptances have already been sent out; Columbia should be early/mid March and MIT slightly after that.
RE Cap Markets - there are some neat but highly competitive programs out there to train raw talent and "mold" you into a real estate professional/future leader, such as the Tishman Speyer program (http://www.tishmanspeyer.com/#!/careers/mba) - that is my goal post MSRED. I've also seen numerous MSREDs from Columbia/MIT at top PE shops in their RE groups, such as Carlyle and Blackstone. Also, as you know, networking and connections in this business are hugely valuable and if one is lucky enough to have a couple of successful connections willing to bat for them, that will make their placement prospects much stronger.
I don't think Columbia published official placement stats, but the few '12 grads i've spoken to were adamant that their classmates were nearly entirely employed within 6 months of graduation.
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