RE PE -> RE IB?

Reposting here as advised...

It seems like I am taking the non-traditional route compared to most people on this site, but let me know what you think...

I am currently working as an analyst at an REPE firm in NYC. To date, the experience has not met my expectations as the deal flow is slow and I do not think I am learning as much as I should (I feel like I am stagnating). Management and company structure are also not ideal and I cannot see myself being happy in my current position even if the workload were to pick up.

I am beginning to send out my resume and reach out to people in my network and while I am still open to working on the principal side if the right opportunity arises, I have taken more of an interest into the RE Banking side of the business (mainly CMBS). The problem I am seeing is that most of these IB firms have their analyst programs in full swing already and I am not sure how to break in being that I am no longer able to attend the OCRs.

Some more info about me:
- semi-target/target school
- interned at several shops while in undergrad
- 3.7 GPA
- know the technicals of RE well

Comments (19)

Feb 11, 2020
MemosFromHowardMarks:

while I am still open to working on the principal side if the right opportunity arises, I have taken more of an interest into the RE Banking side of the business (mainly CMBS).

Why?

    • 1
Feb 12, 2020
CRE:
MemosFromHowardMarks:

while I am still open to working on the principal side if the right opportunity arises, I have taken more of an interest into the RE Banking side of the business (mainly CMBS).

Why?

psh probably because the shop he's at is not actually "REPE" and it's a piece of shit sponsor

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Feb 11, 2020

I don't want to assume but if you're a new grad, it's normal to feel that your first job isn't fitting your expectations. My first job out of school was also in real estate pe, and I totally understand wanting to join a different area of the industry especially if you haven't been intellectuallt stimulated or feel you've stagnated. 6 months in i realized the environment was toxic and learning was not what I expected. I would suggest you to find a new company on the principal side that gives you what you are looking for in terms of people, culture, fit, etc. Best of luck

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  • Analyst 2 in IB - Ind
Feb 11, 2020

The grass is always greener on the other side my friend. Anyone in a real estate coverage group at an investment bank would much rather be in a buyside REPE role. The work you do you IB will literally numb your brain, not to mention you're doing said mindless work for over 70 hours a week.

If you're really set on IB, start networking and it shouldn't be that hard of a switch. RE IB isn't the most popular group, just make sure you understand the proper technicals as they are different.

Feb 11, 2020

If you're interested in BB CMBS, my buddy got a job doing just that in LA

PM me if you have any questions that I could relay to him

Most Helpful
  • Investment Analyst in PE - Other
Feb 11, 2020

Moving to cmbs would be a step backwards. Knowing a few guys who are analysts doing cmbs at BBs all they do is plug the numbers they receive into their models and make sure they hit thresholds required. There's zero thought or analysis, no strategy, it's just plug in the numbers and see if it works. If anything you may be running credit checks on the tenants on these core and stabilized bland, albeit large, deals more than anything.

Try a different repe fund before trying to make this switch, it would be boring work compared to what you're doing now.

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Funniest
  • Analyst 2 in RE - Comm
Feb 12, 2020

Wow, I'm in cmbs now and my job is essentially what you just laid out. 100% accurate

    • 3
Feb 12, 2020

Referring to the note below, can you touch on the comp in your group?

Feb 12, 2020

yeah, but they probably make more than I do

Feb 11, 2020

I don't think you understand how shitty IB is. The work in IB is far more clerical and administrative in nature than what you will do most of your time at a good REPE shop that has solid deal flow. I remember interviewing undergrads and feeling almost bad for them because they all have this clear-eyed, misguided passion about what they'll actually be doing in their day-to-day. IB is essentially a sales job and you will spend most of your time organizing 100+ document data rooms, being told to add superfluous (or just plain impossible to find) information to marketing materials and doing such until 10:00pm - midnight every night.

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Feb 12, 2020

Yeah man, you're probably not going to be intellectually stimulated working on cmbs at a big bank.

You will see the most vanilla, senior-mortgage deals and the process will be rinse, repeat as someone mentioned - receive deal, input broker underwriting into your firms template, size deal, see if metrics hit, end. Then repeat.

Try and look for a debt fund/investment group that originates across the capital stack. I think you would find that area more interesting than cmbs at a BB,

Edit: unless you are part of the securitization team, than that would be interesting for sure. But if not, you could probably find a better job elsewhere

    • 1
Feb 12, 2020

How is the securitization team different?

Feb 13, 2020

I can't really speak to it, but I know it's more in depth and personally more interesting. Like pooling up the loans, slicing them into tranches, then selling the bonds on the secondary. Idk, but to me it's a nice mix of real estate and structured finance.

Feb 12, 2020

I appreicate all of the feedback. I was not totally aware that the work at a CMBS shop could be that mind-numbing and repetitive. I have been focusing more on debt funds but I wanted to hear peoples' thoughts on the possible transition to banking.

Thank you all.

Feb 12, 2020

If you're working in equity, and you think equity analysis is repetitive and boring, chances are you will find debt fund analysis just as boring, if not more so. Underwriting debt, evening if doing it at a debt fund, is essentially 'hammering' the assumptions to completely ridiculous values to see how your position will look if everything goes wrong. There isn't much thought to making rent growth 0% and increasing TIs or slowing leasing. Rinse and repeat in every deal. Equity has more thought because you're generally more worried about operations of the asset and how the asset will actually operate, lease, etc.

In general, due to market conditions, most firms are slow on deal flow right now. Firms are being cautious and it's tough to get things done today if your firm is chasing and bidding on widely marketed deals. And equity analysis too, can get repetitive. New transaction comes in, plug in rent growth assumptions, TI/LC, and capex, hows your value look? Sensitize it. Speak with brokers. Maybe bid maybe not. Deal dies. Do it again.

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Feb 12, 2020

Agreed. Debt is more of the boring parts of underwriting (researching comps, running esoteric scenario analyses) and less of the fun parts (actually formulating a business plan, structuring partnerships).

Feb 12, 2020
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