Top Real Estate IB groups

daequan's picture
Rank: Senior Chimp | 17

(Edit: By "top" I mean Exits and Dealflow primarily). I'm in interested in the RE IB space and which banks are the best for this vertical. I know DB, MS and BAML seem to have the strongest groups but how are the other BBs JPM/Citi/Barc/CS?

There are some dated threads on this so I was hoping for new information.

Would appreciate your input. Thanks

Comments (51)

Mar 20, 2016

What do you mean by "strongest"? It's hard to comment on any groups without having a better idea of what you are looking for. Lifestyle? Exits? Prestige?

Mar 20, 2016

Exits and Dealflow primarily.

Mar 20, 2016

From an exits perspective you sometimes have to be careful with larger bank's RE groups, since there is a considerable amount of financing work involved. Depending on what deals you're staffed on/what MDs like you, you may not end up doing a lot of pure advisory at larger places with big sheets.

I can't speak to specific exits from the BBs but Evercore and Lazard both run small but very well-placing groups.

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Mar 20, 2016

Any groups among the bigger banks that would still allow someone to work on asset-level deals?

Feb 8, 2018

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Mar 23, 2016

BAML and JPM have the strongest groups and have been the leaders over the past 5 years or so. As noted above, Eastdil (which is owned by Wells Fargo and is WF's REIB group) is an exceptional firm as well. But really, you cannot go wrong with DB, GS, MS, or Citi.

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Feb 8, 2018

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

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

Feb 8, 2018

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

Feb 8, 2018

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

Best Response
Feb 8, 2018

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.

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Mar 28, 2016

Yeah agree with RE Bootcamp but it honestly depends on what type of dealflow you are looking for cap markets vs advisory deals

Mar 28, 2016

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.

Feb 8, 2018

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

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Feb 8, 2018

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

Feb 8, 2018

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

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Mar 28, 2016

@Kazimierz" @knightbanker" @RE Bootcamp" Thanks for your input. I'm interested primarily in the advisory aspect of real estate. Do you guys know how good Barclays, CS and Citi in this regard?

Feb 8, 2018

NYC

Feb 8, 2018

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

Feb 8, 2018
s2tn6at:

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

I can confirm that JEF has their REIB group in CLT.

Is there any RE IB in Chicago? If anyone has knowledge of this please let me know. Maybe someone who isn't personally familiar but has access to Cap IQ could help shed some light.

Feb 8, 2018

NY

Feb 8, 2018

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

Feb 8, 2018
TooEducatedToBeBanking:

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

Is this mostly by boutiques in these areas? ^^

Feb 8, 2018

London generally for Europe.

Feb 8, 2018

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

Feb 8, 2018

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

Feb 8, 2018

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.

Feb 8, 2018

I know BofA ML does the most REIB deals by far

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Mar 30, 2016

Moelis has done a number of impressive RE deals but the analyst program is generalist

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Feb 8, 2018

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)

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Feb 8, 2018

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.

Mar 30, 2016

Recently ran tables for this exactly and Citi is the leading M&A advisor to the real estate & lodging space over the past ~5 years. Followed by GS then BAML.

As mentioned above, financing is typically a large part of REIB, particularly at the shops with big sheets. BAML, Wells, JPM and Citi tend to lead in this capacity.

Feb 8, 2018

Interested as well

Feb 8, 2018

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.

Feb 8, 2018

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Mar 30, 2016

FactSet / North America REIT and Lodging M&A / 2011 - YTD 2016 / full credit to target and acquirer financial advisor / deals > $500MM. Data run for a specific ask.

Mar 30, 2016

If we're fact checking, SNL yields the same results. This is for $ volume - not number of deals.

Feb 8, 2018

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Mar 31, 2016

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

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Mar 30, 2016

Anyone familiar with Green Street Advisors consulting/advising group? Seems like they do some great work on REIT IPO's, advisories, and spin-offs, etc.

Apr 15, 2016

It depends on what type of exit op you're looking for. Specifically what type of role you're looking for within, say, PE.

The BB's listed above do capital markets related advisory work but don't really dive in deep on the asset level. Working in investment sales at Eastdil Secured, on the other hand, would provide you a great experience valuing properties at the asset-level but leave you with a poorer understanding of public markets and working knowledge of mergers / acquisitions.

I work at a multi-billion AUM REPE shop and I work alongside people with both backgrounds. Interestingly enough, their prior experience in IB or in brokerage (investment sales) dictates the types of deals they work on here.

One of the guys with an IB background is working on a multi-billion dollar portfolio recap and additional roll-up acquisitions. His background (from one of the top BBs you listed above) is indispensably valuable given his knowledge of M&A and the public markets, especially since doing an IPO of this asset is a probable monetization strategy.

Another top associate has an investment sales background and is currently focused on the dispositions of a few stand-alone assets, as well as managing the financing/development of a few more stand-alone assets and some acquisitions.

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Apr 2, 2016
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Apr 2, 2016
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