Worst Places to Start in Commercial Real Estate

EliteStudent11's picture
Rank: King Kong | 1,047

Like the title says, I'm trying to figure out the worst first job you can have in commercial real estate. That way users can know to avoid it and aim for something equally easy to get but less hindering to your career.

Based off what I've read here, appraisal and DUS lending seem to be the worst. In appraisal you're not truly thinking about value. It's more just a required document lenders need.

In DUS lending, you're just underwriting to the guidelines fannie and Freddie force you to. And sucking on their teet to close deals. Plus it's multifamily only.

Anyone else? What's a job real estate folks should avoid if they want to make it to the big leagues (REIT head of acquisitions, MD at repe fund etc)

Comments (73)

Oct 11, 2018

Property Management, Appraisal, and Valuations.

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Nov 2, 2018

Disagree, good friend of mine went from valuation to asset management for a highly regarded shop in less than a year, depends how you spin your experience

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Oct 11, 2018

Bump. interested in this thread.

Array

Oct 11, 2018

Leasing.

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Oct 11, 2018

agree with @The_Duke_of_Wall_Street. curious why you think leasing. that's where I started and lateraled directly to an office developer, thought it was a great place to start.

I would also add research at a brokerage to the list

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Oct 11, 2018

I agree with research at a brokerage as well. The senior researcher at my office said himself that research is seen as a revolving door. People come in for a year then leave elsewhere.

Oct 12, 2018

Agreed. Leasing gets an unduly bad rap. I know several partner level guys at development shops, all of whom started in leasing, who are as sharp, and well respected as can be in my city (top 5 MSA).

Definitely not the worst place to start (probably a RE accountant), but I'd recommend REPE or dev if you can get it. If you can't, I'd try to convince a JLL/CBRE/HFF/C&W that you're worth the low overhead associated w/ an investment sales analyst, and you'll set yourself up well to get on the principal side (if that's the end goal).

I come from down in the Valley, where Mr. when you're young, they bring you up to do like your daddy done.

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Oct 12, 2018

Disagree. Leasing professionals at good shops are extremely valuable because of the relationships they have with tenants and the market/property level information they have. Our leasing guys are like encyclopedias. There's also a ton of overlap between AM and Leasing if a younger person wanted to switch internally or do a year or two in leasing than jump to AM at another firm. Leasing is the RE equivalent of doing Equity/Debt sales on a trading floor.

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Oct 11, 2018

Thought we were talking about starting out? No doubt the more senior guys have great gigs and know their market well. That being said every junior leasing broker I know spends all day cold-calling, for a draw, and thats if they are lucky. Only chance this would be a valuable place to start without grinding for a 4-5 years would be if you got lucky and had a more senior guy take a real interest in you.

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Oct 11, 2018

I've seen many people start in Valuation groups of major accounting firms and later move to prestigious REPE funds and developers. Appraisers are generally looked down upon, but their day to day work has some overlap with an acquisitions role.

I would avoid:

Property Management - stressful with limited compensation upside. The only underwriting exp you get is making operating expense and capital expense budgets.

Residential Sales - very cyclical, lots of running around, minimal base salary, not respected in REPE

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Oct 11, 2018

@VolatilitySmile I would be interested in one person who has started in valuations and ended up a major REPE firms. I'm skeptical.

Oct 23, 2018

There are several larger shops that actually have in house valuation teams and direct promote to acquisitions analyst/associate roles. It's not all that far fetched. Definitely more rare, but it happens.

Nov 2, 2018
The Duke of Wall Street:

@VolatilitySmile I would be interested in one person who has started in valuations and ended up a major REPE firms. I'm skeptical.

Actually know a guy that started off doing valuations at Big 4 and went to Starwood doing AM. Probably one of the rare instances though.

Dec 4, 2018

Also know several people who have done this. Likely would be more challenging in the current market but this was a few years ago

Funniest
Oct 11, 2018

Aleppo, Pyongyang, Baghdad,

Don't get close to these places for their real estate

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Oct 12, 2018

What is Aleppo?

I come from down in the Valley, where Mr. when you're young, they bring you up to do like your daddy done.

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Jan 2, 2019

Exactly

Oct 11, 2018

Currently work in appraisals (Valuation at the large brokerages). You're right, definitely not the best place to start as you do not gain the ability to think like an investor, however, you have exposure to so many parts of the process that it is a great place to build a foundation.

That said I'm hoping to finish this year and get the hell out lol

Edit: I should mention that i took this job in order to break into CRE, completely different path than previously. I would strongly advise anyone against taking a role as an appraiser at any of the smaller shops. You work in "Valuation & Advisory" at the large brokerages and you get exposure to a lot more work and asset classes than you would at a small mom and pop, and for the love of god do NOT go into residential appraising.

Oct 12, 2018

I have a few internships in M&A but also have completed a yr at a major CRE firm like JLL in Appraisal. From a high-level the skills are transferable to valuation. It's helped me a lot in terms of professional development by coming in everyday. Also, my interviews have improved significantly because of the experience. Your clients at a major CRE firm are national Commercial banks. This exposure gave me good talking points in my interviews.

Appraisal isn't glorious but if you work for a big name for a year MAX then you can pivot into another valuation direction. The brand can carry weight. It's not the worst place to start, but don't stay longer than you have to. I echo your sentiment about quitting. I was happy the day I turned in my resignation.

Work hard, work clean, & most of all do not give up.

Oct 11, 2018

Nothing wrong at all with underwriting or sales at an agency shop. Good salary and bonus, promote quickly and reasonable hours. Occasional travel to see buildings/markets.

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Oct 11, 2018

Cold call sweat shop or Property manager at a class C Multi with Multiple homicides

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Oct 23, 2018

Coincidentally also the worst place to end your career in CRE.

    • 1
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Oct 11, 2018

How it took so long for someone to say research I don't know.. in today's day and age with resources available anyone with a brain can do research. You're only option is to and switch internally to IS or another IS team. No one is hiring a guy from Research for an Acquisitions, AM, or development , etc role.

I think some of these are alittle blanket statement however..Property Management? Sure if you are handling tenant issues at a residential shop and inputting toilet clog tickets. If you're in Property Management for say Vornado or a Property Manager at the World Trade for Silverstein, you may be able to make the jump to say AM. I've seen it before. It just depends on how deep you are into your career.

For Appraisal.. if you're with a top market team with CW/CBRE/JLL, it's not a terrible place to start. Are you going to exit to BX? No, but you may be able to land a role with a smaller REPE. A lot of roles mentioned depends entirely on the firm you're working for.

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Oct 11, 2018

How has Marcus & Millichap and World Class Capital not come up?

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Oct 12, 2018

What about World Class Capital Group?

Oct 12, 2018

Marcus and megachump

Oct 12, 2018

Bump. interested in this thread.

Oct 12, 2018

Thread states this is a commercial related inquiry, but just re-iterate stay away from residential, it is full of small timers with no technical skills or problem solving abilities whatsoever.

Regarding valuation, i got in to appraisal because my resume was too soft to get into actual finance. I worked to pay my way through college and didn't have time for unpaid internships, clubs, etc. After spending 3.5 years in valuation with a national firm (including 1 year intern as senior in college), i have had broad exposure to all asset classes (office, retail, multifamily, industrial) and know more IMO than most investment sales analysts and associates because they get pigeonholed into working on one asset only. But i was lucky and got into a good shop, which doesn't seem to be the norm.

  • Property management: no exposure to budgeting, do what you are told
  • brokerage: low pay for entry level and even for experienced brokers at mediocre firms, hence top 10% of brokers make 90% of $$$ (think CBRE, Cushman, Eastdil, etc.)
  • research: in my experience very little helpful research is actually accomplished, mostly just updating models with broker surveys

P.S. if you are really an "Elite Student" you won't be working an appraisal job or property manager anyway lol

Oct 12, 2018

Disagree with your first line on residential brokerage in a specific situation. Is it better than a CRE internship? No. Is it better than working any other non-related job? Probably. Certainly better than sales at Apple or Tesla or something like that.

And if you have to pay for school, it's great. I spent just over two years as a residential broker and (kinda like CRE Brokerage) was lucky to be with a good team. Worked under a guy whose father was a big developer (relative to the area) and he taught me a lot. Because of this, I've been able to source and close a decent chunk myself. And definitely shows interest in real estate.

I will say @CRE made a great point replying to this sentiment in a previous post by stating that my success with job offers post UG Graduation may be more of a function of me articulating my experience well than the actual work I've done. Could be.. I'll never really know. But I wouldn't write off residential brokerage as a whole if its what you're doing during college and if you align yourself with the top 10% of brokers out there. Its great money for 18-early 20s.

Oct 12, 2018

I stand corrected your points are well taken.

Residential brokerage can be good experience, depending upon your supervisor's interest in developing you. That is the problem with real estate (in my limited 3.5 years of experience) is that as you pointed out, every job is heavily dependent upon "specific situations". Another recent thread discussed why RE is considered inferior to banking, i would argue that lack of structure in training is the reason. Your first job can be a crap shoot on ultimate takeaways, whereas in banking it is well defined on what a 2nd year analyst or associate can do.

Oct 12, 2018

Commercial mortgage servicing will not do you any favors. I don't even know if this is considered CRE but I've heard people say they work with CRE and this is what they do.

Oct 12, 2018

Everyone here has pretty much covered it, but I will say, one of the nice things about RE is that it's not impossible to switch positions, like it can be if you're trying to break into IB/AM coming from a back/middle office role. It's totally doable to go from leasing/property management to AM. You really don't have to be a genius to make it in this industry and there's less of a drop off between the MFs and up-and-coming shops, so there's always smaller funds with just 1 or 2B AUM that aren't getting 100,000 applications a year and are happy to talk to anyone with a demonstrated interest in RE.

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Oct 12, 2018

Honestly most entry level jobs in real estate other than working for an investment or development shop, or commercial lender, can be shitty. Too many factors such as good or bad culture, good or bad product you are working with, and almost all of them will start with shitty pay. So as with everything in the commercial real estate industry, who cares what your first job is, just learn as much as possible about the product and market, and grow your network. It is what you make of it.

Most Helpful
Oct 12, 2018

I have to chime in here, far too many in this forum downplay the advantages and amazing breadth of experience an in-depth appraisal position can offer someone, particularly early in their career.

I cover the benefits far more extensively here, I transitioned from appraisal to REPE several years ago:
https://www.wallstreetoasis.com/forums/moving-from-appraisals-to-repe-acquisitions
Again this all depends on the quality of appraisal firm you choose as well as how experienced the principals running your shop are but this really is not much different than any other subset of the industry.

It sounds cliche but any position is going to give you what you put into it. Although certain roles may give you a leg up on paper, the ability to grow and build a solid knowledge base are far more valuable early in your career than having a brand name on your resume.

Any questions I'm happy to provide more insight.

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Oct 13, 2018

Any job in CRE where you get to work with properties is a good place to start, some though, like property management, area harder to break from.

Bad brand names are tough to shake though.

Oct 11, 2018

I know of three individuals in our office who came from property management and are now in successful roles as AM in REPE. Understanding the fundamentals in property operations and putting together a budget is crucial to accurate underwriting and managing a deal.

As others here have alluded to, it's all what you out in to your role. I half joked earlier about m&m but they've produced some solid brokers in our area and the guys IPA are no slouches.

Oct 18, 2018

Bump. I'm also interested in this.

Oct 18, 2018
EliteStudent11:

In DUS lending, you're just underwriting to the guidelines fannie and Freddie force you to. And sucking on their teet to close deals. Plus it's multifamily only.

FWIW a lot of people at DUS lenders have been making a killing in this cycle. I have a family friend who is a couple years out of college in a "2nd tier city" who got a $150k bonus last year. This forum would probably scoff at his no name non-target college and non-prestigious city but ~$200k in low COL at 24 is legit.

Oct 18, 2018

Is he a producer? I think that is honestly where the money is heading. If we have another market correction like everyone is expecting, I think lending practices will tighten again and the guys at fannie/freddie/dus will make great money.

Someone correct me if I am incorrect in my thinking.

Oct 18, 2018

Analyst. The producers pool together production commissions and pay out bonuses at the end of the year. When they hired him they offered him $50k base and told him to expect about a 50% bonus with a lot of variability. They have been killing it and he got a 300% bonus last year. I think the producers only have slightly higher base salaries but get a much bigger piece of the bonus pool.

Oct 18, 2018

double post

Oct 18, 2018

Honestly you could have the most back office accounting job at some dinky RE shop that is a fee only shop that only makes terrible deals to get acq fees, and you would still learn a ton if you just opened your eyes.

RE is about spinning your experience into why you are valuable. Sure some places might care about prestige but most shops can run efficiently with a small team to make a power house if they all bring something to the table.

The people who dont make it in RE are people who want to do Corp Fin at a FAANG dont make the cut and then do Corp Fin at some RE shop dont care to learn the business and then 10 years later realize they dont really understand RE and have shitty Corp Fin Exp. Those are the people who fail, succeeding in RE is doing whatever job you are doing but seeing the bigger picture.

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Oct 18, 2018
Sham Wow:

RE is about spinning your experience into why you are valuable. Sure some places might care about prestige but most shops can run efficiently with a small team to make a power house if they all bring something to the table.

100% this. I've never worked at a Vornado or Extell or whatever, but in my experience prestige counts for jack shit and experience for everything. Sometimes I think in banking, the "prestige" factor is just so the HR departments can compare dicks; you're hiring a bunch of monkeys anyway, the vast majority will be gone within 5 years, so who cares?

I know plenty of real estate project managers who are amazing at what they do and have "bad" educational backgrounds (I mean, still a college degree and all that), because they hustle and they learn and they understand the business.

Oct 19, 2018

I wouldn't consider Extel prestige...but that's just my view.

Oct 18, 2018
Sham Wow:

...learn a ton if you just opened your eyes.

RE is about spinning your experience into why you are valuable...

Spot-on. I've been able to do many different things in this industry just by being likable, responsive, and observant. Asking why smart(er) people do X and really understanding helps you snowball your skills into bigger and better roles.

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Oct 18, 2018

It's neither here nor there, but to the OP, both your answers are complete horseshit.

Oct 18, 2018

Yeah I was hoping to get some people riled up with those answers but no one even noticed and the thread was really positively received. I'm a total failure

Fuckin my way thru nyc one chick at a time

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Oct 24, 2018

CoStar - Research associate

Aggregating information for the sake of aggregating information.

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Oct 27, 2018
TheDebtStar:

CoStar

took the words out of my mouth

Oct 18, 2018

Another one of the worst jobs you can have is developing affordable housing. Unless you enjoy being shot by your tenants, then it's one of the better jobs out there.

Fuckin my way thru nyc one chick at a time

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Oct 24, 2018

.

Oct 18, 2018

I think it would be a good first job, but I reject the premise of affordable housing. Program-based affordable housing allows jurisdictions to temporarily circumvent the law of supply and demand, only to find out later that the law is immutable and that you can't cap construction and "bribe" immutable economic laws with affordable housing programs. You will create cities for the rich and the poor and the middle class will leave for the suburbs. This continues to happen all over America.

Oct 18, 2018

Yeah agreed @Ozymandia what do you think about skankhunts comment

Fuckin my way thru nyc one chick at a time

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Oct 27, 2018

No such thing as a bad place to start as your first
Job in the RE field.

Learn as much as possible and make the best out of it to your advantage. As long as you hustle, you'll always find a way to end up at a better position. You just have to start somewhere and get your feet wet.

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Oct 27, 2018
yayaa:

No such thing as a bad place to start as your first
Job in the RE field.

Learn as much as possible and make the best out of it to your advantage. As long as you hustle, you'll always find a way to end up at a better position. You just have to start somewhere and get your feet wet.

there is some truth to this. You might not network your way into a $275,000 job at Ares in a 3-year span but over time I think the people who network and push for better things figure out a way to do pretty well. Sometimes crazy well despite starting in a crappy place.

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Nov 2, 2018
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Nov 30, 2018
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Oct 12, 2018