Transitioning out of Lending

There's a similar thread going about transitioning out of brokerage. Excellent insight in there but I didn't want to hi-jack. I am of a very similar mindset to the OP in that thread as far as what I'm looking for in a job (development seems ideal) and my question is along the same lines with regard to changing career paths; however, I'm interested in prospects moving out of the debt side.

I'm considering a job as a CRE underwriter / portfolio manager with a regional bank ($120 million in assets) in a secondary Southeastern market. I'm told the focus is primarily on MF but that they see a variety. Typical transaction size in the $15-$30 million range. My background includes four years in corporate finance (lending) so I thought this would be a logical first step into CRE without having to take a straight entry level role.

I'm curious if this is at all a viable or advisable path:
-work the debt underwriter job for a time,
-earn a part-time MBA or MSRED from a reputable school,
-hopefully develop a network in the industry,
-transition to a development role

I've tossed around the idea of a full-time MBA or MSRED to accomplish this but the combination of significant debt and, perhaps more concerning, the stress it could place on my relationship with my soon-to-be wife are making me question that option. Hence the preference to continue working and find an alternative route.

Also, if not development, would acquisitions or REPE be more reasonable given some of the analytical parallels? Or would I likely be stuck in lending unless networking really came through for me (and I can't say that's a strength of mine)? Any and all opinions would be much appreciated.

 

Just FWIW, I'm in a similar situation so I'm looking forward to seeing some of the responses here. I'm also not in a direct real estate role at the moment and have been pondering a job opportunity in real estate lending. My latest thought is that there's no reason why I'd be more competitive for a development or acquisitions role WITHOUT lending experience than I would with it. So while not my ideal landing spot, I think I'm going to take a serious look at it and then continue making strides to get into development.

 

"I'm curious if this is at all a viable or advisable path: -work the debt underwriter job for a time, -earn a part-time MBA or MSRED from a reputable school, -hopefully develop a network in the industry, -transition to a development role"

^ definitely possible, or do a few years as a lender and then leave to get a full time MRED degree once you have your bride locked in (congrats btw). I don't want to steer you wrong and say you can't go straight into development from where you're at . Maybe it's possible - I would want to hear from someone who's been at a developer(s) to respond - but from my vantage point (having gone through an MRED program and spoken with a long list of developers in my day) it seems like the direct move might be a long-shot, the reason being that development is much more about fundamental real estate (and it sounds like you don't have that background yet?), whereas you've been doing lending, now you'll just be lending on a different asset class (not to trivialize the idiosyncrasies of real estate, but you get the point)

 

You nailed it, background is in general corporate lending, with essentially no fundamental real estate experience. That's kindof my feeling as well--credit is credit to a degree, whether its real estate or what have you, and I'd be mostly at the computer. Unfortunately, as time goes on I think going back to school full-time will become less and less attractive. It's not that I'm not willing to sacrifice to get there but its a want, not a need, to make the switch and there are other things that come first. Thanks for the response!

 

Hmmm, you'll be in underwriting, not in originating, so your direct exposure to the borrowing entity or principles could be zero. Now, if you were to meet these borrowers face to face and communicate with them through the loan process, knowing folks that borrower these loan dollars on a regular basis could build a nice Rolodex.

Exit opps for those on the front lines originating in my opinion will meet the right people faster. Originating isn't for everyone though.

 

I'm not quite certain what the level of client interaction would be. I would think there'd be a good deal of communication in order to get on the same page with the borrower, clear concerns/questions, and get the right information on hand. But certainly not on the same level as the originator and to your point, that's not really my personality. It makes sense though that that's where the connections would be made and the opportunities would be had.

 
Best Response

It's hard to answer these questions out of context. Presumably if you're getting married you've got at least a few years of work experience. It doesn't need to be super detailed, but can you give us a quick synopsis of your background?

For what it's worth, I think posters on this forum get too hung up on the concepts of exit opportunities and ordered career progression. Yes, if you want to work for Blackstone you should probably go to Wharton, spend two years in BAMLs REIB group, and then profit (or whatever the kids do these days). If you're doing something less institutional in a secondary southern market, your next step after lending will probably be more dependent on who you know and what you can convince them you can do than whether you checked the right box at the last stop on your resume.

*Also I think PacNumber is spot on - you need underwriting experience to be a good loan officer, but I think a client-facing role will lend itself much more easily toward taking the next step out of lending than being a grunt in the back office of a bank crunching numbers and checking due diligence.

 

Understood--didn't want to bore everyone with the details. I have four years of straight credit analysis experience mostly in the syndicated deal space. Periodically get out and meet with clients, but primarily a back office job where I take a deep dive into the company, transaction, industry, financials, etc. Feel that I'm at a jumping off point with my current employer and also getting to the point where it's now or never to start looking at a change.

Point well taken with regard to being on the client-facing side and building contacts there. Trying to get an interview for typical banking jobs where I have already have the requisite experience is challenging enough without leveraging contacts. Got the feeling this would be the case but I think there's hope for at least some degree of networking in this role despite being more on the back office side of things. Thanks for the response.

 

Lending is a great place to start and I'm a big advocate of MRED programs.

A little more insight into your exact location would help in terms of identifying people and/or programs to network with/reach out to

Commercial Real Estate Developer
 

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