Big thanks to my content intern @Jason46 for putting this post together. These are the top ranked posts and discussions related to Real Estate.
Top Discussions:
- General Real Estate Discussion - originally posted by @CRE" 8/12/15 (30 comments)
Top comment (OR original post) by @socola2003" (3 silver bananas)
I did some capital raises in IB for student housing assets. I think the demand is robust for a number of reasons and the asset is stronger than traditional MF. Observe: 1-the leases are ALWAYS gauranteed by the parents 2-vacancy and cylicality is limited since lease up occurs pretty much towards end of summer and rates are locked in with little turnover until the end of the academic year; 3-location is based on proximity to campus instead of in a CBD and thus land acquisition costs may be cheaper, can also be a ground lease from the school 4-the $/sq ft margins are higher becuase you can stick more students into 1 unit who demand less free space than some elite 30something year old making $200KStudent lending doesn't really impact student housing because you are not paying down the debt while you're in school; this coupled with the gaurantees by the parents (most student debt is also gauranteed by parents fyi) I woud suspect makes student housing assets highly desirable as reflected in the cap rates
2. How will Trump's presidency impact Real Estate? - originally posted by @Apartments" 11/13/16 (43 comments)
Top comment by @bh29" (16 silver bananas)
You don't get into commercial real estate to be an office drone or wallow in middle management your whole life. The goal is to get promoted to Development Manager, get experience, and then either get promoted to management or go off on your own. No one's getting paid $200k flat to play in Excel and run Esri reports.
- The Real Estate Job Hunt - How are people doing? - originally posted by @Pocket_Rockets" 2/27/17 (113 comments)
Top comment by @Virginia Tech 4ever" (9 silver bananas)
I'm not really in the market to switch jobs, but I often (twice a month or so) look at the Linkedin, Indeed, SelectLeaders, et al postings in the D.C. area (it's a really good way to gauge the market) and there just isn't much, especially in the more senior levels. Really shows that this industry--really, real estate and finance in general--is a pyramid industry where there are lots of junior-level positions but very few senior-level positions. In other words, you'd better damn well be prepared to be an entrepreneur if you enter this business because the high paid salary jobs are few and far between.
Top Posts:
- 6 Tips for Networking Into a Commercial Real Estate Brokerage Firm - originally posted by @CRE" 7/19/13 (26 comments)
Original post by @CRE" (6 silver bananas)
6 Tips for Networking Into a Commercial Real Estate Brokerage FirmLast Night on Mad Men, Roger Sterling used a connection at the airport to “happen to bump into” a potential client. He talked to the guy, became fast friends, and got Sterling Cooper Draper Pryce into the pitch at the last minute by cultivating current relationships and forming new ones.
Not too far off from Sterling’s world of 1960’s advertising account executives, Commercial Real Estate brokerage is a career based entirely on relationships. Unlike banking, as a broker your personality and people skills matter immediately. You aren’t going to be spending a solid handful of years toiling behind the scenes and having an intimate relationship with Excel before you become client-facing.
Almost immediately you’ll be on the phone, pounding the pavement, knocking on doors, emailing everyone, networking at formal and informal events, and your relationship with other brokers in your market, both within your company and outside of it, are just as important as your relationships with clients. If your personality sucks, so will your bank account (at least at first).
Unfortunately, while hiring partners can see your GPA or the classes you took on your resume, brokerage firms cannot tell if you have the personality it takes through the hard numbers. Luckily, the skills that will help you land a client and succeed in the industry are the exact same skills that will get you the interview, and the job, in the first place. These aren’t super day events where a recruiter hires a class. Most firms are never “hiring,” but they’ll always hire if you can make them money.
Do you have what it takes? This is what you will need to succeed:
1. Be Persistent
– When you’re a broker, clients want to know that you’ll be aggressively finding them tenants, finding them space, or finding them a buyer. They want to know that you won’t rest until you’ve solved their problem. In the same way, brokerage firms need to know that you’re capable of being persistent without being annoying and they look for that perseverance while you’re trying to get a job.
I would recommend first an introductory email with your resume and your intention of finding employment. Then, every couple weeks, I would follow up by sending relevant articles, personal professional successes, and restating your interest. Closing deals in commercial real estate is a horribly long process, so while networking for six months to get a job might sound ridiculous to you, that amount of time will seem like nothing to the broker. Be patient. Be persistent.
2. Be “Old School” – In today’s age of online job applications and LinkedIn, it is surprising how many people ignore who is actually doing the hiring. Office principals, usually in their 40’s to 70’s, don’t check their LinkedIn anywhere near as much as you would want them to, and may or may not have to ask their secretary for their password even, and online filters for resume review kill more good candidates than Sirhan Sirhan.
Don’t be afraid to send snail mail. Some of my best successes in getting clients and getting this job were due to mailing hard copies of my resume, typed up letters on letterhead instead of emails, or hand written cards. The old guys in charge don’t see this very often anymore and more than you know long for the days when this was the standard. Pick up the phone and call as well. You can portray a lot of personality through your voice alone, and if you can carry a conversation on the phone, you’ll impress. Also, get your shoes shined, wear a suit, shave, and get a good haircut. This is a business.
3. Use Your Relationships- Roger Sterling leveraged a young attractive hookup to get in with a potential client. I leveraged a friend and fraternity brother to get a phone call with a managing director while the two of them were on a road trip. A few weeks ago, I again leveraged a connection I had with a company I applied to, and ultimately got rejected from, prior to this job – they are now potentially going to be one of the biggest clients my firm will have.
There is a group of people out there that think if you have help getting ahead you’re somehow less deserving of success. These people look with scorn on those who utilize successful relatives, friends, or contacts you make bumping into each other randomly or bumping uglies regularly. These people are fools. Using your connections IS a skill, one that needs to be practiced and perfected to be done effectively and effortlessly. It is a great way to get a job and it is an even better way to get clients once you have a job.
4. Get In-Person Meetings As Soon As Possible – Your entire goal of the emails and letters and phone calls should be an in-person meeting. This is exactly how the process works as a broker and the brokers you’ll be meeting with are used to this progression. It feels normal to them and it generally isn’t out of their way to take a half hour to grab coffee or lunch. This is where you get to shine.
These in-person meetings are your pitch. Your pitch book is your resume, which you should have on you, but just like in a good presentation it should simply serve as a supplement. Your goal is to get the broker to talk. Ask him his story. Ask what he does. Ask how he got into the business. Ask what he thinks is the best way for you to get into the business. As a broker, you ask questions of clients and potential clients and try to find out what they really need and what their priorities are. As a job seeker, you’re proving you can do this as you go.
5. Be Flexible – As a broker, clients are going to cancel on you, change around tours and meetings at a moment’s notice, and generally ensure that your schedule, though meticulously planned in Outlook, will never actually go as scheduled. You’ll have this same problem too with other brokers, both inside your office and at other firms, as things continuously get prioritized and re-prioritized. If an opportunity to make money comes up, you better believe that the broker will take that over coffee with a kid looking to get into the business. Be ready to be rescheduled and be gracious when it happens. If you can’t roll with the punches now, you never will later even if you get the chance.
This heading also applies in another way. When breaking in, be flexible in what you’re looking for. I networked, applied, and interviewed to be a broker. I ultimately got hired as a research analyst because I had little to no experience but they wanted to keep me in the company. I worked hard, impressed, made myself valuable, and eventually I was promoted and am in the process of moving to the front office, where I wanted to be originally. Had I turned down the low paying entry level gig, I never would have gotten to where I am. As a broker, you’re going to pitch clients who won’t let you take charge of everything right away. Sometimes you’ll start with a piece and have to prove yourself. In a career that is almost all commission, results matter more than anything. Think short term pain for long term gain.
6. Seize the Moment – Bud Fox said, “Life all comes down to a few moments.” Ultimately, you have to be ready at all times to “bag the elephant,” so to say. One of the many times you call, you’ll get through. One of the emails will get a response. When you least expect it your phone will ring and the person on the other side will be ready to go. Will you be?
No matter if the person on the other side is the managing director of the firm you’re trying to get hired at or the potential client you’ve been dying to pitch, you are always on their schedule and don’t get a re-do. When they are ready, you are ready – no questions asked.
It took me two months to get an interview via a phone call and then four and a half months to actually have the interview. A month after that, I got hired, but for a back office role instead of in brokerage like I wanted. Now, 6 months into the job, I am finally getting to where I wanted. It has taken over a year, but it was incredibly worth it.
If you get an offer for brokerage, chances are you already have what it takes. True, far more people burn out of the business than succeed in it (word is 70%-90%), but success in the industry truly is a matter of perfecting the skills you used in getting the job in the first place.
Best of luck to you.
For reference, you have my Ask Me Anything: Head Research Analyst (Commercial Real Estate), and if you have any questions about what I do day to day, there’s my Day in the Life: Commercial Real Estate Head Research Analyst .
- This is how guys are getting rich in real estate - originally posted by @DCDepository" 11/3/13 (56 comments)
Original Post by @DCDepository" (8 silver bananas)
So about 2 months ago I joined a group that does about $1 to 1.5 billion per year in commercial and commercial real estate loans. Our entire production and underwriting group is comprised of about 25 people. I've looked at a few dozen deals now that have made their way to my desk after extensive review and negotiation with upper management. While this is probably not universal (it's not even necessarily universal at my organization), there is a pattern I've begun to recognize.A lot of guys who have become mega millionaires in real estate have done the following: they start out small and they work closely with a handful of local or regional financial institutions for their depository and borrowing needs. They rarely over leverage and they act responsibly. These borrowers also tend to involve their children in the projects and get their children hooked into the institution's relationships. Over 20-30 years with these same institutions doing deal after deal these FAMILIES can do practically anything they want at much higher leverage. I've seen guys with 650 credit scores get $10 million loans at 80% LTV on spec retail construction. On Friday, we extended a $2 million unsecured line of credit to small spec real estate developer with 660 credit and $300,000 in total cash and maybe $700,000 in net worth. Why do we do this? I'm still in the process of learning why, but it seems that their past performance with the institution is their credit. I came from institutions that securitize most of their debt and therefore are radically committed to extensive documentation and personal credit documentation, so I was blown away by how little paper verification we require and how liberal we are with our funds to these clients. But since we don't securitize we can do whatever we want.
I was extremely skeptical about this type of lending until I learned that our default rate is 1.13% compared to 1.25% among our peers. Not sure what the number is, but I'd guess default loss is close to 0.1%. Turns out that lending based on relationships is actually a pretty amazing way to lend. Turns out that basically ignoring traditional credit metrics and using past performance as one's credit is remarkably accurate.
The point in all of this is, apparently the way many people are getting rich is by developing deep and long lasting family relationships with a small handful of financial institutions and always, always, always making sure to make good on their debts. Over the decades they build up a phenomenal reputation inside and outside the bank, build a lot of real estate equity and then they become kings of the castle--they come to those institutions to get practically anything they want to turn themselves from simply rich to extremely rich at little risk to the lender. I had a $3 million deal come to my desk last week. After underwriting the entire deal, we asked the guy for verification of liquid assets. The borrower told us to pound sand. Management has said it will sign off on the deal next Thursday. It's pretty remarkable
- WSO's Best Real Estate Books - originally posted by @CRE" 8/9/16 (17 silver bananas, 29 comments)
Wrapping up an interview
1. People ask about the best real estate books to read on this forum almost daily and we're happy to toss Linneman and Bowman their way, as well as all of the terrific ULI books, but @Whats the Comp" today asked specifically about non-textbook reads and it got me thinking that we should build a list of our favorites. Here are mine, in no particular order:
- "Other People's Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made" is a fantastic read, but real estate people are definitely the "bad guys" in the story. I was rooting for the "villain" the whole way.
- "The Celebration Chronicles: Life, Liberty, and the Pursuit of Property Value in Disney's New Town" is similar in that it doesn't paint developers in the best light, but it's a good read.
- "King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone" isn't about real estate really, but Blackstone is one of the biggest names in the industry so it's cool to get some insight into the company.
- "Hines: A Legacy of Quality in the Built Environment" is similar, telling the story of how Gerald Hines build one of the largest and best real estate firms in the world.
- "My Life with Charles Fraser" is similar insight into a legend. The man built most of Hilton Head, Sea Pines Plantation, Amelia Island, Kiawah Island, and Palmas del Mar resorts.
- "Threshold Resistance: The Extraordinary Career of a Luxury Retailing Pioneer" is dated at this point, because it's waaaaaay too bullish on malls (written in 2007), but it's hard to deny Taubman's influence and it's a quick, solid read. He's pretty funny.
- Day in the Life: Commercial Real Estate Broker - originally posted by @CRE" 7/31/13 (8 silver bananas/ 43 comments)
Original post by @CRE" (8 silver bananas)
Day in the Life: Commercial Real Estate BrokerEver wonder what you do as a commercial real estate broker? The truth is, it’s really hard to do a “day in the life” post for the position because no two days are alike. So, instead of just doing one, I’m going to make this a general day in the life post, from a day of mine last week, and then in the spirit of M&I do a “best day in the life” and “worst day in the life” as follow ups.
It’s been a couple months now since my last column because I got promoted to the front office and my workload immediately skyrocketed. If you forget who I am or are new to the boards, feel free to compare and contrast this to my back office “day in the life” in my former role as Head Research Analyst as well as my 6 networking tips, among others.
6:15-6:30am: Wake up, check emails, ingest caffeine. My previous column had me waking up at 5:30. I’m not sure exactly why I thought that was a good idea at the time but it definitely doesn’t happen anymore. Also, checking emails has become infinitely more tedious as I am cc’ed on every single project I am even tangentially involved in. Deleting emails on a regular basis throughout the day (or worse – reading them) has become a bit of a pastime of mine. Finally, I got to the point where I was drinking so much coffee throughout the day that I was more dehydrated than a marathon runner in the desert, so I now chug water and wake up with old-formula oxy elite pro. I’m not sure if it will help me lose weight, but it definitely helps you wake up. Down a protein/oatmeal shake as I’m running out the door.
8:00-8:30 am: I used to get into the office a lot earlier too. I suppose when you’re in research and don’t have any real responsibilities you have to impress through facetime and eagerness. Now that I can actually produce, and can impress that way, getting in super early for no real reason is rather pointless. I can’t cold call until around 9:15am anyhow, I still beat the admins, and inevitably I’m going to end up having to stay late because of something that comes up, so I’m content with my level of dedication. I catch the news highlights and post any good articles on my professional twitter, professional facebook page, and my LinkedIn. LinkedIn and Twitter are actually incredibly useful. My professional facebook page is…underwhelming.
9:15 am: By now I have enough non-FDA approved chemicals flowing through my veins that I am ready to attack the telephones. I pull up my list of prospects in Excel and start dialing any number that is listed as “Left Message.” The point is to set up meetings so that I can either sit down with a VP or a Principal and the client to talk about their current lease, the market, and options, or just skip that step entirely and schedule a tour if they are really lucky. I feel like every day is either hit or miss. I either schedule 3-4 meetings and feel like a badass or literally don’t get one positive reaction on the phone all day.
For this specific list, I am calling on behalf of the landlord for a 1.5 million square foot downtown office complex on a unique class B property that the LA landlord is convinced is class A. In comparison to other class B downtown office properties, we are killing it. Our vacancy is way below the comparative list. In comparison to class A downtown properties, however, this specific complex is (understandably) less full, so we catch heat from the landlord on a regular basis. In two years we have increased the asset value of the complex 40-50%, but apparently a solid $50 million income is lackluster in this guy’s eye.
11:00am: Today is one of those “don’t get one positive reaction” type days, so after two hours I’m done dealing with this list. It is the third time I am calling these people, after all, and I’m specifically calling the ones who didn’t answer or “weren’t available” to talk in rounds one or two. It is summer, and vacations are prevalent, but most of the serious prospects I have already sourced and we’re in contact with already.
I am finalizing the quarterly office report and continue to get into what I call “non-debates” with an admin who continues to try and overrule me. Admins are a ballsy lot and it doesn’t help that this girl is a year older than me and a year more “experienced.” She tries to correct my work or just flat out disagree with it, and while I appreciate having another set of eyes double check things before they get published, I’m rarely wrong. Taking statistics and putting them into sentence form isn’t rocket science. On top of that, 75% of the time I’m simply relaying information to her from a Principal or a VP and yet because I am the messenger she questions it. Getting respect from my bosses is easy, apparently. From self-important admins? I guess that has to be earned…
12:00pm: Lunch. I specialize in office leasing, so I’m on the office floor, and I don’t get to interact with the industrial, retail, or investment sales brokers as much. Different floors, different deals, and all that. Every now and then, I make it a point to go to lunch with them, and today it was with the industrial team. Also, one of my best friends, an older fraternity brother from college, coworker, and the guy who got me interested in the industry, announced last week that he took an amazing offer in New York starting in September. Unlike the rest of the office, I knew it was coming, but it still is rough and I want to spend as much time hanging out as possible before he leaves. The five of us discussed important matters such as dying in high speed car crashes, inheriting $100 million dollars and how we would act if we did, and whether a girl’s tits or ass was more important. (Ass is obviously the correct answer.)
1:00pm: After lunch it’s back to the phones, coffee in hand, this time for a new single-story office park in a rising suburban neighborhood. It’s an incredible complex with great market-rate access that is priced a little too high but the developer has a history of being the guy who sets the market rates so who knows. As with most developers, he has a bit of an ego, so he’s going to ask for what he wants and his buildings are quality so chances are he’ll get it. I had a lot more success this round in stirring up interest and got a meeting set up. Nothing feels better than calling a CEO or a CFO of a company and convincing them of something. I feel like a dramatically less rich and more sober Jordan Belfort.
2:00pm: Tour time. Most of my tours lately have been with someone else higher up involved where I effectively serve as the “color commentary” guy, alongside a far more detail-oriented VP or Principal. Today, however, the VP who would usually do it is on vacation until Wednesday and the Principal in charge of the complex has a prior engagement. A month ago they would have rescheduled before putting me out on my own. Today, my Principal goes “You got this?” and I naturally tell him “Yes.”
I meet this old, crotchety, fat, and outrageously successful personal injury lawyer and his two office managers in their current space, which is arguably one of the two nicest spaces in the complex. It used to be a major company’s world headquarters in the 1960’s and is still built out with that level of detail and precision. Simply gorgeous. He also signed the lease at $13.50/SF way before our firm got involved, which is a solid $6.50-$7.00 under the asking rate. We tried to throw him a bone and renew him at $18.50, but he turned it down and said we are killing him, so instead we’re showing him alternative, smaller spaces at market rates.
His first question to me is where I went to college. I tell him and he immediately says “there’s definitely a lot of binge drinking there.” My shit state school has a quite well-deserved partying reputation, but still, hearing this from a 65-year old lawyer is odd. “A lot of people die there from binge-drinking,” he continues, and now I know that he’s just fucking with me because I’m young.
“Not as many as you think,” I say with a smile and a shrug. He stares me down for a bit and we continue the tour, which included him lecturing me about how dogs are a liability waiting to happen, him visiting another floor to troll a friend (who is a partner at a massive CPA firm in our complex) about college football, him wanting to buy a newspaper, refusing to let me pay for it, and then giving the cashier a dollar and walking out when the paper was definitely around $3. I took it in stride.
“Both ownership and our firm really want to keep you here, Mr. ______,” I tell him at one point, as I was instructed. “We’re willing to work with you on price.”
“No you don’t,” he bellowed, shaking his head. “You guys are making it so hard on me.”
I tell him the landlord sets the rents and that we’re just the messenger.
“I guess that means I can’t kill you, huh?” He replies. What a guy.
All in all, he liked two out of the three spaces I showed him and his office manager/live-in-girlfriend and he disagreed on which of the two had better views. After this, I was his favorite person, and he just complained to me about how she always thinks she’s right with everything. We parted ways with a handshake and a promise to follow up. Excellent.
3:30pm: My Principal calls from his cell. He had taken his mother to the dentist and on the way back to the dentist managed to get two flat tires. Through the tirade of swear words and obscenities, I got that apparently he needs all new tires and he’s not coming back in today. Looks like I’m not saying super late either now. I tell him the tour went well and all of the weird parts of it and he laughs and says “Yeah I figured that. It’s a good experience for you though.”
4:00pm: My calendar tells me I need to follow up with an architect I cold called about a month ago. I get through to one of the two partners and he says he’s still interested but hasn’t had much of a chance to talk to his co-partner. He’ll call me back. I hope he actually does.
4:15pm: Time to switch sides, from agency/landlord rep to tenant rep, and work with a different VP on drafting a letter. This guy worked for Accenture for over a decade and is all sorts of impressive and we work well together. We are still in the process of pitching what, if we get it, will be our largest corporate services account in our branch’s history. This is significant for me especially because I am the one who set the ball in motion with company by contacting the private equity company as they were buying the corporation in question. My contact became the CFO of the company upon the acquisition and I got our team a meeting. If we get this, it will be enormous both for us and for me. The VP offers to take three of their higher ups to dinner and a baseball game along with his head Principal. Although I am on the account team, I was not included in the dinner and baseball game plan. Ugh. Excluding me, while perhaps a decent idea from the Principal’s standpoint because I’m young, may not by the right move. In all sincerity, my contact genuinely likes me.
6:00pm: Time to get out of here. Getting out at 6pm is a sweet day and the weather is awesome. I’ll be home by 7 and will be able to enjoy some hours of sunlight.
Top AMA's:
- From Real Estate Finance to Founder of Development Company - AMA - originally posted by @subsix" 1/30/17 (123 comments)
Top comment by @subsix" (12 silver bananas)
No, I don't think you need to quit your "day job" to get into the business, especially if you're younger, don't have kids, etc. That's one great thing about the business. You just need to make sure you really have the time to follow through and execute well on things.When we started, I gave myself two years to start making money, but my situation was I had (still have) a wife who worked and made good money.
Look, if you start out on your own, you need to be realistic about the sacrifices you'll probably have to make. Put together a rough budget. Then, double your projected expenses, and cut your revenue in half to get to likely REALITY.
I think many guys look at the idea of walking away from a steady job and pay and say, I'd love to try it but I just can't right now. Or, maybe in a few years, once I save up more money, etc., etc.
**I actually think the bigger risk is NOT going for it when in reality you can probably bounce back if it doesn't work out the first time. ** At how many points in your life will you have the time, stamina and lack of obligations to allow you to take the risks?
Maybe this is a generational thing - I see with our oldest kid who's now starting high school, and our friends with kids - everyone is obsessed with taking the "right" classes, enough AP Classes, enough bullshit extra-curriculars, etc., just so the can go to the "right", high-powered college, which will then enable them to get the perfect job, etc.
So you end up with a huge group of over-credentialed, pedigree-obsessed conformists who think success is all about doing things that other people will be impressed with (hint - that's one reason Wall Street loves recruiting from top colleges.) Meanwhile, there's some lower/middle class kid who went to State U, worked real summer jobs in high school / college, and is now out buying small buildings, doing his own deals, etc. Pretty soon he'll be buying bigger buildings, etc. I know some of these guys!
- Real Estate Q&A - originally posted by @RE_Banker" 12/12/10 (101 comments)
Top response by @RE_Banker" (8 silver bananas)
What jobs in the finance sector would best position you to get the experience needed to start building your own real estate portfolio? (specific firms would also be useful, if any)What would you personally consider to be 1- the best/most respected RE/RE Finance firms and 2 - the best compensated RE/RE Finance firms.
Also, what advice do you have for somebody trying to get financing for their investment properties (I know this is a really broad question but bear with me). I'm referring to both residential/commercial RE.
thanks for making this thread by the way.
The best jobs for learning how to build your own real estate portfolio will be smaller private REITs/REOCs and possibly working for one of the brokerage firms that deal smaller assets. Unless you have a few million you are going to start by buying small multi-family residential or strip malls. The skill sets you want to learn are asset and property management skills. The small REIT/REOCs will give you those skills i.e. they will teach you about finding the right tenants, setting up the leases, basic due diligence, and bank financing while the brokerage experience will give you local contacts to help you source deals. I spent a summer in my early university years working with a well know brokerage firm in the small retail team ($1-15mil assets) and basically they called their friends first to see if they wanted the assets and if not, that is when they would do wider marketing. In terms of specific firms - it depends on your location. Remember RE is very local, especially when you are dealing with smaller assets.
Best RE firms - it gets very specific on geography and sub-sector focus. In the US, the top REITs include Vornado (Diversified), Simon Property Group (Retail), Brookfield Properties (Office), ProLogis (Industrial) (this is a good list http://en.wikipedia.org/wiki/List_of_public_REITs…). In Europe there are a bunch of good REITs like Unibail-Rodamco (continent) and Land Securities (UK). In terms of REPE - Blackstone Real Estate is tops. PERE puts a list of the top 30 firms http://www.perenews.com/resources/PERE%2030/PERE_…. Some of the firms at the top are struggling like Whitehall and MSREF, but others are doing really well.
In terms of best compensated, again it is Blackstone, although Colony, AREA, Carlyle, Starwood, Beacon and Lone Star pay really well too. What is also starting to happen is that some of the big PE firms are starting to build an RE presence and I have heard rumours of pretty good comp packages. To give you an example, TPG wants to buy ING REIM and KKR was in that process as well. Apollo just bought Citi Property Investors.
I've never done this, but I'd go about it in the following way: Find an opportunity (the hard part). Model out the cash flows and get a good chunk of the DD in order. Make an appointment with the person who does commercial mortgages that are in the range you are looking for. VT 4ever might have more experience in this.
Q&A With a Buy Side Analyst at Real Estate Investment & Development Firm - originally posted by @SHB" 6/1/13 (67 comments)
Top comment by @SHB" (3 silver bananas)
Whats your background? Is there a typical background for the analysts at your firm?My background is what you would call non-traditional. I came from a non target school and spent two years doing leasing brokerage in NYC at a CBRE/JLL/CW. After about a year doing that I realized leasing brokerage was not for me and focused my efforts over the next year on continuing to do deals as a source of connections. I was lucky enough to apply for a position at my current job where the managing director had a relationship with a real estate family I had done two decent deals with. I used them as a name drop / defacto reference.
Typical background is tough to answer since my department is so small and everyone has been here for so long (besides me).
- Ask Me Anything: Head Research Analyst (Commercial Real Estate) - originally posted by @CRE" 4/23/13 (88 comments)
Top comment by @RE_Banker" (3 silver bananas)
I feel like I should chime in a bit here.CRE brokerage is becoming (or already is) a commodity business. So fees are constantly being pushed lower. When we have brokers pitch to us to sell some of our assets they are proposing fees in the 25-45bps range and we will always pick the broker with the lowest fees provided we believe they have the right rolodex. I agree with the comment that seven figure commissions are gross outliers and are only received on large portfolio brokerage deals (and you typically have the investment banks starting to circle those opps spinning a corporate angle and trying to justify higher fees for a more "complex" transaction).
I would also say that if you want to work in REIB or large opportunistic REPE then you need to have good grades from a good school etc. Even in my own firm I have noticed the shift to hiring only BB REIB analysts for our associate program, whereas previously (4-5 years ago) the background was slightly less important. And if we do hire analysts they are from targets. I would also say that I have noticed the better REITs starting to pick off REIB analysts instead of ex-brokers and valuers.
The trend I am seeing is that REPEs, REITs and other RE Investing companies are starting to become much more institutional and sophisticated and the hiring is reflecting that. i.e. it's always safer to tell your investors you hired a bunch of ex-MS RE bankers who went to a target. CRE is no longer the wild west.
I'm not trying to be harsh here, but the reality is that it is was always extremely difficult to go from regional brokerage firm to Blackstone REPE, but now it is becoming very difficult to make the intermediate steps, like going from working as a junior for the top CBRE team in the country to a MM REPE firm without an outstanding story.
Happy to answer any questions.
- AMA - Master of Real Estate - originally posted by @CRE" 6/24/17 (61 comments)
Top comment by @CRE" (7 silver bananas)
Nousernamehere:
What was your prior experience before attending the program?A little bit of everything. I was a market research analyst and an office leasing broker at a big name shop in a mid market, did multifamily operations for a family office in a mid-market, and then did acquisitions for a value-add shop in a mid market.
Nousernamehere:
At what point should someone consider getting their Masters?Earlier than I did. I think if you're going to do it, you don't want to approach it in the same way you approach a MBA. That leads me to...
Nousernamehere:
Do you feel people jump into way too soon? I've seen many especially for NYU, jump straight into the program a year after UG or even many right after. I feel hisnis crazy as you getting yourself into so much debt for such an industry specific degree. Thoughts?Nope. If I were to do it again, I would have done it as soon as I realized brokerage wasn't for me and I set my sights on development. Instead, I spent two years in semi-related roles that weren't development, and while I gained some insight, ultimately I'm just two years behind.
Getting my Master of Real Estate accomplished everything I wanted it to accomplish and then some, so don't get me wrong, but 90% of the classes were remedial for me. These programs are made up about 1/3 people like me with some experience looking to get to the next level, 1/3 people straight out of undergrad (usually with very wealthy and in-industry fathers), and 1/3 construction or architecture people trying to get to the dark side. Thus, when you're in classes, 1/3 of your class won't understand what Floor Area Ratio means or what a net lease is, and a different 1/3 won't understand how you calculate a cap rate, much less how to do it in Excel.
There is nothing wrong with any of that - school is literally a place to learn - but the 1/3 of us who knew all of that and wanted to both think of real estate on a higher level and also get deep into the weeds on certain subjects were rolling our eyes and falling asleep in class until the end of the program. Had I done the program two years sooner, a lot of that stuff would have been new to me.
As far as the degree being industry-specific, if you don't know you're a real estate person, don't do the degree. MBAs are far more versatile.
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