What are the steps necessary
Hey guys,
Long time lurker, thought I'd finally post something as I am in need of some advice. I am currently in an unrelated field (software sales) and have been in the role since about six months, out of school a little under a year. I have completed both the BIWS and REFM modeling courses. I just want to know if there is any possibility of breaking into commercial development. If so, how would I get there?
I know that networking is key, but is there anything else I can do? Is my only option to go into brokerage and then make a jump from there? I majored in finance, so should I get a corporate analyst job with some random company to get experience other than sales? I don't mean to be all over the place, I'm just not sure where I should be looking to.
What do you mean you completed BIWS and REFM? There’s a ton of material in both of those. Can you build a development model as well as a value-add acquisition model from scratch? I’d keep practicing until you can.
Getting a buyside job can be incredibly hard even for people who have a year or two of full time real estate experience. Unless you have a best friend / uncle / Dad’s friend / some other connection on an acquisitions team, your best bet is to get in touch with brokerage or lending teams. Another exception would be if you have a stellar resume and you’re a brilliant student.
I think something that gets over looked is the language and thought process behind valuing real estate. If you can build a model then you likely know all of the key financial metrics, but you may not know all of the different types of leases, the demand drivers for different properties, how to determine the strengths and weaknesses of an asset etc. I’d start by googling some offering memos and reading those. I think this is the harder part to get up to speed on, and it’s probably more important than modeling.
Google UBS realty investors acquisition criteria and you’ll see what I’m talking about. What’s the difference between a power center and a super regional retail center? What’s the difference between flex space and industrial R&D (I actually don’t know this one)?
There are several posts about this and I've said the same thing in each, having been where you are. Commercial development is nearly impossible to break into without experience. I'd say your best option is definitely brokerage since any investment sales shop will hire you if you are presentable/attractive, and/or a smooth talker and can run numbers. That will give you exposure to different products which you can leverage when you apply for a job as a developer analyst. They won't care about how much you've actually sold, just that you aren't totally green when it comes to their product and modeling. There's a general disdain developers have for brokers (deserved or not - not trying to start a war), so be sure to let them know that having worked for a broker you respect what they do but really want to be on the buyside, rather than the sellside. Working as an underpaid and underappreciated assistant investment sales broker will SUCK hard, but you'll get out soon and it will be worth it. Just a plug for the WSO resume service - they're great at crafting a broker resume to meet the desires of buyside CRE shops.
I can't speak personally to starting as a corporate analyst, but I'm not sure you'd be as successful - there are some corporate analysts in my own REIT who want to move over to development but aren't even given the courtesy of applying. I guess underwriting a deal is two sides of the same buy/sellside coin, but corporate analysts don't really do that.
Good luck! Development is fun.
Thanks luv2speed and JSmithRE2010 for the responses. I've read that development is very meritocratic which I like, but is there any chance that I could be held back over the long term (getting promoted, raising money for my own deals) since I went to an extreme non-target (no one in my market went to my school)?
hahaha! I can guarantee I went to a more extreme non-target than you. That's one reason I really like development - there's no discrimination as far as school is concerned and people pride themselves on rags-to-riches stories. I don't feel I'm high enough yet to be able to "brag" about my no-name school without being laughed at, but I imagine that someday I will. The only place it would hurt is if you try to lateral to REIB shops, like GS or Blackstone since they pride themselves on a stellar academic record.
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