One reason for low pay in CRE- A datapoint
Working with HR to fill an analyst/associate position for a mid size bank (a tier or two below JP/Wells). Requiring a year or two experience, so there is some "barrier "(lol) to entry but c'mon in all seriousness, there is still a very low barrier to entry. Received over 175 resumes in just two weeks. Employers can so afford to have you work 80+ hours a week and pay you little (at least in terms of $/hr), even if you get paid $150k+ all in, its still shit if you consistently work 9 AM- 9 PM and also work on some weekends, you just go home after work, sleep and wake up, rinse and repeat, be a zombie on the weekends because of lack of sleep and have your mental health suffer. I guess we can always do mental gymnastics and convince ourselves of anything and that this is a rite of passage because of "promote" one day we may or may not get or the low pay is worth it because we will become Sam Zell one day lol.
At the 1-2 years of experience mark, you will always get tons of resumes. When a well-known REPE fund is looking for someone with 4+ years of PE experience, the pool of viable candidates gets significantly smaller. It’s no surprise that pay goes up a lot at that level as well
But yes, for entry level positions, there will always be tons of apps, tons of viable candidates because (as you mentioned), the bar is very low.
Fair but I have run the hiring process at the 3-5 year experience level. Especially at a well known firm, you are still getting 25-50 applications and around half of those are solid candidates where it can be a coin flip and you cannot go wrong. When it is still lopsided at a senior associate/VP level, you get the short end of the stick when it comes to pay, hours etc as there are people waiting to take your spot.
Is this for lending?
anyways, there are two sides to every story.
I talked to a group head at a RE asset manager and he was telling me how competitive hiring is... from HIS side of the fence. He said “everyone is hiring right now, it’s tough”
Separate thought: You hear tons of complaints about low pay on WSO because people on this forum are generally trying to progress their career. If you are a VP / senior associate in REPE making $300k-$450k, you’re not on here trying to advance your career. You’re working hard, building your network, going to lunch with brokers, doing everything you can to position yourself for that director jump. You’re not on WSO debating whether or not MetLife is a REPE fund
HAHAHA!
for the record metlife is not REPE, thx
BUT THEY DEPLOY PRIVATE EQUITY INTO RE!!!!1
I have to emphasize that I’m being sarcastic to not start a war here
Yeah CRE is weird in the sense that you have an undergrad and a MSRE student (with little work experience) both applying to the same analyst level jobs like at Berkadia, W/D, etc. Like wtf? It just goes back to a low barrier of entry.
What really drives this is that RE is a very top-heavy business, so the ratio of entry level jobs : total jobs in the industry is insanely tight
if sam zell was 22 in 2021 he'd probably be flipping expensive sneakers on tiktok, not going into real estate.
in fact come to think of it, what is it, 70% of his wealth is no longer in real estate? he often complains about overpriced opportunities and too much competition/capital etc...
Dont say that too loud here, CRE is apparently the be all and end all when it comes to building wealth on here. I say this as someone who works in the industry. And apparently being a wage slave is going to teach you to be an "entrepreneur" and do your own deals one day. Speaking from experience, all I see is a lot of wannabes only dreaming of "promotes" with very few actually doing shit. Heck, I have a hell a lot more respect for 1-4 unit investors who are hustling and and are actually doing their own deals than jerking off about keyboard shortcuts in excel at 2AM.
i might argue that the position you started this thread about is on the cusp of 'worthiness' if the young person in question can take that job and turn it into a $300k/yr role at Fortress a couple years later or whatever. but otherwise fuck this shit, you could make that at Remax. literally.
yup - if you are over the age of 25 and still care about excel you are doomed to start your own business...
I don't think that just because there are a lot of applicants, a company will pay you less. That seems to me like more of a company issue. There are plenty of roles out there that get tons of applications (across all industries), that don't shaft people on pay.
Honestly, how much do you think a person should paid for doing excel models? The fact that one can earn six figures out of undergrad doing something that many with average business school degree from even a low tier school could actually do should be celebrated. Not to offend, but the modeling and most of the tasks that analysts/associates do is not that complex or special (and I hold same view for realm of I-banking, private equity, and sometimes hedge funds...).
Yes, part of the reason for pay is the hours. You wouldn't go nuts trying to get these jobs if they paid $50k would you? It's part of the trade, getting paid well for this type of works really shouldn't be complained about imho!
I would go nuts if it paid $50k, that would be quite good for me
Have you tried making that offer to anyone?
Speaking to the IB side of it, due to the hours, no good candidates would go into IB if the pay wasn't what it is. The amount of rage quits a few months into the job would be staggering and retaining talent would be impossible (why banks have all bumped comp + given bonuses and still have out of this world attrition). This obviously isn't the case w/ jobs that don't have comparable hours. The banks know that a AN1 doesn't know anything and will need to have their hand held through simple tasks for quite a while, but they're not being paid to be smart, they're being paid for being willing to turn useless formatting comments at 3am on a Saturday for the 4th weekend in a row.
What exactly are you complaining about? This applies equally to any high paying career when you're at a junior stage. And no one is a "zombie" for working 9AM to 9PM, even if those are real work hours - if you're up until 1AM then sure, but if I'm home at 9:30 and have an hour or two to unwind and then get 8 hours of sleep, that isn't turning me into a zombie.
And yes, the idea is that one day you'll have the opportunity to invest and/or develop on your own. If you're trying to make the point that most people don't achieve that goal to a meaningful degree, then... I don't know what to tell you? Most small business owners fail. Few start ups get bought for significant dollars. Most bankers spend 40 years climbing a corporate ladder, working awful hours and kissing every ass in sight, and few end up cracking the seven figure mark consistently. That's life. The top of the pyramid is always narrow.
An hour or two once you get home to unwind is awful. Forget about going to grab drinks after work and then heading home as you are already barely able to see your spouse/kids as is as they might already be done with dinner and off to bed. And if you bring work home or have things to do in your personal life (making breakfast for kids, putting them to sleep etc), it is tough to get 8 hours of sleep. That's life like you said, I am okay accepting that. I dont have to do some extreme mental gymnastics to pretend otherwise. It is what it is.
Agree with this. If I get to the point where I have a wife/kids and am getting home late every night, I will 100% be reevaluating my career at that point. Whether that is a new firm or a new career altogether, I won't let myself live that kind of lifestyle.
Except the whole point of this thread is that it's people with a couple years experience. I understand that there are exceptional cases, but I'd argue it's rare enough that you find people in their mid 20s with a wife and kids that we can discount it from the conversation. Lower tier employees spend their time doing some of the work no one else wants to do, but that changes as you progress. I know very few people with young families (think late 20s/early 30s) who are regularly working 80 hour weeks, and certainly they aren't doing so from the office. Leave at 6pm and just be on email from 9-11pm after the kids go to sleep is pretty typical.
And juniors find time for drinks. If the complaint is that you (generically) aren't in college and can't get shitfaced every night of the week because you have to work, that isn't an argument I have much sympathy for. If you have to work late on an occasional Friday because a closing is coming up, well, that's why you make a ton of money as a kid with no experience - you're being paid to sacrifice your time, not for some amazing skill set.
If you're getting slammed with these kinds of hours and work at age 35, then maybe it's time to reevaluate your position within the industry, ya know? If the only value you provide at that point is that you work long hours, then it's time to move on, because as you say, there isn't much quality of life there.
All I'm going say is I have friend who went to FIU in South Florida with a BA in communication working at Google in a non-technical role that just turned 30. He makes 150k, 200k in stock options that vest quarterly, and full benefits. He's been working remotely from Hawaii most of the pandemic. Obviously this is tech and not a fair comparison. I just state this to say that real estate company better get their act together to attract and retain talent.
Everyone that I know that makes 150K + in CRE, whether it be asset management, development, acquisition roles, gets worked like an absolute slave. To the old heads in the forum what percentage of people would you say get to a point where they get carry and get to directly invest in deals? I'm trying to understand if it is really worth it, given the amount hours it takes to get to that point.
I think it's a fair question to ask, and I'd be curious to see what others have to say. Getting worked to the bone just to make $300k in your 40s/50's isn't exactly inspiring...
This is my take from someone earning a decent income- $160K all in but absolutely work to the bone. Knowing what I know now, if I had to go back a decade ago, only thing I would choose to do differently is to prevent myself from having tunnel vision. I stumbled upon real estate and then just decided to continue down this path and here I am today. Like many others on here, I am in too deep at this point. I have invested time, money and there is no going back. This is where all the mental gymnastics come into play- this is worth it because of promote one day, etc. I would tell a younger me to pay more attention to the world around us, explore different paths during the summers in college. You dont have to intern in all of them, just shadowing professionals from different fields and having coffee chats would help. For example- back then, I had no idea about the diverse non technical roles in tech. Could be grass is greener on the other side thing, but I think I would actually enjoy tech sales . It is not 100% commissioned or door to door sales selling junk, if you are in account management at places like Sales Force for example where customers come knocking on your door as opposed to the other way round, you are basically on a salary +bonus structure. Not too different from originators at my bank who are also basically account managers (we have clients like PGIM, Taurus, Investcorp etc who give us a last look on every deal as we have a strong relationship with them) and get paid a base + bonus. The only difference is account managers at Sales Force are not getting worked to the bone and get similar pay with stock incentives. Tech sales is just one example, but when you are talking about low barrier to entry fields like CRE and $150k+ jobs that allows you to have a middle/upper middle class life, there are lots of other things we all could be doing. Knowing what I know now- the vast majority earn $150-200k+ base with a bonus on top of it in the industry, I would not have tunnel vision as CRE is the be all and end all and the only ticket for you to earn $150K+. To your question about earning promote- cannot tell you an exact %, but it is miniscule, and whatever % people tell you on here, cut that in half lol, goes back to my point of about mental gymnastics as we are all in too deep at this point.
Depressing for someone who just entered the real estate world :/
Thank you for sharing. I appreciate this insight.
To hopefully provide some sunlight in this thread - I'm 5 years in and expect $160k + another $30-60k based on closings this year. I work 35-45 hour weeks and have a direct path to participating as my balance sheet matures. There are great gigs out there, my advice would be to seek out smaller more entrepreneurial shops. I've looked at opportunities at institutional developers and PE shops and it just doesn't seem worth it unless you view it as a quick stepping stone to getting you in with the right people.
God bless you
Thank you for sharing. I appreciate this insight.
I potentially could have made more money in another career path (I'd probably go tech if I had to do it all over), but RE has been a good career and it's been a good balance of hours (longer in the early years, but around ~50 hours/week over the past 3). At ~8 years of exp. I'm at ~$250k in cash comp and another ~$150k in carry. There are plenty of people making more than me, but I'm pretty happy with what I have.
What type of role and asset class do you focus on?
Multifamily development/value-add, mostly work in AM, but do a little bit of everything from acquisitions to investor relations to capital markets (mostly debt, but some equity). I'm at a smaller MM shop so I have/get to wear different hats as needed.
This is particularly depressing. I never really had interest in real estate because of that low barrier to entry issue. Hope everyone struggling lands a gig soon!
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