What CRE sector can you make the most money in?

Intern in RE - Comm

I'm just super curious on what sectors within CRE make the most money.

Can someone provide a list of what sectors make the most money and why?

Thank you,
Intern

Comments (18)

Dec 3, 2019

Doesn't really work that way, intern. All of the people at the top make great money. Getting to the top is very difficult and requires a tremendous amount of risk, entrepreneurship, and luck/timing.

For you, the answer to "where can I make the money money" will be where your skills and interests best coincide.

    • 4
    • 1
Dec 3, 2019

The sector that the given individual finds most intriguing.

Funniest
Dec 3, 2019

Being an appraiser. Get that license and never look back!

    • 9
Dec 3, 2019

Over land sales?

    • 2
Dec 4, 2019

It really all depends on what market you work in. When I was previously working at CBRE I remember one of our VAS executives visiting from LA joking about how "everything in Texas is big except the fees." I don't work in Texas (Hawaii is my market), but the point he was making is that assignment fees were significantly different from market to market. CRE Appraisers in expensive markets such as Hawaii, SF, and NYC are gonna make more than appraisers in Atlanta or Montana. In my market most competent appraisers with an MAI will bill about a range from $150 - $400 per hour on average depending on the scope of work.

Point i'm trying to make is that getting both the CGA and the MAI is a huge commitment that most people aren't willing to make. Unless the fees in your market are high, you're probably better off being a broker in most markets. Plus taking all the appraisal classes can be expensive if you're not working for a shop like CBRE, JLL, C&W, or Colliers. Going the appraiser route is only worthwhile if you're committed for the long-term.

Dec 5, 2019

This is spot on.

Currently reside in a high fee market such as Hawaii, SF, and NYC. Work at a small commercial shop (4 to 5 people) with most having the CGA and MAI. Lowest earning appraiser at this shop brings in around 115k a year and the senior guy brings in around 350k. This is after fee splits with the principal. They are all working around 40 hours a week.

However, this is not the norm for the field. I have a family member that has been in the appraisal sector 40+ years. So I have seen the good and the bad. In my personal experience, once you enter the appraisal sector it can be very difficult to make your way out. So like Guywithtoaster said, make sure you are committed for the long-term.

  • Associate 1 in IB - Ind
Dec 3, 2019

To be the first to actually answer your question, I would say that on average, REPE probably pays the best, followed by REIB (they make standardized IB pay), and then maybe debt funds (could be before REIB, not too much out there about debt fund players). CMBS guy, developers, and brokers can do decently, but again on average, they might not do as well as the previous categories.

You can argue crazy ceilings or floors all you want, but the fact is, most people will probably fall close to the average. This is coming from a guy who always had a star studded resume just to end up mediocre in the end :(.

    • 1
    • 1
Dec 4, 2019
Associate 1 in IB - Ind:

To be the first to actually answer your question, I would say that on average, REPE probably pays the best, followed by REIB (they make standardized IB pay), and then maybe debt funds (could be before REIB, not too much out there about debt fund players). CMBS guys, developers, and brokers can do decently, but again on average, they don't.

This really only applies to first jobs. Developer comp grows rapidly as you move up.

    • 1
Dec 4, 2019

Every billionaire in RE is a developer, yet it's lumped into the "can do decent but not likely" category - you gotta love the flawless commentary that finds its way into the RE threads.

    • 1
Dec 3, 2019

be lazier, you can't

    • 2
Most Helpful
Dec 4, 2019

You can make the most in Development but it's the riskiest. The ceiling is extremely high but it's also the most cyclical so you make nothing and/or get laid off during a downturn.

Brokerage is second, which I put above REPE just because commissions can be far greater than any salary and you can be a broker in any market. It's also highly cyclical and competitive. Several types of brokers too. In my opinion IS brokers make the most followed by debt/equity placement, corporate services then leasing. You won't make much starting out unless you get lucky or work for a great team, but you can make millions at the top. There's also a saying in brokerage that 20% of the people make 80% of the money. I'd say this is entirely true based on my time at CBRE.

REPE probably has the highest salary/bonus potential but it's also one of the hardest to break into. If you're in NYC I'd also lump IB/CMBS/REITs in there as well. Your work life balance will suck.
Next step down would be other institutional investors and commercial banks. Think life companies, pension funds and lending groups at large banks. Great salaries/bonus structures and probably the best job security in the business. Also better work life balance than REPE.
The three main job areas with institutional investors from highest to lowest potential IMO, Acquisition/Origination, Asset Management and Accounting/Finance. Don't go into research, it sucks and nobody listens to you.

Next on my list is CRE Appraisal with a big firm (CBRE, Cushman, Newmark, Colliers) I did this for several years after UG and was making over $100K after the first year. You'll top out at $200-$250K in a secondary market, maybe $300-$500k in a coastal market. Best work life balance other than brokerage but much less cyclical. My income dropped by about 30% the first year of the downturn but bounced back once all the foreclosure work started coming through the pipeline. Appraisal is a little hohum and repetitive, which is why I left to work for an institutional investor.
Bottom barrel is property management unless you can get a job managing a trophy office building in a downtown core. Construction is its own thing and probably not meant for this forum, but it needs to be understood if you go into development.

Keep in mind that all of this assumes you're not starting your own firm, which has the highest upside by far.

Hope this helps

    • 4
Dec 5, 2019

Agree. For the ownership side, i is all about co-invest and promote. I think a lot of people underestimate what it takes to develop on your own. Personally guarantees are scary. That's why Sam Zell never likes development, he likes buying distressed assets at below replacement costs. Less risks and less moving parts.

Also, appraisal is brutal at the higher level too. Constantly traveling or reviewing reports. As a matter of fact, it's like any professional service industry, you're paid by billable hours/reports you generate. IMO brokerage is better for sure.

Dec 4, 2019
Comment