REPE Vs. Development Analyst/Associate Role

CREw1's picture
Rank: Senior Chimp | 23

Can anyone shed some light on the potential differences between an acquisitions analyst role at a traditional PE shop vs. an analyst role at more fully-integrated developer (Related Cos., Hines, LPC)?

I'm looking to make the move from IS to either the principal or operator side and was wondering how the two roles varied (ie. day-to-day responsibilities, work/life, comp, deal exposure, autonomy etc.).

Is one more financial modeling intensive than the other, and what's the potential career trajectory for both?

Appreciate any insight!

Comments (15)

May 17, 2019

My understanding is that development associate roles typically pay slightly less than pure REPE roles on average. Although I know Related/ Hines/ CIM/ similar firms pay $150-200k all in for development associates (usually post MSRED/ MBA). Prob can go up after a few years of being an Associate. Can't really speak to other questions you asked but other people here have experience and can weigh in.

"Life is like a song, you are supposed to dance while the music is playing."

May 17, 2019

Don't overthink it. You'd be analyzing acquisitions at one and analyzing new developments at another. Specific responsibilities, work/life, comp, etc. all depend more on the specific companies than acquisitions vs. development at the analyst role.

May 17, 2019

I disagree entirely, I've done both and they are extremely different.

REPE: more repetitions, more volume. You are underwriting deals at a slightly higher level, dialing on the investment metrics. Underwriting, analysis, research is 75% of the job.

Development: Underwriting is prob 10% of the job, the other is analyzing contracts and agreements, navigating entitlement processes, permitting, working with designers and GCs, curating updates, etc...almost more project management in a sense.

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May 17, 2019

You are correct. My point was that you are also not correct, depending on the individual company. There are development analysts that are primarily focused on underwriting. There are REPE analysts who do a lot more than underwriting.

May 21, 2019

I have also worked in both of these roles and both of the above are correct.

PERE will be much heavier in technical analysis with far more complex modeling and market research.

Development Associate can vary pretty heavily depending on the shop. Could be as simple as underwriting and researching new investments on the acquisitions side to as extensive as running the whole entitlement, construction and marketing/lease up progress. Overall these positions require a far more rounded skillset as contract review, coordination between key parties (construction, consultants, banks, partners, etc) knowledge of construction, etc all play a far more significant role than purely financial modeling.

That being said, hours, lifestyle, autonomy, opportunity to advance and cultures are all highly dependent on the specific firm and it is hard to draw high level conclusions for each industry based on a position/title.

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Most Helpful
May 21, 2019

REPE = deal volume, churn through 100 OMs per year and submit 10 offers, maybe close on 1-5. High level research and reliance on sponsors is important. Technical modeling as other have said. You will know far more about allocating capital and macro conditions than your development counterparts and have to keep things high level due to time constraints and the multitude of deals you'll be sorting through. Sourcing is usually via brokers with occasional off market, but being a master of one market is less important as many firms rely on a local sponsor for said knowledge.

Development = selective on deals, churn through 10 deals per year and maybe close on 1-2. Then you're in capital raising pitching and project management mode. You will know far more about how development works than your PE counterparts at your LP investor. You have to know every detail about your project in order to execute. Sourcing is extremely entrepreneurial and requires knowledge of market the players, and will favor those who are experts in their city.

A hybrid of the two would be your Tishman/Related/Hines/Brookfield type shops, where deals guys can play in both development and acquisitions roles.

May 24, 2019

First of all, analysts don't have to think about this too much. You analyze, that's your job.

Associate, especially post-MBA/Masters, ok more thought into this question.

Economic cycles not withstanding:

I think it best comes down to your personality. Development shops can have acquisition/development roles. You can also be Acquisitions or development only. Depends on the firm.

The question I ask you is: if you had one hour but can only do one thing, would you rather

a) analyze the new off market (ok, it's to select groups) deal that hit your inbox that has a short fuse and team wants to know whether to pursue or pass this afternoon (and you have to do a quick and dirty prelim valuation analysis and present at 2pm), or

b) attend the meeting at the architect's office to discuss floor and unit plans and set the direction for the project, not to mention you love giving input on the corridor widths and eventually recommending the right height for the wall outside the clubhouse (don't forget the extra little space for the package delivery lockers!). Mind you, you will be working on this project for 3 years.

c) or do both. Sorry this isn't a choice, but of course we would love to do it all.

But you might not have a choice:

I think the market can also "choose you." In your long career, you might be placed where the best opportunity is at the time.

Answer my question. It touches on your level of vision (physical world vs capital markets), flexibility (deal chaser vs project manager), but does not touch upon your innate skills (sales, attention to detail, analytical ability, communication ability, office politics "popularity") and the nature of the firm you work at - which are huge factors to your eventual success.

And then define what is success. Is it to learn, is it to earn (advance), is it to be good (and have a life) or great? Is it to make the firm rich (hoping you will ride on the whale)? Is it for you to impact places you love to make better?

An Acquisitions, Development, or both experiences can help you achieve that is what drives you.

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Jun 4, 2019

It's worth mentioning that development has an easier road to running deals on your own than any kind of private equity or acquisitions role. I could spend 5-10 years at a development shop and then be ready to spring out on my own if I find the right deal - development deals are MUCH easier to raise capital for than raising an acquisitions fund. I could spend that same ten years in an acquisitions focused role and have no one willing to give me money to deploy.

And since I assume that is the end goal for most, I would think that is a massive mark in the "Pro" column for development. It's an easier thing to do on a small scale.

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Jun 2, 2019

Can I ask why you want to move away from investment sales? The two career paths im interested in are IS and REPE. Is pay better at one typically?

Array

Jun 4, 2019

I started out in IS because I saw it as a great way to get my feet wet and learn many of the basic fundamentals of commercial real estate. It can be very financially rewarding if you find the right team and are able to build a strong book of business. But you'll find that a lot of times your success is out of your hands. You can be working on a deal for 8-12 months, extending DD 5 or 6 times and then have a Buyer back out right before their money goes hard because one of the major tenants filed for bankruptcy during DD and they wanted to retrade pissing of your Seller and leaving you SOL a year later with a shorter WALT, below investment grade credit, a heavily shopped deal and little to no prospects, which wouldn't be the end of the world if your compensation and livelihood wasn't heavily dependent on the commissions you make. In IS your pay is heavily dependent on the deals you close and your split of the commission you or your team makes. Top IS brokers can do very well but it takes years to build their books and their compensation is cyclical. REPE on the other hand tends to be more stable with higher starting salaries and strong bonus structures but may be more limited in overall earning potential.

Ultimately, the reason I'm making the move isn't entirely by choice. My MB is moving on to a new role in NYC outside of IS leaving my VP and I left to decide what to do next. My long-term goal is to one day have a portfolio of my own and to me the best way I see that happening is by being exposed to all aspects of ownership (i.e acquisitions, leasing, property management, asset management, development etc.). While my current position is unique in where we act as the exclusive transaction adviser for a major office and industrial developer handling all their debt and capital sourcing, dispositions (IS), and the asset management of their existing portfolio nationwide, a traditional IS role tends to be more silo'd into focusing on one asset type in a specific market with less exposure to the actual day-to-day responsibilities of owning property.

A move to REPE or development would simply be the next step in my career and hopefully will leave me closer to the end goal of becoming a well-rounded professional with a strong grasp of all aspects of the industry. I don't know if I can say one is better than the other, especially since I have no experience working in REPE at this point, but I can say that my experience thus far working in IS has left me with a strong foundation and a diverse skill set that will hopefully prove to be invaluable in the future.

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Jun 3, 2019

I have only done development.

Development is people based. Lots of meetings, conference calls, emails, and management of egos to get something done. The benefit is that it teaches you to be a great communicator and it helps you to build a big rolodex.

There is no typical day in development. One moment I am finalizing a budget, the next moment I am speaking with architects to ensure designs meet the city plan-checker's criteria. Then, 10 minutes later you learn a sewer has to get repaired, and you are forced to bid out the work by tonight (from your rolodex) so that work can get started by tomorrow morning. Also, you have a community outreach event that same night in order to ensure a neighborhood doesn't shut down one of your projects (...that you've sank months of time and money into).

...Personally, I don't think you can assign any dollar amount to the fulfillment you get when you look your family in the eye and say..."I built that."

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Jun 5, 2019
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