REIT Compensation and Other ?'s

JJP1234's picture
Rank: Baboon | 166

Hey WSO,

I am evaluating a REIT offer cannot seem to find any info online or through WSO. I am looking for help with the following questions:

What is Market Comp (Base + Bonus) for REITs?

WSO users offered the following data points on REIT comp at various levels. It's important to remember that comp varies by firm, location, deals, etc.

From current employee in industry

  • Analyst (0 - 2 years experience) - $50 - 60k base + 15% incentive
  • Sr. Analyst (3 - 5 years experience) - $75 - $90k base + 15% incentive
  • Manager (5 to 7 years experience) - $90 - $100 base + 20% incentive
  • Director (7 to 10 years experience) - $100 - $125 base + 30% incentive
  • Sr. Director (10+ years experience) - $125 - $175 base + 30% incentive

From current recruiter for industry

  • AVP level ~$125-$150k base
  • VP position compensation at the big REITs ~$150-$200k base and 25-50% bonus

The following links provide more compensation details as well:

REPE vs REIT?

How does work compare?

  • Public REITs are not big risk takers and don't pay as well as REPE.
  • REITs: It's a much more corporate environment. Larger and more bureaucratic work environment, more rules bc it's a REIT and most likely public, layers of management that you need to slowly progress through, etc. but it's probably a lot more stable and there's typically a more defined career path but it will just take longer to move up.

Do REITs offer any real upside?

  • REPE funds have carry.
  • The upside at a REIT in Texas would be in company stock and/or at the C-level.

Is REIT work more transferable than REPE?
My current REPE gig has $800mm aum vs the REIT at $3b. They do large industrial and office @ $20-50mm/deal vs where I am now at 1-3mm per deal. If you want to work for a more well known shop I would think there are more opportunities in the larger deal space.

WSO users commented that the type of the deal, rather than the size, is more important when considering if work is transferable.

REIT info:

Recommended Reading

Comments (54)

Jul 16, 2014

Why are you considering leaving if you are in REPE and find it interesting? Public REITs are not big risk takers and don't pay as well as REPE. As you mention, the upside at a REIT in Texas would be in company stock and/or at the C-level. No associate or VP at a REIT in the Southwest is going to take home a truly insane year-end bonus.

Who told you the work at a large REIT is more transferrable than the work you do at a "small" opp fund (800 is not that small for an opportunity fund, btw)? Better question is not the size of the deal but what sort of deal are you doing that's only $1 million, especially when you claim $800m under mgmt?

Jul 16, 2014

$800MM under management and $1-3MM per deal? How many freaking deals do you do?

Jul 16, 2014

$1-3mm per deal at 800m AUM? Doesn't seem to make sense. But 1-3mm deals are laughably small, so you may want to move... people aren't gonna consider that REPE experience, that's like flipping houses...

Jul 16, 2014

Without giving too much info, the company does other work in finance that has contributed to the aum. My groups allocation is closer to 250mm. Given the small deal size, the carry is not that significant and is done on a deal by deal basis. That said, I not looking for "insane" year end bonuses nor do I get then now. I would just like to know what market rates for associates/vps at REITS is.

Pymp,

Deal size is a concern. The experience of buying one-off retail centers multiple times a year @ 1-3mm a pop vs $25mm offices is likely to be viewed quite differently. My question (and you answered it) is of the deal size really matters that much.

Jul 16, 2014

Also, the 1-3mm is a per asset number. Many times they come in a larger portfolio.

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Jul 16, 2014

I started out in repe, albeit a long time ago, and still have friends at all sorts of RE investment firms (PE, REIT's, developers, finance shops etc). There may be more upside in a small PE firm and you may be able to advance within it more quickly, but I'm saying that assuming its a quality place and not just a side business/afterthought. I've never worked at a REIT but have friend who have or do and it's a much more corporate environment. Larger and more bureaucratic work environment, more rules BC it's a REIT and most likely public, layers of management that you need to slowly progress through, etc. but it's probably a lot more stable and there's typically a more defined career path but it will just take longer to move up.

Jul 16, 2014

I'm currently working an internship with an investment company that used to have REITs and it still is a large part of our culture. It sounds like you're probably joining one of the Hines Securities REITs in Houston, TX (based on aum size). The company has a great reputation in the industry, but for the most part REITs are pretty secretive about their salary benefits. The money will be better, but how much better, I don't know.

Jul 16, 2014

Dingdong: this is exactly what I have gathered. I am absolutely contemplating the stability vs where I am now. It is not a side business, but has significant stability issues that lead to both upside and downside.

Glen: thanks for the input. Why are REITs so secretive even at the analyst associate level? Do you have any data points for REIT comp?

Jul 16, 2014
JJP1234:

Glen: thanks for the input. Why are REITs so secretive even at the analyst associate level?

i don't think secretive is the right word. I think the real issue is that it's a small business, in terms of # of people. Part of the key to running a REIT is lean staff. It's not like i-banking where hordes and hordes of analysts and associates are hired every year who run around gossiping online about their base + bonus. It's just hard to track down numbers.

But again, just as a general theme, you're probably not going to be blown away by your salary or bonus at a public REIT in the Southwest, in comparison to what you'd make at Deutsche Bank in NY.

Jul 16, 2014

Also, does anyone have an idea of where REIT aums play out? Is 3b large or considered Small?

Jul 16, 2014

3b seems relatively small. We're soon to be around 17b and we're pretty large, but not that large, and we have some big JVs partners that account for a good chunk of the equity. How much of that 3b figure is the REIT in question's equity? That has a big impact on the "size" of your firm at the end of the day.

Not super sure what those guys get paid here but I'll try to figure it out. I'd guess they're around the 90-100k range salary-wise. I have no idea about the bonuses.

Many REITs are probably simiar but Associate>>Director>>AVP/VP is the hierarchy at my company and they start getting shares at Director level.

From what I've heard about our peers though, REITs all seem to be totally different in structure, pay, etc. Might not even be a good comparison.

Jul 16, 2014

My friends spread out through NYC REITs (Acquisitions analysts) are making $80-100k. Most likely can't be used as comparison to Texas REITs.

Jul 12, 2016

Is this a public of private REIT? If public, is it on an exchange or it is a "public non-traded" structure.

If your group has $250 of AUM than you have between 83 and 250 deals? Unless your acquiring portfolio's of non-performing loans and foreclosing/liquidating, I don't see how you could make money considering the transaction costs, legal fees, and corporate overhead.Whats your groups target yield range?

#GlenGarryGlenross - How did you come to the assumption that he is interviewing at one of Hines REITS based off of so little information? There are so many companies in this area with focus on industrial/office with around $3b AUM

If your a pre-mba associate at a REIT in Texas (3-5 years experience) I would expect to earn $75-120k with 20%-80% bonus. Bonus is firm dependant.

In terms of being boring, it depends on the person. REIT's typically work on core transactions, use lots of lower levered I/O loans to boost dividends (thats right no more amort tables on these), the partnership structures and waterfall splits would be much less difficult than at a REPE shop.

Jul 16, 2014

I had made an assumption (w/o any knowledge), that he was interviewing in the public non-traded sector (rather small community of firms in TX), which is where i am currently interning.

#JJP1234 NTRs (for short) definitely are more hushed about pay & benefits b/c of the smaller staffs, just as #prospie said. Pay is not quite as structured as it is in IB or even public REITs, so keeping salaries hidden is a way to calm the masses in case of anyone being over/under paid for their position.

Aug 8, 2014

I'd like to piggyback the original comment. Can some of you experts with knowledge of top NYC office REITs tell me the general starting compensation (salary and bonus) for all of:

Associate (post-MBA)
Director (had no clue Directory was below VP, not my private firm!)
AVP
VP

You can ballpark it, I just need some guidance. I have been in the private sector for a mid-sized firm ($5B AUM) for 7+ years and think that without the institutional background, I could land in any of those position. Least likely an Associate, but not all of my experience is going to be transferable so Director or AVP is very possible.

THANKS!

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Jul 12, 2016

Would be beneficial if you let us know what city you are located in as that does make a difference in comp structure

    • 1
Jul 12, 2016

Major sunbelt city. Within my companies' comp set, Avalon Bay (Northern VA) and Essex (Bay area) have a higher cost of living. AVB is who we compare ourselves to most. If HR brings up cost of living, I plan on arguing the difference is not significant if you factor in the cost of living close to the office in my city.

    • 1
Jul 12, 2016

How far out of college are you / how many years of relevant work experience? FYI, a sh*tty studio apartment close to AVB's headquarters here in Arlington runs about $1,800/month. A mediocre 1BR condo around $350,000. A tear-down house on a small lot (<=6,000 sf) about $500,000.

Jul 12, 2016
Virginia Tech 4ever:

How far out of college are you / how many years of relevant work experience? FYI, a sh*tty studio apartment close to AVB's headquarters here in Arlington runs about $1,800/month. A mediocre 1BR condo around $350,000. A tear-down house on a small lot (<=6,000 sf) about $500,000.

Yeah, new product within half a mile of their HQ is like $3.20+/PSF and even the older stuff is like $2.75/PSF... and it's in Arlington. Nothing wrong with Arlington, but it isn't where I'd want to be living in the area.

Jul 12, 2016

11 years out of college. 7 years relevant experience. Of the non relevant years, two were spent doing an MBA (T15 with very good real estate focus) and the other two doing different stuff within real estate (sales).

Not going to argue that the cost of living is higher near AVB headquarters - you guys are no doubt correct there, but it's in my best interest to minimize that difference for the sake of my argument.

Jul 12, 2016

Interested as well. Your ranges sound about right.

And actually reading your experience and creds again I probably wouldn't take less then ~180k all in even in a low COL market.

Jul 12, 2016

How long have you been at the firm and what is your current role?

Jul 12, 2016

~ 3 years. Sr. Associate in acquisitions / finance / capital markets (again, sorry but got to be vague as it's a small world).

Supposedly going to director in the restructure. However, no formal offers or announcements have been made. I am trying to get ahead of this by having some ammo for the conversation, which will probably occur in the next 10 days. No specific numbers have been thrown around yet, and my boss has a tendency to tell me what I want to hear while still being vague in the conversations we have had so far.

Jul 12, 2016

Sorry for all the questions but I think they are relevant on how your firm is looking at it. But one last question: how big of a jump are you going from where you are today to the two brackets of pay that you would assume for both sr associate / director?

I would assume someone as a new hire with 7 years of experience along with an MBA should get to the numbers you mentioned. But maybe they are reluctant to give someone a significant pay bump if you were for example going from base of $100k to $150k.

Jul 12, 2016

edit to delete

Jul 12, 2016

I've interviewed once with a REIT here in SoCal. We've talked about a few roles over the last 6mo or so. After we mutually agreed that the AM role they had available last October was not a fit, we began discussing a few positions and salary requirements. Acquisition Managers moving directly over from analyst had a range of $95k - $120k. No idea on bonus structure as it did not seem appropriate to ask. Their Director of Acq, who is a sharp dude with at least 10+ years on the institutional side, I'd be shocked if his base was below $175k. Again, no idea on bonus structure.

This current position I'm a candidate for has a Director title. But It's for leasing and dispositions. My gut tells me this salary isn't going to touch Director of Acquisitions. Maybe $125k. Bonus is probably in the 25% range.

So, with all that being said, I find Director titles today thrown around and given out too early and too often. 15 years ago, if you were a Director, you were the only director for that division. Possibly the only Director in the nation or that state. Underneath you were Sr. Associates, Associates and so on. It's different now. Today, there can be 10 directors sitting next to each other doing the same job and not managing anyone. This has diluted not the talent, but probably the salary and value of the title Director.

    • 1
Jul 12, 2016

1st year as analyst
Base: 90K
Bonus: 50%
Major REIT
Location: SF/Boston/NYC

Jul 12, 2016

To update this... Conversations were had and they are making it right. I'll still be below my estimation for director, but whatever. It's a sizable bump so I will take the win. I agree with the guy that says director titles get thrown around though.

I'm still interested in what comp structures are at other major REITs. I have a feeling that some of the other product types (like office) will be higher than MF.

Jul 12, 2016

Hey, take that title though! It doesn't hurt. Plus you get a bump in pay too. Overall a strong position to be in. Yeah, MF is a bit lighter with regard to compensation.

Jul 12, 2016

Having been under paid for 3 years you need to push them to correct that. Don't even bother with what the title they are giving you says. Titles don't mean shit, comp is what talks. Titles are given out to appease people because they are getting shafted on the compensation side. If they want to make you director tell them to pay you like one. You have the experience and the skills to survive a restructuring this means you are likely going to be taking on more work along with a new type of work. They better be paying you for this. When people ask me how to negotiate pay I tell them to pound for as much as you can possibly get.

See the link below for an idea of what comp is in the RE industry. It says an acquisitions director should be in the range of 150 to 180 with a ~40% bonus. I would try and establish this as the baseline, having survived the change you are obviously deserving of median to high level of compensation for your position.

One last thing get a detailed description of what your responsibilities will entail and find out what cross work will be involved and use that to further negotiate your compensation.

http://celassociates.com/prime/wp-content/uploads/...

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Jul 12, 2016

Hey @pisgah would you mind expounding a bit on what you said in negotiations? I'm about to go through the same thing - a low cost city, but still under-market paid for my position (1st year investment sales broker JLL/CB type firm). I know when I say I think I'm worth $X, they'll say, but we're not in NYC, we're in a secondary city. Would love any tips on how you got your win.

Jul 12, 2016

It would be good to know which city you live in

Jul 12, 2016

OP - keep in mind the 150-180 figure @heister cited is for Office. Given that you are in MF maybe discount by 10% for market but go for as much as possible. You don't want to leave money on the table.

Jul 12, 2016

The negotiations were pretty weird. They were with the CFO and he spent the majority of the time talking about himself. I kept trying to steer it back to my comp, but he was focused on telling me his personal story. There wasn't really any moral to it either. Eventually, people were gathering outside his office for his next meeting and he asked me what number I wanted. I told him 150 + 30% and he wrote it down.

Afterwards, I felt like I should have asked for more. A couple of days later, he asked me to go into his office again. He'd forgotten how much I asked for and lost the piece of paper he wrote it down on. So this time I said, 160 + 30%. I justified it saying I'd been underpaid since for 3 years, this is market rate, and others in the company at director level are making this. He didn't ask me my sources and just wrote down the number again.

Later that day my boss talked to me and said that the CFO complained that I had tried to retrade him. My boss thought that was awesome. Then my boss said that if I was making too much then I would be higher on the kill list if they do layoffs again. And some of the people at my level making too much are going away. I said that may be true, but it's not a reason to want less. Seriously, is 10-15k really how they make layoffs decisions? Our execs are making millions.

It shook out as base between 140 and 145 w/ 30% bonus. That's a pretty significant raise for me. I'm still a little under market, but I don't know if I could squeeze out any more without threatening to leave. I didn't have a ton of leverage.

    • 1
Jul 12, 2016

Well done man! Sounds like the typical CFO bullshit.

Jul 12, 2016

You should mention that the CFO is bad with numbers. Because clearly that guy is bad with time management as well.

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Jul 12, 2016
pisgah:

>Later that day my boss talked to me and said that the CFO complained that I had tried to retrade him. My boss thought that was awesome.

Chuckled at this. Gotta love real estate.

Jul 12, 2016
CRE:

pisgah:>Later that day my boss talked to me and said that the CFO complained that I had tried to retrade him. My boss thought that was awesome.

Chuckled at this. Gotta love real estate.

Ha, even though I was happy with the comp I was offered at my current position, I attempted (and succeeded) to negotiate more. The way I figured it was that if you're in a real estate job and you don't try to negotiate compensation then that would be (or should be) an immediate red flag to your employer. Probably about 15% of my job consists of negotiating.

Best Response
Jul 12, 2016

With regards to the original question, current compensation in the public multifamily REIT sector, generally, is as detailed below for investment roles, i.e. Acquisition/Disposition, Redevelopment/Asset Management and Development.

Analyst (0 - 2 years experience) - $50 - 60k base + 15% incentive
Sr. Analyst (3 - 5 years experience) - $75 - $90k base + 15% incentive
Manager (5 to 7 years experience) - $90 - $100 base + 20% incentive
Director (7 to 10 years experience) - $100 - $125 base + 30% incentive
Sr. Director (10+ years experience) - $125 - $175 base + 30% incentive
I can not comment on compensation at the Vice President+ level.

There's always exceptions and these are very broad tiers, yet also very accurate. Also, interestingly enough, the area in which you live, sans New York City, does not drive compensation benefits that notably. Generally, a Director for EQR working in Chicago, IL will have a similar compensation to a Director working for AVB in Arlington, VA.

From what you've let on, it sounds like you are in Houston working for Camden Property Trust?

    • 5
Aug 8, 2014

Nobody can provide any insight? Again, looking for ballpark figures for base and for bonus for both a Director/AVP position and a VP position at REITs with big NYC office holdings like Vornado, SLG, etc. Asset Management/portfolio management area.

Thanks!

Aug 11, 2014

My limited understanding is that base salaries are OK but bonuses are lower (15-25%). If I had to guess:
Associate: 95-105 base
Director/AVP: 110-120 base
VP: 135-150 base

Aug 12, 2014
Gene Parmesan:

My limited understanding is that base salaries are OK but bonuses are lower (15-25%). If I had to guess:

Associate: 95-105 base

Director/AVP: 110-120 base

VP: 135-150 base

I agree with the above. Bonuses can range from 10%-40% depending on the firm/role, however the 15%-25% is the average.

Analyst: 60-70K
Senior Analyst: 70-85K depending on experience

Here is a great link for compensation data:

http://celassociates.com/prime/wp-content/uploads/...

Aug 8, 2014

Thanks guys! I have asked a few of my recruiters what they thought as well, and they seem to peg it a bit higher than that but in the same neighborhood. Thanks for the link too, that is a good one. I should show it to my boss during my annual evaluation in December.

Aug 28, 2014
RE_AM123:
Gene Parmesan:

My limited understanding is that base salaries are OK but bonuses are lower (15-25%). If I had to guess:

Associate: 95-105 base

Director/AVP: 110-120 base

VP: 135-150 base

I agree with the above. Bonuses can range from 10%-40% depending on the firm/role, however the 15%-25% is the average.

Analyst: 60-70K

Senior Analyst: 70-85K depending on experience

Here is a great link for compensation data:

http://celassociates.com/prime/wp-content/uploads/...

No acquisition analyst numbers? I was speaking with a friend at a nyc repe shop earning $90k + 70-100% bonus. Looks like that's better than the all in comp for associates listed in that report. for reference, that's after 2 years of RE experience and a Masters in RE

Aug 8, 2014

Got some feedback from a few of my recruiters and the general consensus seemed to be that VP position compensation at the big REITs is probably $150-$200k base and 25-50% bonus. Did not get an exact read on AVP level but their guess was $125-$150k base.

Aug 18, 2014

For those questioning the salaries of VPs at REITs, one thing you need to realize is that the upside is ridiculous in this space. Sure IB pays more, but I have seen several VPs go on to start their own investment houses. They got capital after getting a ton of acquisition experience. There is plenty of liquidity in the CRE space right now. VPs/SVPs can go on to start their own firms pretty easily as their plenty of room for development and acquisition. In IB, the upside is either being MD or going to PE, which is still pretty good but it takes several years to move up and there is a ton of competition you'll be competing with to move up. In the real estate space, you can become your own boss pretty quickly if you play it right.