Real Estate IB Groups

Hi all,

I have been a long time reader of the site but have never posted before. I recently received offers for REIB groups at a number of the BB banks; and am having a tough time choosing which one because I did not summer in any of the groups (Went the global volunteer route last summer). I would prefer not to name the specific banks because some of them only had 1 or 2 spots across IB and it would be very clear who I am. For the sake of this you can assume all of the major RE banks. (MS, GS, BAML, JPM, DB) I have used the search button but the info seemed pretty dated.

I was wondering which banks have the stronger groups in terms of deal flow and analyst experience?

 
Best Response

I'm familiar with MS, GS and BAML. Don't know too much about JPM/DB.

Overall, if it's any of these 3 I would go with Morgan Stanley. It's got the prestige and Morgan Stanley's real estate private equity fund (MSREI) hires a lot of analysts from MS REIB. In addition I've heard a lot of the major REPEs try to poach guys from MS REIB / MSREF. I believe they're the 2nd largest REPE behind Blackstone. Someone please correct if I'm wrong

Goldman Sachs has solid exit ops internally and externally. Goldman Sachs Real Estate Principal Investment Area (REPIA) is the 4th or 5th largest REPE.

Bank of America Merrill Lynch REIB is solid. Smaller internal REPE, but still top 20-30. Solid exit ops. Seen a couple guys with top REPEs/RE developers.

Rank: 1. MS/BAML 2. GS

I dunno where JPM/DB would rank. Maybe above/below GS.

Robert Clayton Dean: What is happening? Brill: I blew up the building. Robert Clayton Dean: Why? Brill: Because you made a phone call.
 
goodL1fe:

I'm familiar with MS, GS and BAML. Don't know too much about JPM/DB.

Overall, if it's any of these 3 I would go with Morgan Stanley. It's got the prestige and Morgan Stanley's real estate private equity fund (MSREI) hires a lot of analysts from MS REIB. In addition I've heard a lot of the major REPEs try to poach guys from MS REIB / MSREF. I believe they're the 2nd largest REPE behind Blackstone. Someone please correct if I'm wrong

Goldman Sachs has solid exit ops internally and externally. Goldman Sachs Real Estate Principal Investment Area (REPIA) is the 4th or 5th largest REPE.

Bank of America Merrill Lynch REIB is solid. Smaller internal REPE, but still top 20-30. Solid exit ops. Seen a couple guys with top REPEs/RE developers.

Rank:
1. MS/BAML
2. GS

I dunno where JPM/DB would rank. Maybe above/below GS.

Good advice overall, but the REPE sizes may be a little dated. This post from last week showed the top 50 REPE's by capital raised:

//www.wallstreetoasis.com/forums/the-pere-top-50-private-equity-real-esta…

GS is 8th MS is 11th BAML is 22nd

 
EarLoeb:

MS's real estate group is now split from its real estate PE fund..

MSREI still hires a lot of guys from MS REIB. They're up there with Blackstone, Tishman and Colony for largest REPE.

Robert Clayton Dean: What is happening? Brill: I blew up the building. Robert Clayton Dean: Why? Brill: Because you made a phone call.
 

@watdo, the numbers posted in the thread is capital raised for 2013. The reason MS and GS are so low this year is because they both raised a lot of money in 2012 & 2011. Hence, they didn't need to raise that much money (in comparison with other REPEs) for 2013.

http://llenrock.com/blog/top-10-private-equity-real-estate-firms-of-201…

Blackstone just kills it year after year.

Here's the top 10 fundraisers from 2007 - 2012. http://llenrock.com/blog/top-10-cre-fundraisers/

Robert Clayton Dean: What is happening? Brill: I blew up the building. Robert Clayton Dean: Why? Brill: Because you made a phone call.
 

PERE uses fundraising from the last 5 years to make its rankings. The reason a lot of those firms fell is because they're fundraising took a big hit after 2007. The most recent rankings take into account all fundraising from 2008-2012. "The elimination of funds closed in 2007 from this year’s ranking has caused the biggest reshuffling of top firms in recent memory"

http://www.perenews.com/Pages.aspx?pageID=3975

 

BofA and Citi likely have the balance sheet to actually lend to real estate developers while a bank like Goldman is going to focus more on the advisory end and less on the actual lending from my understanding. I'm not in RE but that's my impression. Also certain banks will just fire you if you try to recruit at other shops so it'll make things alot easier if you go to a bank that accepts the fact that you're only going to be around for 2 years and will support your exit versus you having to sneak around.

 

I work in REIB. If you're interested in bulge bracket, go with BAML. Not the best environment, but they are involved in everything and widely respected. Morgan Stanley's platform is in decline. They have lost a ton of senior mgmt and at the junior level you have to pick day one whether to be investing (with fewer and fewer dollars coming in the door) or banking. For advisory, several of the elites (lazard, evercore, moelis) have very strong practices with small teams that are great places for junior bankers. just consider the general culture of the firm as that trickles down

 

Look at the data, decide for yourself to get a feel for the top players (top 5 in order of total proceeds raised)

REIT Preferred Stock ($25 Par Offerings) 2013: WFS, BAML, MS, Citi, Raymond James Public High Grade REIT Bonds 2013: JP, WFS, baml, Citi, MS REIT Loan Syndication: BAML, WFS, JP, KeyBank, PNC Real Estate Equity Bookrun League Tables 2013: baml, WFS, Citi, JP, MS Real Estate M&A: BAML, WFS, Citi, MS, JP

Looks like BAML/eastdil/citi are consistently up there. Can't go too wrong with any of these places. Congrats.

Haters gonna hate
 

Look at the data, decide for yourself to get a feel for the top players (top 5 in order of total proceeds raised)

REIT Preferred Stock ($25 Par Offerings) 2013: WFS, BAML, MS, Citi, Raymond James Public High Grade REIT Bonds 2013: JP, WFS, baml, Citi, MS REIT Loan Syndication: BAML, WFS, JP, KeyBank, PNC Real Estate Equity Bookrun League Tables 2013: baml, WFS, Citi, JP, MS Real Estate M&A: BAML, WFS, Citi, MS, JP (by # of deals)

Looks like baml/eastdil/citi are consistently up there. Can't go too wrong with any of these places. Congrats.

Haters gonna hate
 
GutShot:
Morgan in my opinion has one of the strongest RE practices

on the contrary, msref has one of the worst performing principal investing re practices.

the real reason you dont hear of reib nowaday is because theyre not doing deals. the business is just about dead.

i would recommend looking into large brokerage firms that have institutional sales practices. ive been interviewing with investment brokers and some are busy, unlike most principal investors who have capital but are sitting on the sidelines. it makes sense since brokers are the middlemen in transactions. i will probably make the switch bc i want to work on a hi volume of transactions. and the group i work for hasnt closed much since i started.

i wish i could give you some advice or some better news. i know youre stuck on reib, but the business has contracted so much. youre basically looking for opportunities in a tiny slice of a very big pie.

--- man made the money, money never made the man
 

It's tough to tell. Not many advisory deals are getting done anywhere in real estate. There are a bunch of single asset deals being handled by brokerage firms.

With that said, I think UBS is advising GGP on their restructuring (although I'm not 100% sure). BAML has a pretty big team in London as does UBS. Morgan Stanley has traditionally had a strong team both in US and Europe, but there are rumours that they are looking to sell their MSREF biz.

 
International Pymp:
this makes me think I should stay here in China (I'm in RE PE here)... is CRE really THAT terrible in the U.S. still?

Its hard to fathom a totally inactive market when you're "out (far) east"...

in general, no. the mkt segment that is really doing bad is the mkt segment that reib was involved in (the sexy deals, hotels, hi riase a class office, portfolio deals, hi risk financing, etc).

different mkt segments are performing differently.

--- man made the money, money never made the man
 

Let me clarify my point. In terms of experience for a junior banker (analyst/associate level), Morgan Stanley RE offers the best mix of experience and exit opportunities. IB analysts get to rotate in their PE arm, I have not heard of other BBs offering this.

If you mean based on "aggregate fees generated by the RE group" you can find that on league tables. I assumed the poster was the typical WSO college student, and thus inferred their question haha.

 
GutShot:
Let me clarify my point. In terms of experience for a junior banker (analyst/associate level), Morgan Stanley RE offers the best mix of experience and exit opportunities. IB analysts get to rotate in their PE arm, I have not heard of other BBs offering this.

and thats why msref sucks. they are ib professionals trying to make a profit in real estate; they are not real estate professionals.

--- man made the money, money never made the man
 

As far as BB's go, BAML, DB, and MS are all really strong right now. I know that DB gained a ton of market share in the industry over the last few years (in particular in gaming and lodging) and is still gaining market share with other REITS. BAML has such an enormous balance sheet they have been able to build a lot of relationships from lending etc. MS has always been pretty strong i believe.

 

"How do you rank the following firms or do you have a general sense of whether or not it is a decent firm to work at? Eastdil Secured, HFF, Morgan Stanley, Goldman Sachs, Carlton Group. " Personally I'd say MS and GS above the others, hands down, for obvious reasons - You said you already understand the difference between corporate-level investment banking work and property-level dealmaking.

"What is a reasonable split on those firms that are offering commissions for new origination and placement? " I have seen 50% at one of the name-brand/national brokerage houses, but it was a pretty lean operation, more old-school, a true brokerage. So it was a little different from, say, HFF.

 

Bear in mind that JLL is a real estate brokerage firm, and though many of its ilk (CBRE, Cushman, etc.) may offer services branded as "RE IB / Capital Markets" it is not, in fact, the same thing or viewed the same way as working in the real estate group at an investment bank.

Among investment banks, the historical leader has traditionally been Merrill Lynch (which is now, of course, BofA) by a long shot. Their lead has narrowed in recent years. Deutsche, Citi, JPM, and Goldman also have well-regarded groups. Morgan Stanley's real estate analysts get to work in both banking and PE (MSREF), which has historically made that a very attractive group at the analyst level.

Eastdil Secured is a bit of an exception that I've mentioned in prior posts. It is a subsidiary of Wells Fargo that operates semi-independently. While their bread and butter is as an asset sales and debt placement broker (like JLL, CBRE, etc.) they do no property management or leasing and are sort of a hybrid between banking and brokerage. Of the brokerage shops, I feel they are the most respected.

 

If you're going to be at a brokerage firm than I'd say Eastdil is pretty solid. Very strong deal flow.

But as mentioned above, you would probably be best off at GS, MS, BAML, etc... Lazard also deserves honorable mention on that list, though it's not a BB they've worked on some of the biggest RE deals and you'll see former lazard RE bankers at Blackstone and GS REPIA and other top buyside places

 

Thank you for all the suggestions. Any advice on getting into the BB firms at this point in the game? I've searched their websites and haven't seen postings for REIB or really any RE finance positions. Alumni? Not too many in RE. Cold networking?

 

I'm not sure what your "point in the game is," but it sounds like you have already graduated with your JD/MBA. If you've been working in Big Law, there is some precedent for making a move over to IBD, but it's pretty rare. By and large, recruiting into investment banking occurs out of college to an analyst program, and then out of an MBA to an associate program.

I have to disagree with the prior post that suggests your T25 credentials will offer you good shot of placement into sizeable PERE or REIB. Brokerage is probably one of your better alternatives if you are eager to get into real estate.

 

Thanks for the response^

re-ib-ny:
I have to disagree with the prior post that suggests your T25 credentials will offer you good shot of placement into sizeable PERE or REIB. Brokerage is probably one of your better alternatives if you are eager to get into real estate.

For those who probably can't get a position at a sizeable PERE firm or REIB, two common entry level positions in real estate seem to be capital markets at a big brokerage or an analyst position at a small PERE/PEAM/REIT firm. If someone told you their goal was eventually to work at one of the bigger PERE/PEAM shops, which position would you direct them towards and why? (anyone can chime in on this, just quoted re-ib because his post prompted my question.)

 

Yes, your assumption is correct. I am fresh out of grad school and have no experience in biglaw. What I do have is decent RE experience under my belt. I have done RE hard money lending through brokers, I've been the buyer in short sales, I'm currently filing a complaint against BoA for a short sale gone bad, I've been a buyer at REDC auctions in Vegas and rented them out. I've also sold them and carried seller-financed notes. It's primarily residential, but I've spent my life in real estate and am not new to the investments game. I have plenty of stories for interviews. Does this experience primarily in residential real estate add significant value and translate into valid experience for REIB or REPE?

 

Qui aut id ullam omnis atque molestias quaerat. Repellendus sunt facere mollitia laborum.

Dolor eum odit voluptas alias harum doloribus. Rerum sit in sunt cum tenetur quidem rem. Ipsum delectus debitis et mollitia esse assumenda adipisci dolorum. Mollitia commodi nisi perferendis soluta consectetur sed velit. Molestiae velit et nulla vel dolorum. Reprehenderit quo est odio hic totam quo molestiae. Libero velit aut quia minus id ad sit.

Praesentium laboriosam nisi impedit voluptate earum alias ut. Natus harum ea vel recusandae amet tempore quibusdam.

 

Omnis minus cum aut. Voluptas iure est sunt deleniti labore recusandae.

Eligendi inventore dicta voluptatibus similique odio illo iusto. Vero fugiat voluptatem minima et totam optio ut.

Numquam consectetur illo velit nobis neque pariatur est. Sit dolorem tempore consequuntur quia est. Consequatur et corrupti unde. Et numquam voluptatem suscipit. Dignissimos accusantium dolorem in ratione quisquam molestiae.

Fugiat voluptatibus debitis quis vel ut. Numquam in repudiandae nesciunt odit minima libero. Natus culpa dolor omnis neque consequatur. Sunt exercitationem quod rerum hic.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Betsy Massar's picture
Betsy Massar
99.0
3
Secyh62's picture
Secyh62
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
DrApeman's picture
DrApeman
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
kanon's picture
kanon
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”