First thread! Undergrad looking to get into real estate here. There are so many different kinds of real estate--retail, multifamily, industrial, hotel, office, etc. All of these types can be vastly different in terms of how they function, how they're analyzed/valued, basically everything minus the label "real estate."
So my question is: why/how did you end up in the kind of real estate that you're in? Is there something in particular that drew you into it, or did you just kind of end up there? Or, if you're involved with multiple kinds of real estate, do you have a favorite?
What drew me to Multifamily/Mixed-Use Development was simple for me. I understand multifamily because I am a renter. I know the value of hardwood floors, stainless steel appliances, washer dryer in house, single vs tandem parking stops, AC in house, etc. I look for these when I rent, I look for locations when I rent, so it is easily more applicable for me to underwrite deals. I do not have that same connection to building out tenant improvements for office spaces or the same feeling as anchoring a Marshals in a strip mall. I also did Industrial Brokerage for a bit, and although in LA everyone doing industrial development/brokerage is doing really well, it is just not sexy. 32 foot steel tilt ups in the desert for lumber storage just doesn't get me going.
Thanks, I need some infomation
As someone that does CRE appraisal, I have a tough time getting excited about the details in most property types. I just don't care that much about flooring tiles or floor plan configurations. But I come across brokers that LOVE every aspect of understanding office space or retail uses. Similarly, I see developers that swoon over their HVAC decision-making and what type of energy efficient siding/windows they use for their new resi tower. No matter how much I try, I simply cannot get that interested in the particulars of the assets. Maybe if it was my money, I'd care more. I am looking to transition to the financing side of development or within securitization, where I have seen some very cool transactions.
It's more like when you're on the ownership side, you HAVE to care. Making a poor HVAC decision for instance could cost you tens, if not hundreds, of dollars. Windows are a massive expense - I've seen a project install non-tempered glass windows within balcony door swings where tempered glass was required and then the GC have to replace all of those windows. You would be absolutely amazed how much the boring little details matter.
Honestly? It's the job that I was offered. Period. I didn't know or really understand the differences between office, retail, industrial, etc, I really only knew that residential and commercial were different. I got lucky and I'm really good at my sector(retail), plus I own some multi units myself so I could probably help out a friend if they needed something there, but I'm not expert by any stretch. Industrial and office are out of my comfort zone though.
If you have an area that you're interested in, focus on meeting people that work in that sector. If you get along with them and you seem like similar people minus the age gap, then go for it. If you're sitting there across your table at Starbucks wondering what the deal with the fucking weirdo is, then that's probably not your people. Do what you think you're drawn to, or do whatever job you get offered and if you hate it, well, pick something else. Nobody says you have to stay in your first role out of college for the rest of your life. In fact if you did, I'd be worried about your sanity.
Coming out of college, I networked into a top brokerage firm but didn't have any experience so I started as a market analyst. I was surprisingly good at this but I wanted to make the big bucks so I got my license and became an office broker. It was terrible and I hated my life, my boss, my bank account, and everything else. Quit at the end of my contract and moved across the country.
Didn't really know what I wanted to do, other than "in real estate" and "not brokerage" so I took a job with a family shop that owned multifamily. I was to work out of their only asset in the city I was in, lease the building up, and then focus on acquisitions. Unfortunately, the "focus on acquisitions" part never happened, the company was hilariously poorly managed, and being a residential property manager just flat out blows.
So, I was in a weird spot in that I genuinely loved commercial real estate but hated my only two jobs and companies that I had worked with. I knew by then that development was where I needed to be but I also knew it would be one hell of a hail mary to get in with a top developer with my resume.
Ended up applying to grad school, getting in, and immediately taking a proper acquisitions internship with a value-add multifamily REPE firm. I learned more in those 4 months than I had in the prior two years and felt much closer to my goal, but I wanted to work on big time, Class A, urban infill, ground up projects - not Class C suburban crap with new paint and granite countertops.
Grad school was good for that goal and this summer I worked at a top 20 national multifamily developer. I love it, love my boss, love my team, and it's high on my list of places to work when I graduate. I like multifamily a lot too, although I also like office so I'm trying to keep my options open even as my resume seems more specialized for MF.
My advice, @RawClaw" ? Figure out what you like about real estate and how you enjoy spending your day. This might be hard at your age because you're not actually out there doing it but try and intern a lot and get different experiences. I fucking hated cold calling because I felt like a slimy used car salesman and I hated property management because I could not give two shits if a spoiled little brat's toilet wasn't fixed fast enough. I'm not built for falling on the sword, being a kiss ass, and keeping unreasonable people happy. I am, however, passionate about proper design, a solid leader/coordinator, and function well with a breadth of different responsibilities as opposed to an in-depth focus in one skill-set, such as finance. All of that means development is for me.
Just read this, my path is pretty similar. I'm curious which school are you in now?
Shot you a PM.
Thanks a lot for the thorough response, and I'll follow your advice about interning a lot and getting different experiences. After going through your story, I feel that I may have a similar mindset as you; I'm actually majoring in hospitality but I've found that I hate operations for the same reasons that you hate property management, so I'm pursuing a real estate minor and also looking for roles with a breadth of responsibilities. Maybe I should look deeper into development.
I've actually just been offered a fall internship in acquisitions for a multifamily REIT, which I'm pretty pumped about, but I'm wondering: why did you end up working for a developer this summer rather than stay in acquisitions?
There is a ton of overlap between acquisitions and development and some roles at some firms will have you doing both, but in general, acquisitions is more of a financial role and development is more of a management/coordination role. Development is also a more "breadth" type role, while acquisitions is more "depth" if you know what I mean.
Task-wise, I'm more interested and effective when coordinating projects between debt and equity providers, contractors, architects, designers, local government, etc. Development lets me underwrite deals, go on site and oversee construction, interact with the community and community officials, guide architects and designers through visioning sessions, etc. and sometimes all in one day.
Plus, ground up is sexier to me than value add. I love my class A properties and don't miss class C renos at all. I'm genuinely passionate about design and innovation and you don't get to push that as much if properties are more numbers on a spreadsheet than they are creations you rise out of the ground.
A lot of bias and generalizing, but that's my rationale.
Why hate operations? It’s probably the best way to create outsized value in a commoditized asset (compare Unit A vs Unit B, but give me something - a service - I can’t get readily else where and then I don’t know what to pay - you learn this is MBA pricing class but also on the job as a developer which is a form of operations in my opinion). You are creating a brand - yourself and your product.
The next is development (maximizing the density or assemblage or finding highest and best use) and financial structure (managing downside and getting enough upside, control and timing).
There will always (besides COVID pandemic for hotels) be a need for good operators. Operators make sure people are safe, that there is a place companies and people want to be long term. Development, not so much, as there are so many ways to make a developer’s life difficult.
Since this got bumped from two years ago, I figure I'll give an update. I, perhaps unsurprisingly, ended up in multifamily. I still flirt with moving over to office about once a year. The more things change, the more they stay the same.
how his acquisition more specifically. also development and asset management. What is the difference and how does the pay scale vary. I tried to it up. it is very general with no information what so ever.
I am a generalist and work across all real estate asset classes, but these days focus only in the Asia Pacific region. I like making money and buying cheap, and its that and not the buildings that keep me going, but having said that, I find retail real estate to be very cool - particularly large scale shopping centers and "lifestyle centers" and the like. Optimizing the tenant mix is truly an art (and to do it properly one often sacrifices on rent levels at the start), and a good retail asset manager can completely change the character (and thus increase the value) of an asset. A good office or multifamily asset manager does not seem to have as large an impact, though hotels are more similar to retail in this regard. Interesting note, and its clearly coming out here, I am on the acquisitions side, but the AM side of it has become more interesting to me over time. Once I start my own shop I'm going to be highly involved in both sides of the business and going to obsess over hiring specialists that understand retail and hospitality management... they really can add a ton of value.
+1. It blows my mind how many landlords just want to throw any tenant that'll pay the rent in their centers. It's generally the small time guys, not the institutions, but it's always amazing to me when I have to tell them that I'm not willing do a particular deal because it'll fuck up the synergy in THEIR CENTER that I've worked so hard to create.
Similar to thexaspect, I was hell bent on getting into commercial real estate right out of college and ended up working for a hospitality company. Could have just as easily ended up in any other asset class but that's how the chips fell and I am happy about it.
I have some extended family in more traditional lines of CRE, so I always thought that is where I would end up - as most my connections lie there. sometimes i think I would be better off going a more generalist route because of this, but I enjoy hospitality for many reasons and at least for now plan to stick with it.
Hotels are very nuanced and like what International Pymp said, a strong Asset Management plan can really make or break a deal. There is so much to learn about in terms of brands, management, market mix, F&B, chain scales, service levels, capex, the actual site, capital structure and how it all makes a deal feasible or not.
Thanks DeanYoungBlood. I'm actually majoring in hospitality so what you do is something that's particularly interesting to me.
Quick questions: Since it is so important in hospitality real estate, are most of the job opportunities in Asset Management? And does getting into hospitality real estate prevent you from getting into a more generalist route?
You can get a job in say "finance and feasibility" or something for a hotel company which often means analyzing new properties etc. and is more similar to an acquisitions role. But it is true that it can be hard to move from that to a more generalist acquisitions role. If you start off in REIB you'll have more flexibility in the future even if you industry specialize for a while. I personally started off at a generalist developer then went to a residential-focused PE firm then to a more generalist large-cap repe shop where I work on everything... So one can bounce around. Going to HSW for an MBA also helpful in this regerd even though some question how much value it has in RE business.
Plenty of opportunities beyond Asset Management. Development, acquisitions, lending, consulting/appraisal/feasibility etc.
I wouldn't say it prevents you, but a lot of people that start out in hospitality tend to stay there - though id argue that that is mostly by choice. That being said, I've seen it done in my limited career, even just poking (stalking) around linkedin you can find examples.
I think during early analyst/associate years you could switch to a different property type/generalist role, but you will have to have a good sales pitch in interviews as to why, and also how your skills transfer, as you will be competing with those that come from more traditional forms. all how you spin it.
In general, id say breadth over depth would be ideal until you figure out what you really like.
I'm assuming you are at Cornell - I wouldn't fret too much, excellent placement into great hotel and general real estate companies. Try to land some solid internships and weed out what you do and do not like,
I ended up in REPE because I was always interested in the Fund style of raising capital and investing. I got certified in Argus during undergrad and I am glad I did since I exclusively work on office properties.
I really enjoy working on office buildings because I can go downtown and point to buildings and tell you the history of who owns it, when it sold, largest tenants. It's cool when you can point to a 30-50 floor building and say we own that and I spent months working on it.
Pointing up at a skyscraper and telling girls "I sell these" was my favorite line whenever I was asked what I did as a broker out at happy hour. God, I was a douchebag - and a leasing agent at that.
You're a legend for this. This is everyone's first 2-years in a nutshell.
In industrial I have the reverse situation. I remember one time I was riding with a girl with my head in my phone and she took a wrong turn in a pretty shitty part of town. She freaked out - so i looked up and realized we were on a fairly prominent industrial street that I obviously knew well. Told her to relax and that i knew the area and to turn after the upcoming building which I referred to by the tenant's name. My city's urban industrial has a fair amount of underground gay leather bars... that happened to be one. Spent the remainder of the car ride explaining why i knew exactly where we were.
I once did an office value add deal that we were the LP and the building had a positive “white swan” event where the entire building was acquired by a defense contractor - a very positive financial outcome.
Several years later I found myself playing tourist in that city and decided to check out the asset I underwrote. I was stopped by the security in the lobby and told/ordered to leave (defense contractor was the owner). I wanted to tell them my name was on the IC memo; that, never mind.
Anyways good thing I wasn’t arrested.
I say this now! - I picked it up from a couple of guys at C&W lol
Basically didn't know what to do with my life. Got an interview through a family friend for a real estate Asset Management firm. Didn't know anything about real estate but the more I researched it the more I became very interested in it. By the time the interview rolled around I passionately wanted to be in real estate but I honestly did not care whether it was residential, commercial, office, etc. And while I didn't land that job, I ended up landing an acquisitions role at another REPE firm that dabbles in all types and haven't looked back since.
I'm in a similar boat right now - no real estate background but have been trading resi loans for a couple of years and want to get into real estate. do you think i should be looking for Acquisition roles or AM roles? Also, I'm in LA/OC if that adds anything.
Hey! I am an UG at NYU, majoring in RE. I am currently interning in REPE. I really like it. I work on a small team that advises LPs on which funds work/fit best for their investment strategy. We have meetings daily with GPs in regards to their funds. We also have $ that we can use to invest in these funds. I really like working with funds that have a value-add strategy. I like the numbers aspect as well as the design aspect of real estate. Working with value-add funds allows for both. We do the DD on these funds and we get to determine the best way to add value. We have a say in the design. Best of both worlds! Go out and talk to people, I think that is the best way to find out what you like. Its also ok to not be exactly sure what you like, its important to not rush yourself.
I ended up deciding that product type was not as important as I had originally envisioned. I had initially pictured stark dividing lines between product types and the resulting vast discrepancies in flexibility later in life.
I felt much better after saying "fuck it" and instead going with the flow to get the best job possible (with a good group, smart people, etc.), regardless of product type. Just my take.
I was extremely fortunate to land at my current firm however it was more a product of preparation and determination to get into the industry rather than picking a product type prior. I’m in retail and it’s been an incredibly stimulating and fun product to work on. Everyone is freaking out about the struggles with big box and Amazon but with big problems there’s big opportunity. It’s a quickly evolving industry so there’s lots of room for creativity.
That being said, if my firm dealt in office or multi-family I think I still would have landed with them. They are exceptionally smart, patient and well-respected in the industry. Point being, I think who you work for is more important than what you work on as your success will be closely related to whoevers coattails you’re riding (at least in the beginning).
Completely stumbled into a firm that specializes in healthcare real estate, mostly seniors housing and skilled nursing. Now that I've been here and understand the space I'm pretty drawn to the complexities that are unique to the sector. It's a blend of underwriting an operationally-intensive business as well as the real estate which can make things a little more interesting, especially on the skilled nursing side. Very interested in staying in the asset class long-term.
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