Real Estate Investing Companies

I know this question isn't really fitting in the I-banking forum, but I was wondering how one would break into the real estate investing field (i.e. firms that buy big real estate properties like office buildings etc.).

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Comments (44)

Apr 14, 2009

One would break into that industry by starting out in CMBS Banking at an Investment Bank, most of which are now defunct.

Boy, NYC is long Real Estate Investment firms, or at least they were: Forest City Ratner, Cohen & Steers, Greystone etc.

Apr 14, 2009

I love how everyone thinks IB is the only entry point to all other industries...obviously you could do RE IB but you could also join a REIT , a real estate development company, a real estate private equity shop, etc.

Apr 14, 2009

If you're coming from undergrad, start out in a big Commercial Real Estate Services firm like CB Richard Ellis, or UGL Equis. They do corp. fin. advisory, capital markets, consulting, etc.

If you're good at that, move on to a fund. Some sort of grad. real estate/mba-finance would help.

Apr 14, 2009

Thanks. I was just curious because I hardly ever hear about big real estate investing firms... I'll look those up.

"A real entrepreneur is someone who has no safety net underneath them." - Henry Kravis

Best Response
Apr 15, 2009

Hey. Thought I'd chime in here since I work in real estate finance/development. I don't know how it happened, but my life--and friendships--is dominated by real estate--commerical finance, single family finance, commercial development, single family development, boutique investors, brokerage, etc. But I digress.

There are SOOOO many entry points into generic real estate "investing", and there are even more avenues where people end up within the general "investing" field.

Avenues of "investing":

1) REITs - these will mostly be your big money investors in office space, etc.
2) GSEs (Fannie/Freddie)
3) Banks
4) Federal government
5) Municipalities and state governments
6) General real estate corporations (CBRE, Jones Lang Lasalle)
7) "Small" real estate shops (most money to be made is here--HUGE money)
8) Developers (NRV Homes, Toll Brothers, William C. Smith)
9) Managers (Kettler, AIMCO), many of which are also REITs (AIMCO) and developers (Kettler)
10) BB, MM, and boutique investment banks
11) Private equity firms
12) Appraisal

From here, your specializations:

1) Commercial
a. Multifamily
i. Luxury
ii. General market rate
iii. Affordable
(and many other subgroups of these groups)

b. Office space
i. Class A
ii. Class B
iii. Class C

c. Industrial
(tons of subgroups)

d. Retail
(tons of subgroups)

And I'm sure there are more.

Single Family
1) Single family houses
2) Condos
3) Co-operatives
a. Luxury
b. "Ethnic"
c. General
d. Green

From here, you get into your geographic specializations. West coast affordable multifamily is very different from southeast retail. Different language, different culture, different comp.

Then you break down your groups--institutional sales, underwriting, lease negotiations, sales, etc.

Now, the question becomes, how does one generally break into these areas?

1) REITs - great grades from target schools
2) GSEs - great grades, relevant major, relevant work experience (investment banking, appraisal, NGOs, etc.)
3) Banks - great grades in college, analyst program; or relevant work experience
4) Federal government - college degree, patience
5) Municipalities and state governments - college degree, patience
6) General real estate corporations - good grades in college, luck
7) "Small" real estate shops - you've got to know the right people, luck
8) Developers - usually an MBA and relevant work experience
9) Managers - analyst programs, MBA
10) BB, MM, and boutique investment banks - great grades from target schools
11) Private equity firms - great grades from target schools
12) Appraisal - good grades, and it would help to know some people (very VERY difficult to get into commercial appraisal), LUCK

From these positions, you develop transferrable, marketable skills, network, and develop a pretty resume. Once you've done that, transferring inside the industry is doable. Most any of these paths will work early in your career. But don't stay too long--after 5 years or so, you'll be pigeonholed probably.

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Apr 15, 2009

^^is a very comprehensive list, although if you really wanted to break in I would only work on getting into a subset of that list.

I would say IB, REPE, REOCs or REITs. I think gaining the underlying financial skills and understanding occupier fundamentals and economics of real estate are the most important and those 4 avenues woud probably give you that foundation. As well, a lot of entry points are not really entry points because they require some work experience.

Apr 14, 2009

What's an REPE and REOC?

And what incomes can I expect from this line of work? (first year, and subsequent years)... I assume nothing comparable to IB... and is the culture a lot like IB in terms of work hours, pressure etc.

"A real entrepreneur is someone who has no safety net underneath them." - Henry Kravis

Apr 15, 2009

repe is real estate private equity
reoc is real estate operating co. kinda like a reit without taking advantage of tax benefits, but not having to pay out 90% of earnings as dividends.

Apr 14, 2009

Thanks RE Banker, and Virginia Tech, but do any of you guys know what salaries/comp are like at these firms? REPE/REIT/REOC?

"A real entrepreneur is someone who has no safety net underneath them." - Henry Kravis

Apr 15, 2009

Comp in real estate is usually lower than in, say, investment banking (unless, of course, you're doing RE IB). But a first year analyst in a top 100 market at a large firm could probably expect 50-70k comp, all-in with hours in the 40-60 hour range. I'm a second year and I'm doing roughly 80k and 40-45 hours, but that's a fairly large boost from year one, which was around 50k and about 50-70 hours (and my comp and hours are on the very generous/blessed side).

If I had to guess, REPE would be closer to IBD comp and hours. REITs? Geesh, it really depends on what capacity you work in. REITs run the gamut from development to management to sales to money management. I know banks pay about 45-55k for their first year analysts. Commercial appraisal comp is a joke for first years (think 40k or less), but you learn more than in any other capacity IMHO. Actually, the federal government/NGOs and the GSEs are fairly generous with their younger talent, paying in the higher range of the scale but pay garbage to their middle managers.

I hope that gives you some insight? Frankly, pay in real estate is generally much more "normal", but if you play your cards right, you can develop those skills that will allow you to make 7 figures in your 30s.

Jul 27, 2010
Virginia Tech 4ever:

Comp in real estate is usually lower than in, say, investment banking (unless, of course, you're doing RE IB). But a first year analyst in a top 100 market at a large firm could probably expect 50-70k comp, all-in with hours in the 40-60 hour range. I'm a second year and I'm doing roughly 80k and 40-45 hours, but that's a fairly large boost from year one, which was around 50k and about 50-70 hours (and my comp and hours are on the very generous/blessed side).

If I had to guess, REPE would be closer to IBD comp and hours. REITs? Geesh, it really depends on what capacity you work in. REITs run the gamut from development to management to sales to money management. I know banks pay about 45-55k for their first year analysts. Commercial appraisal comp is a joke for first years (think 40k or less), but you learn more than in any other capacity IMHO. Actually, the federal government/NGOs and the GSEs are fairly generous with their younger talent, paying in the higher range of the scale but pay garbage to their middle managers.

I hope that gives you some insight? Frankly, pay in real estate is generally much more "normal", but if you play your cards right, you can develop those skills that will allow you to make 7 figures in your 30s.

what type of re work are those figures for?

Jul 13, 2009

virgina-tech pretty much nailed it on the head.

i would add that the only side of the business right now that is hiring and will be hiring into the future is property/asset management. i would also avoid re ib, anything related to cmbs, as this side of the business has been hit hardest.

man made the money, money never made the man

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Sep 8, 2010

At top (blackstone, etc) and good MM RE-PE funds the compensation is approaching that for I-banking. The hours are way easier though. The one problem is that there are very few target schools that these firms hire analysts from. They like people from Cornell School of Hotel Management that have the Real Estate, Finance concentration (especially firms like Starwood that have a solid weight in hotels). They also like people from Wharton with concentration in RE... they like very little else. Generally speaking - they hire MBAs.

Sep 30, 2010

I'm currently pursuing my MBA at a top 20 school, and I'm hoping to land a summer internship with a repe or reit in Boston. I was a commercial broker in Boston for 4 years before going for my MBA. Although I was a broker, I do not have many contacts in the investment side of the industry, but I'm hoping some of my contacts will have contacts.

Right now I'm lacking in the modeling and valuation skills, but I plan on developing them while at school. Does anyone have any advice on how to best develop modeling skills while not actually on the job, and also any advice on how to pursue an internship and ultimately a job with a repe or reit?

Thanks.

Apr 15, 2009

banoli, in all honesty, I would look to Freddie Mac/Fannie Mae to re-start your real estate career. As a former Freddie Mac Multifamily employee, I can tell you that you fit the profile well. You can probably move up fairly quickly and learn those skills--it'll give you nice exit options in the industry.

Jul 13, 2009
Virginia Tech 4ever:

banoli, in all honesty, I would look to Freddie Mac/Fannie Mae to re-start your real estate career. As a former Freddie Mac Multifamily employee, I can tell you that you fit the profile well. You can probably move up fairly quickly and learn those skills--it'll give you nice exit options in the industry.

i always assumed that taking a job at fannie/freddie would 'pigeon-hole' you into the residential side of the real estate business. is that not the case?

man made the money, money never made the man

Apr 15, 2009

Well, yeah, if you do single-family, which, in fairness, is 95% of the company. But working in multifamily takes as much knowledge of commercial real estate (economics, markets, financing, CMBS, investors, appraisers, etc.) as any other type of CRE business. Working in office real estate might pigeon hole you there, too. But I hear what you're saying. It was my suggestion becauase I personally knew people there who had the same background as the questioner. In fact, he did better than me there.

Oct 2, 2010

Virgina Tech 4ever, Silver Bannana awarded! Nice

Oct 2, 2010

these posts are ridiculous

Sep 30, 2010

Thanks Virginia Tech. I appreciate the advice.

Oct 4, 2010

Just posted this in another thread, but the Capital IQ runs are really helpful. Maybe someone could run one for you:

Example:
Screening Criteria
1 Geographic Locations: San Francisco Area (Primary)
2 Industry Classifications: Investment Banking and Brokerage (Primary)
3 Business Description: Keyword: investment bank

Ackrell Capital, LLC

Alderwood Capital LLC

Aquilo Partners, L.P.

Architect Partners

Arena Group, LLC

Atlas Capital IB LLC

Babcock & Brown LP

Baker Pacific, Inc.

Banc of America Securities LLC

Barnard/Montague Capital Advisors

Bay Capital Partners, LLC

Berman Capital, LLC

Bowman/Hanson

Capital Agnostic Partners

Capital Bay Securities

Catapult Advisors LLC

Charles Schwab & Co. Inc.

Concordia Capital Technology Group, Inc.

D'accord Incorporated

Demeter Financial Group, LLC

E*Offering

Eagle Partners, LLC

ES-OP LLC

Financial Technology Partners LLC

First Principles Group

Fortrend International LLC

Fulcrum Securities, LLC

Garage Technology Ventures, Prior to Change in Line of Business

GCA Savvian Advisors, LLC

Gladius Capital Group, LLC

Glass, Lewis & Co., LLC

Gramercy Venture Advisors

Grove Capital Partners, LLC

GrowthPoint Technology Partners, LLC

GTK Partners

Hoefer & Arnett, Inc.

Howell Capital

IDI Associates

Instream Partners LLC

Intelligent Capital, Inc.

Jane Capital Partners LLC

JMP Securities LLC

Linden Advisors

cut off here, you get the point!

Oct 4, 2010

If one were to get an analyst job at general real estate corporate, how long and how could they break into RE IB or PE?

May 28, 2013

Hey,

I just graduated from a top-20 university and am hoping to work at a strong REIT firm in a big Southeastern city this summer, at least as an intern and then segue into a bigger role with time. I am from the area and want to get my feet wet here, but is it easy to pivot to an area like NYC?

Knowledge of one market will not help me much in an entirely different city, so is moving like starting over? How difficult is it to switch markets early on, and is it a wise move? I do plan on earning an MBA with time, so it would it be better to wait until then, go to school in NE, and THEN begin the hunt?

Thanks!

May 30, 2013
joshmo:

I just graduated from a top-20 university and am hoping to work at a strong REIT firm in a big Southeastern city this summer, at least as an intern and then segue into a bigger role with time. I am from the area and want to get my feet wet here, but is it easy to pivot to an area like NYC? Knowledge of one market will not help me much in an entirely different city, so is moving like starting over? How difficult is it to switch markets early on, and is it a wise move? I do plan on earning an MBA with time, so it would it be better to wait until then, go to school in NE, and THEN begin the hunt?

You could definitely move after getting some experience at a REIT, but it's so competitive up there that you might have to take a lesser job JUST to move to Manhattan. No reason not to try, though, and you shouldn't have to go to B school just to switch cities. But do you already have an offer at this big REIT you mention? Focus on that first.

Sep 1, 2013

interested as well, especially development

Sep 1, 2013

interested as well what are good development/investing firms?

Sep 1, 2013

Bump

I Got a dollar and a dream...

Sep 1, 2013

Would not mind hearing more on this .... bump

Sep 1, 2013

Comp at development firms suck, but the lifestyle is good. Of course, there isn't much development going on these days. The business is very much boom/bust.

Comp at more core investment vehicles (REITs, institutional REPE shops) is better, but still not great. Don't expect big bonuses, but again the lifestyle isn't bad.

Comp at the more opportunistic REPE shops (BX and the like) is better because the business is more like traditional PE (i.e., the returns and performance hurdles are higher). The lifestyle is obviously more intense. I distinctly remember hearing about Jon Gray skipping his birthday and celebrating it in his office when BX was buying EOP.

Stay tuned, though, as I'm actually working on another guest post for M&I that covers the real estate side of the business.

Sep 1, 2013

thanks for the insight, cant wait to read the guest post!

how does comp in corp pe vs. repe compare?

May 30, 2013

Please check older threads. There are giant developers who hire undergrads at target schools at the analyst level. There are small development/investment GP outfits that hire at the analyst level as well. There are large publicly traded as well as non-traded REITs who hire at the analyst level. There are big funds and small funds that hire at the analyst level. There are lots of ways to break into the 'principal' side of real estate.

At most of the above your comp will be in the 40k to 70k range coming out of college. Lifestyle is good, you will never be working IB hours unless you're at an absolute top-tier fund. Career progression is what you'd expect; you're probably not going to be at the 'MD' level at age 29, and plenty of people go back for their MBA. Comp can be great at the partner level but it's kind of all over the place.

Sep 1, 2013
prospie:

Please check older threads. There are giant developers who hire undergrads at target schools at the analyst level. There are small development/investment GP outfits that hire at the analyst level as well. There are large publicly traded as well as non-traded REITs who hire at the analyst level. There are big funds and small funds that hire at the analyst level. There are lots of ways to break into the 'principal' side of real estate.

At most of the above your comp will be in the 40k to 70k range coming out of college. Lifestyle is good, you will never be working IB hours unless you're at an absolute top-tier fund. Career progression is what you'd expect; you're probably not going to be at the 'MD' level at age 29, and plenty of people go back for their MBA. Comp can be great at the partner level but it's kind of all over the place.

Do you know why they go back for their MBA if they are already at the "MD" level?

Sep 1, 2013

How is the pay and promotion progression in the above jobs at the bigger firms?

May 30, 2013
JimboUSC:

How is the pay and promotion progression in the above jobs at the bigger firms?

Depends what you mean by "the bigger firms," because that could mean so many things. At a reputable opp fund, for example, I'd expect pay/progression to be pretty close to that of a similarly sized LBO fund.

Sep 1, 2013

By Bigger firm I mean like JLL/Brookfield/Trammel Crowe

And what would the pay/progression be like at a LBO fund/?

May 30, 2013
JimboUSC:

By Bigger firm I mean like JLL/Brookfield/Trammel Crowe

And what would the pay/progression be like at a LBO fund/?

I wouldn't expect the entry-level pay to be very impressive at any of those firms, although Brookfield might pay pretty well because they are a large, prestigious, well-capitalized investor based in NYC. NYC being a key factor there.

Check older threads for pay/progression at an LBO/PE fund. All I was trying to say is that an opportunistic real estate fund could potentially pay extremely well. Another way you could probably make great money, if the market comes back to life, is CMBS.

To the other poster, the REOCs wouldn't pay much better either. Just because it's structured that way doesn't mean it's not just another real estate company.

Sep 1, 2013

bump

Sep 1, 2013

.

Sep 1, 2013

what about REOCs (or real estate investment and operating companies) jqbuyside?

Sep 1, 2013

bump!

Sep 1, 2013
Sep 1, 2013