Future of Real Estate Private Equity - Active?
** I posted this topic in PE section, but IB section with most traffic, I thought I'd post it here as well **
Hi,
First, let me say that I know little to nothing about Private Equity, let alone Real Estate Private Equity. So, please bear with me I would appreciate any input from those experienced out there.
I always thought PE is where you make a transition to after 2 years IB stint. But then I came across this entry level analyst job posting from regional RE PE firm.
It may be a regional firm, but according to their portfolio, they have made investments across the nation including major cities such as NYC, Chicago, Boston, LA etc.
Job duties include a lot of financial modeling, due diligence, market research, preparing memoranda and light travel is expcted as well.
What I'm interested in finding out is...
What do you think is the future of RE PE like in the next few years?
Is commercial RE active thesedays?
Is it a good place to start your career?
Any advice/input you could give, I would greatly appreciate.
Thanks!
I've worked at a small PE shop that specializes in point of presence companies that have a strong under-lying real estate platform. I would say that the future of RE PE is bright despite the current unavailability for large scale or even one-off property financing. Lenders are now much more risk-averse and unwilling to provide the same LTV/covenant light/IO loans that were available about 12 months ago. I think that the majority of RE deals that get done in the next year or so will be completed by outside soveirgn wealth funds and international players who are flush with cash and can benefit from the weak dollar.
Feel free to PM me if you would like to discuss in greater depth. Good luck.
Thanks, junkbondswap! I PMed you.
I work at Freddie Mac as an underwriting analyst in multifamily. This is what I've seen and what I have been told by the senior people (this is not proprietary)--commercial real estate defaults are still low historically but have started to tick up. Affordable housing--outside of Freddie Mac's work--is in the tank with high default rates (keep in mind that high means like 2 tenths of a percent) and low tax credit yields. Commercial real estate, as usual, is following its age-old trend of following the residential market in a delayed cycle. Not likely that commercial will be hit as hard as residential.
Overall, atrocious time to be looking for real estate work. REITs suck, Homebuilders are barely hanging on by a thread (I've got family at senior levels with Toll Brothers), top mortgage brokers are having difficulty making loans (again, I have plenty of first-hand knowledge), residential still has a ways to fall, and commercial is beginning to see noticeable weakening. And I wouldn't be ridiculously surprised if the tax payers end up bailing out the FHA. Freddie and Fannie, however, are going to be fine. But there are some RE jobs out there (I started recently). If a job is offering, I see no reason not to take it (not everyone is doing poorly--Freddie Mac multifamily is making a killing, for example).
im currently interning at a commercial RE IB/PE and, as you would expect, deal flow is definitely weaker than it was last year. however, deals are still getting done, but of course lending has tightened up quite a bit and some areas are getting hit harder than others (land, for example).
since you're question was about the future of RE PE, i would assume that it will eventually pick up again to more recent high levels in a few years. i also agree with VA Tech...if you get a RE PE job, you should still consider it as it would still prob be a good opportunity. another thing to consider at this time may be international RE funds...
Future of Real Estate Private Equity - Good place to start a career? (Originally Posted: 06/21/2008)
Hi,
First, let me say that I know little to nothing about Private Equity, let alone Real Estate Private Equity. So, please bear with me I would appreciate any input from those experienced out there.
I always thought PE is where you make a transition to after 2 years IB stint. But then I came across this entry level analyst job posting from regional RE PE firm.
It may be a regional firm, but according to their portfolio, they have made investments across the nation including major cities such as NYC, Chicago, Boston, LA etc.
Job duties include a lot of financial modeling, due diligence, market research, preparing memoranda and light travel is expcted as well.
What I'm interested in finding out is...
What do you think is the future of RE PE like in the next few years?
Is commercial RE active thesedays?
Is it a good place to start your career?
Any advice/input you could give, I would greatly appreciate. Thanks!
People will always need RE. Land is something that is always in demand. That being said, once we begin the expansion period in our economy RE is probably going to be hot again.
Is Sperry Van Ness RE PE? My friend has an internship there and from what he says it seems like it is...
No. It's just another shitty real estate company. Mostly brokerage.
http://www.drmarkklein.blogspot.com/
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