What do RE Asset Management Analysts actually do?

JSmithRE2010's picture
Rank: King Kong | banana points 1,018

I've read enough threads on RE Acquisitions to know what the acquisitions analysts do. I searched the forum and most threads were about comp and career paths for Acquisitions vs Asset Management. I understand at a high level what the asset management team does (performing hold/sell analysis, lease analysis, budget planning/approval, updating market research), but what is the analysts role in all of this?

I read that some asset management analysts at smaller funds will have accounting and investor reporting responsibilities. But what about bigger REITs and PE Funds where the asset managers actually do underwriting and property level financial analysis? What is an analyst actually doing in a Hold/Sell analysis or Budget approval situation?

I'm asking because I'd like to be able to probe an interviewer on an asset management team about the true responsibilities of an AM Analyst. So if anyone has work experience in AM at a large owner/operator or PE fund feel free to share your experience. Thanks

Comments (28)

Best Response
Nov 1, 2017

I'm working right now as an Asset Management analyst with a Real Estate Private Equity firm (we're a PERE top 25). I'd say that you have the general gist of what asset management does, but as far as the analysts' role in all of this, we're the cogs driving this machine (and I mean that in the best way possible).

For instance, when crafting together a 2018 property budget, the analyst is really the driving force in this process. We will be working closely with the property manager and overseeing them to ensure that the budget's recoveries are structured correctly, that the expenses the property manager has projected make sense given prior year actuals, that everything is booked in their correct accounts, that CAPEX spending projections are in ship shape, etc. Once we think the budget is good to go, we present it to our asset managers who will probably give us more edits. We then go back to the property manager to incorporate these new edits. Then we present the budget to the portfolio manager who will have his own set of concerns and suggest further edits. So we go back to the property manager again with more edits. This cycle is repeated until the portfolio manager gives the budget his seal of approval.

It would take a long time to give a complete rundown of every duty we have as our scope of responsibilities is extremely wide. We touch a bit of everything whether it be leasing, legal, appraisal, property management, onboarding post acquisition, disposition, budgeting. I'd say a lot of the day to day is determined by the asset managers you work under. I currently work under 5 different asset managers and each has their own way of doing things. Some of them are big picture guys who don't obsess over the nitty gritty, while some of the asset managers are super analytical and like to go deep, deep into the weeds (for instance one asset manager had a fellow analyst go through a million different analyses of a potential lease that would be only 1,500 sq. ft. in an 175k sq. ft. office building).

Not sure if any of this helps at all. Let me know if you have any further questions.

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Nov 1, 2017

This is a really helpful write-up. Thank you. But the more info the merrier. If you or anyone else wanted to expand on lease analyses or the disposition process that would be helpful too

Nov 1, 2017

I can't really speak too much about the disposition process since I'm just beginning to go through my first disposition now, but I might be able to shed more insight into how we handle lease analysis. A while back we went through a renewal for a single tenant office building I'm on. Basically, when the tenant's broker presented us with their initial deal terms, I modeled those terms in Argus to see how our property's value would be impacted (and if the asset manager wanted, I'd also plug the resulting cash flows into a number of different Excel models to see how long it took to recoup our share of capital from TIs and Lease Commissions, or see how the cash flows would compare to our original pro forma projections, etc.).

After the initial offer, the asset manager and I discussed which parameters of the lease we could budge a little on and which parameters were non-negotiable and try to find some middle ground that wouldn't kill our property's value. We'd then relay this to our broker who would go back to the tenant's broker with our revised lease terms.

Each step along the way, the Asset Management analyst is plugging the lease terms into various models which the asset manager will use to decide what the next step will be.

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Nov 1, 2017

The cool thing about AM is that it's not cut and dry like Acquisitions (underwrite deals rinse and repeat). AM you get your property level analysis, get to work on major projects, as well as any dispositions.

Nov 1, 2017

You may be asked to help out with acquisition teams from time to time, so it might be good to ask about this in the interview. Examples can include providing comps or other revenue/expense assumptions (as an analyst, you may be a point person for that). In my experience, AM teams can also be called on just to give general feedback on a potential investment because AM are more hands on and have more experience in the long term operations and performance of a property than acquisition guys do. And once the deal is closed, it's basically in the AM's hand, so sometimes you might get looped in early to help ensure a smooth transition.

On a side note, I've done both at the analyst level, and while I do prefer acquisitions, there are a lot more practical skills that you can get out of AM that would serve better if you ever wanted to have your own small scale RE portfolio. Whether it's a massive office complex or a small apartment building, going through the budgeting and being in communication with property managers will get you a much better grounding on how RE assets actually function.

PS - Even if you never meet them, establish a good rep with the PM's because you'll be relying on them a lot and will probably be asked to communicate with them directly on a regular basis.

    • 1
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Nov 1, 2017

Good stuff. Appreciate the insight. I've heard from interviewers about assisting with acquisitions in an AM role, but never really knew if they were just saying that to make the job sound more appealing

Nov 1, 2017

The answer is both "both" and "no one cares"

I don't say that to be rude, but outside of the banking circle jerk it doesn't matter if someone is so called front or back office

    • 1
Nov 1, 2017

Stupid question brudda, quit looking for validity on WSO, you're on a website with more malcontents per capital than 4chan's /pol

    • 3
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Nov 1, 2017

How far out of school are you? Skimming over it, seems like a role that will give you insight into many aspects of the firm and you can probably move into one down the road... or stay in AM if you like it. If its with a company you say is well known, then its def a good opportunity. AM can be a broad term and responsibilities/scopes of work vary from group to group

Nov 1, 2017

Thanks without being too specific I am years out of school

Nov 1, 2017

I am an undergraduate trying to break into that space. Looking back what advice would you give for my job search, interviews, and the like? Is the hiring cycle over for entry level analysts?

Nov 1, 2017
matthew.dixon90:

I am an undergraduate trying to break into that space. Looking back what advice would you give for my job search, interviews, and the like? Is the hiring cycle over for entry level analysts?

not sure if you're talking REPE in general or just AM. our firm finished analyst recruiting a while ago i believe. the AM team runs very lean and does not hire analysts out of college. that could be different elsewhere. regarding the first part of your question, i dont think i can add anything that hasnt been drawn out extensively elsewhere.

Nov 1, 2017

I'll copy this from the other thread:

Hi there mate, cheers for this, really helpful. I am applying for Blackstone's REPE internship in London. My father worked in the industry, and have been able to have experience from some REIT such as Land Sec. I also have some experience of Real Estate advisory and administration. How best can I market this to them? Most of this has been on the development side of things, is this still advantageous to my application? Thanks for any insight.

Nov 1, 2017
nicedsalec452:

I'll copy this from the other thread:

Hi there mate, cheers for this, really helpful. I am applying for Blackstone's REPE internship in London. My father worked in the industry, and have been able to have experience from some REIT such as Land Sec. I also have some experience of Real Estate advisory and administration. How best can I market this to them? Most of this has been on the development side of things, is this still advantageous to my application? Thanks for any insight.

same as any other finance job really. demonstrate your interest, your willingness to work hard, your intelligence, etc. luck plays a big component too.

Nov 1, 2017
prnz:

i'm an associate in the asset management group of a large REPE firm. i work on deals across both our core and opportunistic funds. a large amount of what i do involves working out busted deals from 2006/2007. thought i'd open the thread up to questions anyone might have about asset management or CRE in general.

What are the primary differences, if there are really any big ones, between an AM job in REPE from that of say, a REIT, or doing AM at any other firm doing more core investing? In the opportunistic fund, you are of course looking to manage on a short-term horizon, but I'm just wondering if there are any other markedly different things about the job in PE?

Nov 1, 2017
econcomputingCRE:
prnz:

i'm an associate in the asset management group of a large REPE firm. i work on deals across both our core and opportunistic funds. a large amount of what i do involves working out busted deals from 2006/2007. thought i'd open the thread up to questions anyone might have about asset management or CRE in general.

What are the primary differences, if there are really any big ones, between an AM job in REPE from that of say, a REIT, or doing AM at any other firm doing more core investing? In the opportunistic fund, you are of course looking to manage on a short-term horizon, but I'm just wondering if there are any other markedly different things about the job in PE?

there can be differences in styles across companies to be sure. it really depends on what your investment strategy is. often larger funds will invest alongside an operating partner, and in those circumstances your responsibilities are less hands on. i would imagine that as your firm gets smaller in size that you start getting closer to the daily operations of the properties. additionally, some companies (e.g. LeFrak) blur the boundaries between asset management and property management. there are also big differences in terms of if you're doing core vs opportunistic. i personally find the opportunistic deals a lot more interesting and feel that i learn the most from them.

Nov 1, 2017

Can you provide a bit of background information on how you got to where you are today? Are you an ivy league MBA that knew you wanted to be in REPE since age 15 or did you start in a RE business and make a serious of career moves that helped you build up a diversified skillset ?

Nov 1, 2017
REValuation:

Can you provide a bit of background information on how you got to where you are today? Are you an ivy league MBA that knew you wanted to be in REPE since age 15 or did you start in a RE business and make a serious of career moves that helped you build up a diversified skillset ?

My family has a background in real estate so I was exposed to it from a pretty young age. In terms of background, I studied Econ. No MBA. I had a internship in which I learned argus. I think that played a big role in getting my foot in the door.

Nov 1, 2017

What would you say are the biggest challenges you face when deals come over from acquisition? What frustrates you the most?

Nov 1, 2017
reLA:

What would you say are the biggest challenges you face when deals come over from acquisition? What frustrates you the most?

there's some annoying administrative stuff but mostly lack of communication / early involvement in the deal--trying to get up to speed quickly on something you're not especially familiar with

Nov 1, 2017

What role do people usually go into post MBA if they don't have prior real estate experience? I previously worked in growth investing (but not in RE) and now at a top MBA - most of my skills are on the investing side and not industry. I heard mixed things about real estate investing - some say it's hard for outsiders to come in at non-entry level positions and others say it can be done. thanks.

Nov 1, 2017
CharmWithSubstance:

What role do people usually go into post MBA if they don't have prior real estate experience? I previously worked in growth investing (but not in RE) and now at a top MBA - most of my skills are on the investing side and not industry. I heard mixed things about real estate investing - some say it's hard for outsiders to come in at non-entry level positions and others say it can be done. thanks.

I think it would be difficult to get hired at my firm as a post-MBA without at least a prior RE internship or coursework. That's not to say that all firms are like this. I would look for companies that have hiring programs for newly minted MBA grads and see what they're looking for. I'm sure they exist.

Nov 1, 2017

What is your opinion of a role in asset management on the debt side. Particularly managing loans involving condo conversions, renovations, acquisitions, etc. Also how valuable is the workout experience you receive when dealing with distressed loans. This role has significant borrower and asset exposure

Nov 1, 2017
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