Starting in Brokerage vs. Buy-side out of undergrad

I'm currently graduating from a T20 School and looking at full-time analyst jobs with a top capital markets group (CBRE, JLL, NKF) in LA and a buy-side (dev/acquisitions) role with a T1 Developer (Tishman, Hines, TCR level) in another T1 west coast market (but not a market I have any kind of long-term interest in). I have a strong GPA and resume that would likely be competitive for a REPE10 out of school but I really like the hustle of brokerage, am very extroverted/good with people, and like that there's an opportunity to start making fees a few years in (if you perform well/network well). 

Is it fairly easy to move to a cap markets/brokerage/fee-based role following analyst experience with the T1 developer or is that uncommon/illogical route and perhaps better to just start in brokerage? Any thoughts?

Also I realize that acquisitions guys can start making carry after a few years and the equity compounds in the long term, but where in the industry can you make $300k+ in your 20's after 2-4 years in the business? I know a few D/E guys that are pulling in $500k+ within a few years and real estate securities reps that place 1031 capital (super niche) also do very well. 

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Comments (11)

May 12, 2021 - 9:37am

If you like the hustle of brokerage, think you potentially want to stay there, and can get into a top brokerage, then that's where you should start. There's absolutely no reason to go buy side first if that's not where you want to be and you have other options.

In my opinion, you can switch from one to the other either way very easily, so I don't think it will really matter in the long run.

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May 12, 2021 - 1:31pm

I gather from the post that you are just starting to play/apply, and are not actually comparing various in-hand offers?

As such, I recommend a go for all strategy. Apply and interview at all jobs you find legit interesting. Frankly, I don't think the first real job post UG is going to make or change much so long as it is a legit job in the industry. You will move/change.

You will see many more stories of sellside/brokerage --> buyside/development than the other way around. TBH, this is probably because it is far easier and more common to get a sellside/brokerage job direct from UG than buyside/dev. The buyside frankly has the luxury of hiring people with sellside experience, and thus often preference that over people direct from UG (not to sound offense, but dealing with new hires under the age of 25 is not so much fun in all honesty). 

If you land a buyside role, great! If you want to start in brokerage or i-banking and see the pace of transactions and deal heat from day 1, great! Either is awesome, just gotta get one offer you like, that's a win in this game. 

To your question about moving from buyside to sellside, this does happen, but is not the common route. I am not in the position to tell you if it has anything to do with sellside firms not liking buyside jumpers (I don't see why this would be an issue tbh). I think people who make to buyside/development, generally like it, and don't want to give up the better work-life balance (this is not a guarantee at all firms tbh) and/or the time in grade. 

Making big bucks in buyside/development has a lot more to do with time in grade, promotions, vesting of promotes, and even regular raises. Sellside is all about closings and commissions. Thus, if you exit the buyside, your clock could get a full reset if you want to jump back. Thus, it probably isn't the world's greatest career strategy. 

Good luck, just focus on landing the best offer, you really can't control this as much as you want. 

May 13, 2021 - 2:43pm

I'm a development analyst with just under 1 year experience. Interned with a local developer and was hired straight from undergrad. I can tell you that landing a role at a nationally recognized developer out of undergrad is very difficult, even with a strong GPA and a good real estate course load. Even getting a dev/acquisitions role out of ug AT ALL is difficult. A lot of kids in my program got jobs in brokerage, commercial lending, or capital markets. They're doing well but looking to bounce soon.

The answer to your question is yes, you can move over from capital markets/brokerage to buyside. You can leverage your knowledge of recent transactions in your local market and your network to get a buyside role. This advantage you'd have starting in brokerage is actually a disadvantage I've had with starting in development at 22. I came into my company only knowing how to do basic financial modeling. I was essentially useless for 6 months because of lack of experience. Thus, it will take me longer to get promoted within the company compared to someone with prior experience. Additionally, since an analyst is largely internal, haven't gotten the opportunity to meet a lot of people in the industry outside of my company.

The advantage to working in Dev/Acquisitions under age 25/26 is that you got in early and have more time to see the business. This is a big deal especially if you are confident real estate is for you and Dev/Acquisitions is your end game. By the time you're 30, you'll have 7 years of buyside experience and have your whole career ahead of you. Also IMO development is the fun part of the business- super fascinating and love going into work everyday. You also don't need to work for a "tier 1" nationally recognized company to get a good experience and build a reputation. Real estate cares much less about prestige compared to other industries, especially finance. 

May 13, 2021 - 3:45pm

IMO if you want to be a broker, go start there and start building your book now. It'll be easier when you're young and have energy and not a lot of bills to pay. Since acq/development is the goal for many who pass through this forum, you may hear some differing opinions here, but as someone who started in development and has been in the business for 6 years - I totally understand the perspective (even though I would never leave development).

The broker lifestyle is definitely a lot flashier and has the potential for major upside early on, as you said - whereas development is more about slowly building wealth over time. Just know that a lot of that upside potential comes from forces outside your control, like market circumstances and good old fashioned luck. 

May 21, 2021 - 11:52pm

I've been struggling with this too. Development is my end game so to speak. But after the last 8 months working part time at an investment sales firm, I'd really like to give brokerage a try and move in to development down the line. 

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May 22, 2021 - 12:01am

Why not work as a land broker? That way you get the benefits of brokerage (stupid money, great networking, deal exposure), while also giving you broad access to the entire development community in your city. Plus, if your devs like you, you can start rolling your commission into their deals and start clocking LP/GP type returns immediately and use that to role into your own projects once you've saved a couple mil. In the right market, land brokerage can be extremely lucrative, and will set you up for exactly what you are looking for.

  • NA in CB
May 22, 2021 - 12:50pm

Bobias

Why not work as a land broker? That way you get the benefits of brokerage (stupid money, great networking, deal exposure), while also giving you broad access to the entire development community in your city. Plus, if your devs like you, you can start rolling your commission into their deals and start clocking LP/GP type returns immediately and use that to role into your own projects once you've saved a couple mil. In the right market, land brokerage can be extremely lucrative, and will set you up for exactly what you are looking for.

How many more posts are you going to make pushing land brokerage?

May 22, 2021 - 4:41pm

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