Top Real Estate IB groups

Exits and Dealflow primarily.

I created a post a few weeks ago in the Real Estate forum with this list:

http://www.wallstreetoasis.com/forums/reib-group-locations

I meant as in what are the rankings and in terms of reputation who are the major players in NYC?

I meant as in what are the rankings and in terms of reputation who are the major players in NYC?

Top groups depends on how you slice and dice the competitive data. And each top player has a different focus due to relationships and bank capability.

In terms of fees generally: BAML JPM MS GS DB (more inconsistent)

In terms of equity: BAML MS

In terms of debt: JPM BAML DB

In terms of M&A Fees: BAML/MS/GS

But keep in mind that BAML and JPM tend to have larger groups. So if you compared fees per head, the data may look very different. Generally speaking, legacy ML has an amazing equity franchise, and now combined with BoA, it's on almost all capital market deals. JPM uses its balance sheet well and as a result commands a good share of fee wallet. MS and GS are traditionally more M&A focused. These are also slightly smaller groups.

I think this is a really important consideration. Lots of the 'deal flow' these bigger groups do is financing work, especially with REITs. If that's not what you're interested in one of the smaller groups is probably a better fit.

Real estate IB groups basically have all the same functions as other IB groups except they work for real estate clients, usually REITS but not always (public real estate holding companies, Equity Office Partners was a REIT). Real estate IB groups execute IPOs for REITS, advise on m&a, and provide financing. In terms of advice you provide valuations on properties, development projects and entire real estate portfolios (EOP), as well as provide any of the advice needed in a large take-private (proxy battles for example). If you want to go into development there are definitely transferable skills as you learn all of the finance behind real estate. All you'll be missing, and what real estate IB groups do not do, is the specific real estate stuff. They take care of the finance side of things and do not seek entitlements, negotiate with contractors or anything like that. PM me if you have any other questions

What are the pros and cons of going into the RE industry right now?

How does a stint at JLL corporate finance compare to RE IBD in a BB bank? Obviously the prestige and pay is less but at JLL the hours would be better...

Would one learn as much at JLL?

Also will it be possible to transfer from a stint at JLL to RE IBD at any BB bank?

Thanks

NYC

WF and JEF have their REIB groups in Charlotte - but I think most of the banks have REIB out of NY

NY

There is a significant REIB presence in Los Angeles and Orange County.

London generally for Europe.

I think you should focus on getting the internship first. You can't choose a group anyways until you actually get the offer.

well, if i don't know what they do, i'm not sure that I even want the internship....not going to take a banking in internship just so that I can say I do banking...

trying to learn how real estate and banking tie together

Check out the league tables. That's the best source if you want to know which REIB group does well.

I haven't checked for a while, but I think the good ones are BAML, Lazard, JP and DB.

I know BofA ML does the most REIB deals by far

To start, if its a offer at a BB in any specific group, its no different than working in any other banking group. If it wasn't to the specific group you'd just have some networking events, pref some groups and HR would decide for you. More specific to your questions:

1. As with all groups, RE has its own valuation metrics, target deals and normal clients. In RE you'll learn about cap rates, REITs and a lot about taxes. In terms of skills, you will have all the normal banking skills that you learn in all banking jobs, plus some RE specific stuff. This is the same in any group, normal valuation/comping/modeling plus whatever is necessary for your group. Contacts, well at the analyst level you don't really get "contacts". Yes you will work with RE PE firms and all that jazz just like in any IB job.

2. Normal exit opps of PE/HF plus RE specific options of RE PE (slightly more specialized). There are a lot of RE PE jobs in the city at a variety of firms that can provide a broadened exit base. Also, there are plenty of REITs who would hire you post analyst to do a corp dev job. Along with three, people tend to take exit opps similar to what they were doing, just because its easier. You will be qualified for the big PE firms and for random MM PE.

3. Normal skills are all transferable. The RE specific items are transferable across geography. People tend to stick with what they know in general, if they stay on the industry instead of product side.

4. Again, you can do other things. RE tends to include Real estate, hotels, and gaming (casinos) all in one. It's just another group.

5. Current real estate markets are a little choppy. In terms of the broad based real estate, REITs are trading fairly low right now. However, RE is very hot in terms of alternative financing (sale and leasebacks). It won't be any worse then going into any other group.

To summarize, its just another industry group. You will get RE skills, just like if you went into mining you'd get mining skills in addition to standard IB skills. If you like the firm, there is no reason to worry. (Just as an FYI, I used to do utilities, now I do mostly RE, but in a few months I may be doing something completely different, all important skills are transferable)

While I don't disagree with PowerMonkey about the skillsets you learn in RE IB, I disagree somewhat that your exit options will be broader than if you were in an "ordinary" industry group. I say this because my friends in real estate banking at the bank I worked at, as well as other friends I have across Wall Street (including what are widely considered the top-3 RE IB groups on the street) are having an incredibly difficult time transistioning to corporate PE after their 2 years as analysts. Also, oddly enough, I know many non-RE IB industry group analysts that manage to break into RE PE, even from middle market banks like Wachovia.

While an analyst in RE IB is arguably just as smart and capable as any other analyst, the fact that you aren't working day in and day out with exactly the kind of things that corporate PE looks for makes it a hinderence to you in buyside recruiting. The same can be said for any specialized group (FIG, for example). The skills are just a little too specialized to make you appeal to the broader spectrum. Not saying it cannot be done, but it is harder.

The reasoning is pretty simple. While your skillsets may be similar, if a corporate PE shop has their pick between two analysts of similar intelligence, personality, bank, etc. with only the group separating them (one is RE IB, one is any other industry group), they will go with someone who they know has more apples to apples experience (working with an LBO model, for example). The one exception to this rule that I can think of is if you advised on a deal like Blackston / EOP (I'm not even sure if that would be handled by the RE group, but I can't imagine them not being involved in some fashion). Then you might be considered an attractive candidate. Even then, it would be tough to get a look from any shop that has no interest in real estate.

I will add, though, that the one group that tends to place a little bit more frequently than others into corporate PE is MS RE. I think it has to do with the fact that their analysts do alot of their principle investing alongside advisory work, as well.

Interested as well

Update: HFF have a RE corporate finance advisory team in London with former BAML bankers that does modestly well. The guys left to form Leon Partners prior to joining HFF. They weren't particularly senior when they left, implying the RE team at BAML is pretty good in Europe.

Do you even league table bro? Why on earth would you not do cumulative?