Opinions on potential move?
Hi all,
I've currently got an interview lined up at a firm that I am not 100% sure about and any opinions on what I should do would be much appreciated. Before I outline my dilemma, here's a summary of my current background
- I am currently working as an analyst in an investment team in a big 4 real estate firm where my main focus is on residential (retirement, multi family, loan books etc)
- My modelling is pretty good - I have a friend in PERE who has been helping me as I have learned (self taught) and I have passed the modelling tests he would set his own analysts when hiring. Having seen what IBD candidates have produced (he has sent a couple of their tests results to me), I would say that I am on par, if not better, than 1st year analysts looking to move into PERE.
- I am desperate to move as my role is becoming more and more consultancy based. Despite countless promises from my boss, I am not doing as much investment work as I would like, if any. He just sees me as a business development tool and I am not growing where I want to.
- I want to move into commercial and I have been looking for around a year, but I am not having any luck because I am consistently pigeonholed. This is highly frustrating considering most job adverts are looking at people with just one year's experience and what can you really learn in one year? Moreover, I can probably model just as well.
I have an interview lined up this week at an investment firm which, if it invested in commercial, would be my dream job. However, this firm is currently embarking on Prime Residential developments around the world - think London, NYC and some niche developments in the Caribbean. They also invest in residential through mezz & pref equity.
I initially turned the recruiter down when they ran this role past me purely because he sold them as a residential firm. However I researched the firm and found out that it had a good commercial portfolio which exited at an IRR of 20%+. As a result, I decided to go back to the recruiter and asked them to submit my CV.
The dilemma however arises from the history of the firm.... The old partners of this firm left circa 2 years ago to join a large PERE platform and essentially took the whole team with them - the 20% IRR fund exit was after they left the firm however. Further research reveals that they left because they wanted to embark on a commercial focus while the backers of this firm wanted to remain in residential (or at least preferred residential over commercial)
Obviously I am going to clarify where the firm is heading in terms of their strategy but any opinions as to whether or not I should accept the job, if I get past the interview stage, would be much appreciated.
If they have ambitions to invest in commercial & residential, I would take the job without hesitation. However I would have a serious dilemma if their strategy in the foreseeable future revolves completely around residential.
On one hand I feel I should reject it as I don't want to be pigeonholed anymore and I should wait for the right opportunity. On the other hand I seriously hate my job right now and I am fed up of the empty promises - it has got to a point where I am seriously unhappy and it has even my general mood outside of work.
Any help/advice/opinions would be much appreciated.
Should I suck it up and just wait for the right opportunity
Or take this role and hope I can move into commercial at a later date. Perhaps this role will make me a more desirable candidate?
If you don't want to be in residential, don't take the job. Simple as that. Don't let the fact that you hate your job be too big of an influence on your job search. However, if you're actually being pidgeon-holed into your current role that could change things.
How many years of experience do you have at this Big 4? Are recruiters actually telling you, "Sorry we only meet with people with Office / Retail experience"? If that is increasingly becoming the case then I might just jump on the new job. At least you'll be on the investment side. Also, don't worry about these things until you get a job offer. It's probably going to be competitive, because there are many kids who would love to work at a multifamily owner/operator with mezz debt arm.
Thanks for the reply JsmithRE2010.
I have been in the investment team for about 2 years and prior to that, a year and a half I'm research so almost 4 years in total. I am finding that many recruiters will speak to me but when it comes to getting to a first round, the feedback is that I don't have any commercial experience. Additionally, 90 percent of the roles that come my way through recruiters are residential roles despite me telling them countless times that I don't want residential. So I guess I am more or less pigeonholed, and maybe at the point where I just jump to an investor and see if I have more luck there?
Also appreciate the fact that it will be competitive, but I feel going in with a clearer mindset will be beneficial and right now I'm slightly torn.
Four years of experience is different. I was imagining you only had a 1.5 years experience or something. Sometimes its best to take the path of least resistance, especially considering you can make a ton of money doing multifamily investments at a good firm.
If you're dead set on commercial. Get the Argus Certification, take the breaking into wall street courses, and make sure these things are on your resume. Also reach out to individuals at commercial investment firms and tell them the problems you're having. Recruiters job is to find the person who best fits the job description, but if you reach out to someone maybe they'll help you out.
You mentioned the 20%+ IRR a couple of times, so I just want to comment on that first.... Don't put too much stock in one fund's performance. It sounds like there are a lot of moving parts with that (investment/acq team already left, they could have just gotten lucky based on timing, etc.). You have to remember that money in real estate is made/lost on the buy, so if the team left and the 20% IRR was after they left, that just means that the dispo team/decision makers wanted to lock in their return knowing what they know about their cost basis/book value. The team that left might have been really good, but you can't judge how the next fund(s) will perform based on that. Take a look at the bios of the people that are still there and see if you can glean any info from that (their experience, accomplishments, pedigree, etc.).
As far as finding a gig in commercial - you would be surprised how much you can actually learn in one year. When I made the switch into the industry, I had come from 2 years+ of experience as an analyst at a F500, and it was still a steep learning curve with respect to modeling. Guys that have lateraled from IB have told me the same thing. You'll definitely be able to handle it, but just be prepared to go a lot more in depth since CRE is in some ways much simpler than business valuation but in some ways much more complex. I would ask your friend and anyone else you know well to send you some of the most complex things they've had to model (ex: ground up mixed use development, jv structures/waterfalls with multi-tiered debt, participating ground leases, etc.). This will give you an additional leg up.
If your heart is set on commercial, I would not take another resi-related job as that would create the appearance of a pattern/general interest in it on your resume, which in my opinion would make it harder to jump into CRE afterwards if you still want to do that in the future. Instead of looking into a job that needs 1+ year of exp, I would go for entry level jobs. The pay won't be as great but after a year or two of paying your dues you'll be on the track you want. Headhunters can help with this. In my experience, CRE headhunters are much more regionally focused than other financial sectors, so I'm not sure exactly what firms to point you to, but your friend in PERE should be able to help with that. Good luck!
Thanks all for your replies.
JSmithRE2010
I am based in the UK and Argus isn't very big over here unfortunately, with the exception of working out residual land values. I have tried the direct route and I did actually have some success that way, in terms of getting in the door for an interview, so I might go down that route again if this opportunity doesn't work out.
MonkeyWrench
Understood re the fund performance, what you say does make sense. The experience of the team is important to me but the firm's structure is pretty opaque, so it's something that I'll have to enquire about on the day.
In terms of modelling, I can cover most of the things you mentioned from scratch (development, income producing assets, promote, carry, multi-tiered debt) but it's hard to get this across to recruiters who may be sceptical. I have considered sending in a model as well as my CV but I'm aware in the point of view of the recipient, someone else could have built that model for me.
Once again, thanks for your replies - I'll dwell upon it and see what happens - I might not even get an offer in the end! I do have another interview lined up at a commercial PE firm so fingers crossed that goes well too
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