Real Estate IBD - Deal flow

All,

I was searching through some old threads on Real Estate IBD and was hoping someone might be able to provide some insight on this:

From what I've read, it appears as though MS and GS would be the best BB's to be at for Real Estate in terms of deal flow?

I've generally heard from friends at other BB's that groups like FIG and Real Estate, in particular, tend to limit what you can do after an analyst stint. But I've read numerous times on the board that at least with GS FIG (haven't really read that about MS FIG), that FIG doesn't end up pigeonholing people for PE/exit opportunities compared to people doing FIG at "lower-tier" BB's.

So from that, I was trying to determine if it was safe to say that the same could be said of Real Estate at MS and GS?

Would love to hear more about either group via PM if there's a chance anyone on the board has insight into either and isn't comfortable posting.

Thank you!

 

Not so much now--banks that are leading (M&A and capital markets) are those with balance sheets--think JPM and BAML. BAML leads in real estate capital markets and JPM in M&A. GS really hasn't been a contender this year, and MS is pretty much nowhere to be found. Wells has been a bit of a surprise, with Eastdil popping up in a few deals.

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Best Response

Real estate is typically comingled with lodging (hotels) and gaming (casinos) into one group at most banks. The strongest real estate, lodging & gaming groups on the street are at Deutsche Bank and JP Morgan.

DB and JPM's real estate groups are distinctively better than those at GS and MS. Secondly, while the pidgeonhole you mentioned is true, the sword goes both ways. While your opportunities will be limited, the real estate exit ops that you will focus on will have a lot less competition... Most people with other generic banking backgrounds won't be able to recruit for the real estate shops that you will be targetting.

 

Thank you both for the great insight!!!

Vancouver Canucks 2011:
Secondly, while the pidgeonhole you mentioned is true, the sword goes both ways. While your opportunities will be limited, the real estate exit ops that you will focus on will have a lot less competition... Most people with other generic banking backgrounds won't be able to recruit for the real estate shops that you will be targetting.

For someone who has an interest in real estate, but is not necessarily committed to just wanting to progress through real estate via PE, do you think someone like that (ie: me) would have to aim for JPM/DB RE groups in order to give myself the broadest opportunities in terms of other industries at PE firms (again, not to use the same cliche on the board, but like FIG at GS)?

Or is that something that not even being at the best firms for those industries would really help you with?

 
Vancouver Canucks 2011:
Real estate is typically comingled with lodging (hotels) and gaming (casinos) into one group at most banks. The strongest real estate, lodging & gaming groups on the street are at Deutsche Bank and JP Morgan.

DB and JPM's real estate groups are distinctively better than those at GS and MS. Secondly, while the pidgeonhole you mentioned is true, the sword goes both ways. While your opportunities will be limited, the real estate exit ops that you will focus on will have a lot less competition... Most people with other generic banking backgrounds won't be able to recruit for the real estate shops that you will be targetting.

I work in RE IB at a boutique. If you're looking for RE IB at a BB, the best is BAML. They have the best reputation and have the best leadership. A lot of them are legacy Merrill guys obviously and they were the ones that took the REIT world public in the 90s.

 

What are some good resources to learn more about real estate investment banking on a broad level for a beginner?

highlevelgranular:
Vancouver Canucks 2011:
Real estate is typically comingled with lodging (hotels) and gaming (casinos) into one group at most banks. The strongest real estate, lodging & gaming groups on the street are at Deutsche Bank and JP Morgan.

DB and JPM's real estate groups are distinctively better than those at GS and MS. Secondly, while the pidgeonhole you mentioned is true, the sword goes both ways. While your opportunities will be limited, the real estate exit ops that you will focus on will have a lot less competition... Most people with other generic banking backgrounds won't be able to recruit for the real estate shops that you will be targetting.

I work in RE IB at a boutique. If you're looking for RE IB at a BB, the best is BAML. They have the best reputation and have the best leadership. A lot of them are legacy Merrill guys obviously and they were the ones that took the REIT world public in the 90s.

AgainstAllOdds
 

Goldman has a pretty decent real estate M&A franchise; although they aren't on as many transactions as, say, Merrill, Wachovia, or BofA (and yes, I did just say Wachovia and BofA--applies to real estate only), the deals that Goldman does do tend to be high profile (e.g. co-advising Mills Corp along with JPMorgan).

If you want to do real estate at Goldman, however, take a look at Whitehall (Goldman's RE PE arm). Very well-respected.

 

Plenty of groups out there. If you are comparing GS RE vs. a CS sponsors type group then I would take the well recognized group. However, the GS brand name helps - you'd need atleast MS, UBS LA, CS Sponsors/LA, Top Boutique etc to justify turning it down IMO.

 

GS RE banking in SF is a very small group. They hired their first analyst not that long ago. It's a combo of a MD from MS RE, VP and associate from BofA, and one or two analysts hired from other banks. So IMO in SF GS real estate isn't as established as MS or even BofA. Yet you will have the brand with you.

 

the re groups at GS and ms are def hotshot groups. those groups would give you the best chance at exiting into more lucrative re pe careers.

so yes, they would have great exit opps.

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

the logical choice is Goldman, opens up the most doors. MS RE is on fire recently and you get a chance to work in REPE in that group as well as they do principal investing in that group, so I would definetely be interested in going there. They place well too (ie. Silverlake etc).

PWP is a risk, and would be my top choice out of 3 because I have a preference for boutique environments, but for a summer GS is the safest and most logical decision.

 
Prescott Moncrief III:
I've heard a number of great things about Morgan Stanley's RE group, but I was interested to see if anyone with knowledge of the RE investment banking industry has any specifics. Also, besides RE PE, what sort of exit opps are there? Thanks.

They are solid, but I wouldn't put them at the top of the list, insofar as Real Estate is concerned specifically. That award (IMO) goes to Merrill.

MS was one of several advisers to Blackstone on the EOP deal, and they do their fair share of capital markets transactions.

A sidenote: I have a friend at another bank who was working with MS on another recent deal (can't say which one for confidentiality purposes) and she was less than complimentary on some of the work that was being done on the MS side.

On MS' RE private equity side, MSREF is highly respected. We talk to them quite a bit.

As far as exit opps...well, we've discussed that ad nauseum on the forum. They tend to be limited (at least in my experience so far) to RE PE and RE-related hedge funds. But having contacts can help, as always.

 

BAML has been a top player in the space. Eastdil Secured consistently has some solid deal flow in RE. Banking in general should be a solid stepping stone to one day raise a fund.

Pros: If you want to learn about real estate (normally from the REIT perspective), RE IB is the way to go. Exit opps are REPE and large RE developers among other things.

Cons: Like FIG, this is a pretty niche industry. You can get pigeon-holed in the RE space. It makes transitioning to other industries rather difficult.

 

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