I've been reading a lot about this online and it's definitely a career that's interested me. To start off, how do you get into a Real Estate Brokerage Firm. What do you do? How's the compensation; do you make commissions off your deals? How are the hours? Anyway you can make a million plus?
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1)How do you get into a Real Estate Brokerage Firm. Preferably study finance at the best school possible or study real estate. However, many schools don't have real estate concentrations.
In your junior/senior year take some form of CRE modeling training that will teach you how to build a pro forma, calculate levered vs unlevered IRR, what an equity multiple is as well as understanding what cap rates are and how to value a property on a exit cap rate. If you can afford it, an Argus AE cert is a great way to prove interest as well as develop a marketable skill, a lot of guys won;t necessarily care about the cert but like the self-starter appeal to the cert as well as it proves interest. Also start reading industry publications/ CRE sections of papers like the property report in the WSJ, realdeal, etc.
Getting internships in CRE is probably the best way to position yourself to break into brokerage and/or get a FT offer from an internship, I would say anything involving CRE is relevant but something with a sales component would definitely be preferred and interning at a brokerage work on leasing or investment sales would be ideal.
Network.Network.Network. If you4 internship goes well and you get a FT offer great. Otherwise, you need to network a lot, CRE doesn't have recruiting like IB, AM, ER, corp fin, etc. It hires randomly and the hiring for someone coming out of undergrad heats up in the last 2 months before graduation. You'll also be competing against experienced hires which is unusual of a lot of other industries on this forum as CRE firms have the ability to require 1-3 years experience.
2)What do you do? You essentially represent buyers/sellers/building owners/occupiers. Investment sales essentially markets, sells, conducts due diligence, and closes on transactions for incoming producing assets. Leasing essentially leases office space to tenants and such and advisors consult on various real estate topics on the behalf of owners and occupiers. There is also a financing element as well in brokerage as you will see shops like HFF that place debt/equity for deals and also leverage this to enhance their investment sales platform.
3)How's the compensation; do you make commissions off your deals? Compensation can suck or be amazing. A lot of entry level is pure commission and the amount of commission depends on the shop and your seniority level. However, the compensation can be quite lucrative if you get into a good shop with decent dealflow.
4)How are the hours?** Hours are long, especially in primary markets.
5)Anyway you can make a million plus?** If you're good yes. However, don't expect to be making 1M right out of college and also understand only the best o the best are able to pull checks like this and often times work unbelievably hard to develop a network that leads to deal flow that results in such high commissions.
Any way I can message you and ask more questions?
the above answer was great. One thing worth noting if you're just starting out - be weary of the "investment analyst" positions are brokerage firms. I know a lot of people who didn't want to be involved in brokerage, but got sucked into a brokerage shop because of the "analyst" title. Due to the high turnover of this role, the brokerage shops will often sell you on the benefits this role will have for anyone wanting to go down the analyst route. In reality, this role is only fit for someone who wants to progress into brokerage - NOT acquisitions, development, AM or finance. IMO the role is primarily constructing pitch books, updating BOV models, etc.
Should you want to do the brokerage play, rock on.
I disagree. I believe that an investment analyst or any brokerage position can be advantageous toward your goal, whether it be development, acquisitions, finance etc.
No role that you choose going into CRE will cement your role forever in CRE. Yes, if you stay too long, you could be 'labeled' as a broker or an analyst or whichever position you choose. But if you leverage each of your experiences and pick up new things along the way, I think you could go into other roles such as development, AM, finance etc.
I disagree as well, I think HandOfMidas said it well. I can see what you mentioned happening to research analysts with tenant rep/leasing groups, but not analysts on the investment sale side.
That said, and to the original poster's point, an analyst role is the typical stepping stone to becoming a producer with a top brokerage. I would be wary of firms that take on Junior Brokers tracked for producer roles without any analyst experience first (M&M comes to mind). Not that there is anything inherently wrong with that, but imo analytical experience tends to produce brokers with greater staying power and competency.
To some of your other questions, hours can be long but generally not as intense as IB, and can fluctuate at the analyst level based on deal volume. Brokers making a million dollars would generally be top producers in major markets, but it is certainly not impossible.
Disagree as well. Being an analyst on a good brokerage team lets you see a wide variety of deals from start to finish. Starting in acquisitions could get you pigeonholed into specific acquisition criteria and you could miss out on seeing a lot of deals progress through DD/closing because another buyer is selected. Plenty of brokerage analysts move on to other areas of RE once they get experience and decide the broker/commission lifestyle isn’t their end goal.
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