What do REPE and Developers look for in IS analysts/associates?
I've been on a pretty strong brokerage team in a major market for the past 2-3 years. The team I'm staffed on is one of the top MF teams for CBRE / JLL / Colliers. I've been thinking about moving over to REPE or development lately and wanted to see what are strong traits to have on my resume. I've underwritten and participated in over $2.5B worth of sales in the market and have helped specific clients with acquisitions. Does anyone have any experience with this move?
This was the path I followed. The reality is that you're going to wind up working for a client, which likely means they already know you, the quality of your work product/responses, your market knowledge, and they likely have a general idea of your quantitative chops. Any interview is likely to be purely fit driven ("do we want to be in a foxhole with this yahoo?"). My interviews were all telling stories, talking football, and chopping up a few deals I'd worked on (stuff they had lost out on but had wanted to buy), deals we'd worked on together, deals we were marketing that they were looking at, deals they were working on that I didn't know about, markets we liked, product type we liked, who we all in the industry we thought was a dickhead, and would my bosses crucify them if I left... you get the picture. All that said, I had worked on deals with these people for a couple of years, and we'd both sort of pre-screened one another. It was all just a confirmation of what both sides already knew.
Unless someone has their panties in a wad to hire an investment banking analyst or an MBA, you should have a pretty easy time finding a spot on the principal side. I'm biased but I like your background and think it is the best starting point in real estate.
Curious on your thoughts of the transition from debt originations to buyside?
To me, you could sell your experience by that of an acquisitions analyst. Screen hundreds of deals, pass/fail, model the passes, create IC memos, ASR's, market research, etc. seems pretty similar, no?
I understand the easiest way to buyside would be IS, but for debt you are also working with borrowers and principals who acquire assets. You could make the same client argument here as you did in your post.
Depends on the debt team and the specific person, but I don't disagree with you. We've just had better luck hiring out of investment sales that from the debt teams we work with, which is purely anecdotal.
I went from MF debt screener to mixed use development analyst. I wouldn't say investment sales is "better", in fact on the debt side you probably have a deeper relationship with the borrower and a better understanding of their business if you are underwriting 30 deals per year for them vs. transacting with them a few times per year. Principals love investment sales guys since they bring them off market deals and having a good relationship with an IS broker can make a meaningful impact on your business whereas debt is more commoditized, especially in the Agency world. We often referred off market deals to our borrowers from our other clients as well so that helped build our connection with them as a lender.
You're right in that a debt originations analyst is much like working in acquisitions since you churn through a lot of deals and underwrite cash flows, structure deals, write memos, etc. very similar process to principal side. Its different in that you miss out on a lot of the granular due diligence and planning/strategizing since in the debt world you are focused on not losing money vs actually making money. Debt is thinking about risks and downside vs equity that is thinking about opportunities and upside. Anything you don't know can be learned and no one is expecting to hire someone at a junior level that already knows how to do the whole job, you just need to be a competent person that learns quickly and is easy to get along with.
I’ve only worked at the “panties in a wad” places (IB/MBA backgrounds) as I can’t think of one analyst/associate with brokerage background prior. However, I’ve worked with brokerages with great analysts for dispositions and acquisitions - so I think the background is great and I like the hustle. I like the wide lens.
To overcome the “panties” problem, I would emphasize the following:
prior or current experience on buy-side thinking: many times buyside thinks the broker’s numbers are not accurate. I think in an interview you be very discerning and be able to rank deals on relative attractiveness and why. Show me you have a well articulated reason vs buy buy buy sell sell sell. There is an inherent skepticism (Some) buyside folks have of sellside, because you think you are not being told everything. Break through. Talk / think about risks more (I say this often on WSO).
the waterfall: this might be an issue for the debt guys too; there are property level modeling and then investor level. That’s said I don’t know too many 1-3 years out of college would-be analysts who know everything so not that important. Work on this.
deal flow, geographic diversity, product type diversity: I say this over and over on here. That is the trifecta, early in your career and it will serve you well later too.
relationships with old brokerage firm: can’t emphasize this enough
work ethic: would you run through a wall to get it done; your recommendation from your boss should speak to that
nerd: there may be some us vs them going on. Brokerage seems to be a different personality as buyside (perceptions sometimes). However on the analyst level, should be similar to buyside (crank artist/monkey) but clumped in with the sector.
Great response, what if you're on a weaker team in a major market. Not one of the three mentioned and more on a top 10-15 shops in the city, but it's a top 2 market. Still meeting people, but may not be working with institutional clients who you want to switch to. Have had some convos with medium to bigger developers, but nothing meaningful and they probably don't remember who I am in most cases. Have not closed any deals with them or had many offers, but that may just be the market right now. Any advice in this case? I've heard advice of jumping to a better team at a top 3 shop which I am leaning towards, but really want to be on the acquisitions/development side if I can swing it from where I'm at.
The key point I was trying to make is that you're likely getting hired by a client of your team. If you don't want to work for any of the groups you're selling deals to, then I'd suggest changing teams. More institutional buy-side/development groups may still want interview you given you have a background in the space, but they're going to want to hire the people that they already know... just the way the world works.
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