What's going on, guys? Long time no see. I've started to post a little more the past few weeks because frankly, things are slowing to a crawl in my world - both in my current role and what I've been trying to put together next. Rates are ugly, offers are uglier, new money seems to be pencils down, and it's looking like the rest of the year at the very least is going to be pretty slow.
I'm interested in seeing if other people are going through the same thing, and if so, how everyone is spending their time at work at the moment.
9 am - Fill out CA
9:30 am - Get access to data room
10:00 am - start underwriting
1:00 pm - get done underwriting with a price target
1:30 pm - reach out to the broker mentioning our expected PP which we believe is aggressive and above market
2:00 pm - Broker emails back saying seller needs a 3 cap
2:01 pm - take a big *sigh*
2:02 pm - scroll espn and WSO
4:00 - pretend to do more work but mainly watch re-runs of the Office
5:00 - leave
Yeah man the hours in the office have been pretty damn different. I stroll in at 9:30 and leave between 4:30 and 5:30 with regularity. I remember it wasn't too man years ago a day was more like 8 to 8. I've had to pick up some hobbies just to not be bored out of my mind.
Yup its rough out there. Lots of buddies that lost their jobs. Just be thankful we are still collecting a paycheck.
how much of this change is because of the market and how much of this is because of your higher seniority now. pretty curious to know how your career changed
How do you underwrite deals so fast? I want to learn.
Not the guy who responded but it's easy when nothing pencils ;)
I can underwrite a deal in 3 hours fairly easily. Just need to look at some comps, adjust for taxes, and project out. Most models just have standard inputs. Most of the time I can do it in an hour, but as CRE said above, you dont need alot of time because nothing will pencil anyways.
UW off-market and blasted deals. 25% off guidance on either one. Submit the offer. Lose in rounds 1-3. Rinse, repeat.
Look at land deals. See above.
Switched allocation strategy from equity to pref, mez and bridge lending. Been pretty busy, lot of rescue capital being deployed.
Can you give any insight into range of terms on the offers y'all are putting out?
Twiddling thumbs in debt origination world. Continue to reach out to developers / construction take-outs & show them cash-in scenarios with the ultimate recommendation being to sell. I don't have it in me to peddle high-octane bridge or pref/mezz that is reliant on lower rates in 12 months.
Focused on asset management / strategy for existing assets.
The acquisitions pipeline is robust but not actionable. The structures / pricing don't work unless there is a highly motivated seller.
Talk to lenders to see if they need "help" with impaired loans on the books.
Circle jerk with equity partners about the market.
Playing a lot of golf with folks in the industry. Handicap is down 3 strokes in 3 months. I still suck if anyone cares.
From the bank debt perspective - I have both origination & asset management responsibilities, and the latter has unsurprisingly become the bulk of my time. 3+ hour long conference calls going through all office loans, construction loans, floating rate bridge loans, etc. Re-evaluating our risk ratings. Reviewing quarterly loan reports. Documenting game plans for upcoming maturities. Following up with borrowers for past-due reporting and compliance certificates. Gearing up for audits from the OCC and regulators. Lot's of eyes on our CRE portfolio (especially office) from top of house, investors, analysts, regulators, etc.
On the origination front, lot of killing deals from brokers immediately. For deals that come directly from clients, a lot of delivering the same message over and over. That is, not considering new loan opportunities unless we have solid ancillary non-credit business with you already (deposits, treasury, capital markets, wealth) and we can get more of that non-credit business in conjunction with your loan request. That narrows the pool a lot. But for good relationships we are still closing deals, which helps keep things relatively exciting.
You forgot to mention the part where you call all your borrowers and ask them to top up their already astronomically bloated interest reserve (because scrutiny and stuff or whatever other bs reason) and then spend weeks fighting about it just to start the same cycle again for next months requisition. Thanks for letting me vent, and yeah can you guys please cut that shit out. Thanks lol
Price multifamily deals well below guidance. Read every NFL article known to man. Question my career choice and if there’s going to be big money in commercial RE ever again or if it’s going to be coupon-like multifamily/NNN forever. Wonder if I should’ve done IB.
Days are crawling by.
I’ve been here mentally.
I was in acquisitions for 5 years and just pivoted to CorpFin a month ago (…so I feel like I can be more objective about my thoughts), but it seems like the RE industry is now too mainstream and has become too institutionalized to the point that value add/arbitrage opportunities are few and far between. Even regular “common folk” are much more savvy about real estate these days, so it’s hard to scoop up a deal. Don’t get me wrong, there are deals out there, just much fewer of them nowadays, and regardless of interest rates I don’t see that changing in the future due to the high demand of money chasing deals.
Not saying I’m correct, and maybe you were being tongue-in-cheek, but was interested to see if you had any additional insight behind your thoughts…
I’m pretty busy still In affordable housing underwriting.
Lots of deals in pipeline…a lot of them are being pushed out, but some are being dropped because of rates.
Still not nearly as busy as beginning of this year.
We’ve had some lay offs
The past few months have been rough for me, been working 60-70 hours a week whereas I normally work like 50.
Am an analyst on the debt side so I spend my day:
underwriting deals that have no way of going through. We still have deal flow but a lot less than last year so am able to spend more time looking at the portfolio.
managing assets that have a high probability of being troubled (try to start discussions with Borrower)
workouts / restructure defaulting loans
listen to Borrower’s whine about liquidity issues and having their equity wiped out while telling me they cannot refi
This is such a good thread! On my side - a lot of underwriting of debt deals that the Partner kills in 2 minutes. It seems that we are doing the work just to justify our existence. Don’t feel like I am learning much, but I am trying to use the free time to do breakfast meet ups with ppl in the industry & head hunters (hope to be able to jump to another shop once the hiring picks up).
Busy as heck, but not with transactions. Mostly working out defaulted borrowers in our B-Piece investments and working out defaulted tenants in our buildings. Selling a few properties here and there to clean up the portfolio but nothing huge. Lots of operator transitions in the senior housing portfolio.
Not glamorous, but I'm very thankful to have a job.
9AM - wake and bake
9:15AM - chug cold brew and make breakfast
10AM - comb LinkedIn and SelectLeaders for new openings
12PM - workout and lunch
2PM - email/call my network
3PM - cry
5PM - brain storm side hustles
Pretty much the same except without the wake and bake, it makes me anxious when I'm unemployed
Unemployed? :(
Eh by choice/relocation overseas. In a groove with the search but not a whole lot out there in terms of development analyst roles.
It’s been so slow to the point I take 1.5 hours at the gym during lunch and no partner bats an eye. I even brought in a book because I’ve read every WSJ OpEd piece, ESPN article, and immaculate grid to date. Thankful I’m getting paid lol but it’s been brutal.
Genuinely curious how almost everyone in this thread has so much leisure time. Maybe originations/deal teams are overrepresented in this thread. I'm in asset management (equity) and we're as busy as ever monitoring cashflows, working with lenders to refi, strategizing leasing with brokers/doing deals, budgets, etc. We're a small team and only work 9-5 so maybe the work isn't all that much but damn, if it's this slow for a lot of you, I'm sorry to say that layoffs (generally) look imminent for a lot of companies.
Surprised too, only firm I knew similar to this was a smaller family office where there were the partners and only an associate on the acquisitions side. He would go to the gym in the middle of the day for an hour plus and come in at 10am. It's like how are you still working here, but he was the only junior so not much they could do and firm had an ok rep.
At my current firm it's been busy with internal presentations and working out issues with existing properties.
That associate is my role model
Genuine question - what do you expect development and/or acquisitions people to be doing right now?
Procasturbate
Wake up
Read news articles
Browse job postings
Plan a DD trip on assets I am not going to buy, but strategically plan these trips to help with weekend plans
Plan a trip overseas incase I do get fired and where I would go in my free time
Get updates on deals I didn't buy and who did buy them
Take a nap
Hit the gym twice a day to keep may sanity
Yeah I don't do anything
Broker on industrial team:
9:30 AM - get into office, make coffee, read newsletters
10:00 AM - nail down checklist of to do's for the day, reply to emails from yesterday/morning
11:45 AM - leave for 1.5 hour lunch with team
1:30 PM to 3:30 PM - do what actually needed to be done (send surveys, data room access, tours, calls)
3:45 PM - go home and nap LOL
Barely any new loan origination on balance sheet. Busy negotiating loan mods/extensions. Trying to have the borrower paydown as much as possible. Also trying to manage office loans in the portfolio that are not performing.
That sounds like AM work, get out of here with that
It basically is AM work...I've even heard of some banks actually moving some of their BS origination/UW guys to more of AM type of roles. This is in addition to the shops that laid their BS guys off. Not many banks have increased their BS limits this year, and there is a significant amount of capital that is not coming off the books and getting recycled. The only accounts that've increased their lending volume on the BS has been the private credit folks for the most part - And they typically have appetite for more of the higher yielding/transitional stuff, not the traditional stabilized stuff that banks would previously eat up.
This is also why you see some banks selling money good, performing loans currently sitting on their books - They need capital in order to make new loans.
I'm not sure how much of a pulse you have on the industry, but guessing from your response you are either tangentially involved or not involved at all.
GSE folks, how is it looking lol. Contemplating your long term plans?
Current day to day working for an agency lender:
9:00am - Log on and read news articles
11:00am - Do the one thing I needed to do for the day
12:00am - Lunch time
1:00pm - Continuously refresh LinkedIn for new jobs
3:00pm - Read NFL articles/try and find the best sleeper known to man to pick up off waivers
5:00pm - Log off
No one here at a HY debt fund? We are still putting money to work. It’s slow but not unbearable. Doing deals at lower LTCs and still hitting 12-15% IRRs (levered or pref/mezz). Then there’s the note sale / rescue Capital world for the equity guys… I think things are very interesting / fun right now
Genuine question, can you give some examples of the poor desperate bastards that are taking this money right now?
Every time I hear the word pref I just hang up the phone at this point, which is almost every call smh.
We're very fortunate in that most of our deals are unlevered and our fund has 7 years left so we'll just keep chillin' till yall put your big boy pants back on
On the development side, in many cases it’s top sponsors. S+525 for a 60-70% LTC loan is worth it to some groups. You’ll be delivering your project when no one else is.
For existing properties, some of these opportunities are created by existing lenders accepting a discounted payoff. Or sponsors being forced to refinance due to being at fully extended maturity on a CMBS loan but still having equity to protect. Also debt funds are providing acquisition financing to opportunistic groups who are buying deed-in-lieu note sales. There are a lot of scenarios where it makes sense.
And because banks have pulled back massively, lenders who actually want to lend are seeing a ton of opportunities.
Multifamily acquisitions - working on new deal closings and a few refis. Past year has been busy. Expect to slow down by the holidays, but plan to be aggressive in Q1 24.
Work in acquisitions and I have reviewed three/four opportunities this year. Insanely slow, especially as I work in a niche asset class. As I sit in-house in the operator (PE partner sits in the GP as well but I look after the UK while they primarily work with the US) I am doing asset management, investor reporting and strategic operational work.
I love the fast pace and challenge of acquisitions so honestly my job currently is the worst. Operations is literally the most tedious, boring and frustrating role. Combine this with stressed investors and lenders it is literally all of the worst parts of a CRE role in one.
I wake up unmotivated. I log on to a load of shit from people who I am surprised managed to get dressed (let alone get to their desk). I search for a new role while crying. I look at MBAs and realise there is no way I could ever afford to do one. Repeat.
Still work 60-80 hour weeks but now doing awful operator/investor requests that make me want to die.
Just curious, what do some of those requests look like?
The requests I'm really struggling with are helping the internal teams, rather than anything from investors, lenders, or partners. Dealing with internal teams is quite honestly terrible.
Within the Operator, no one checks their work or even tries to reconcile numbers. It's insane when you 'open the hood' how little cohesion and understanding there is. Dealing with heads of departments to try and get buy-in to fix their awful team structure and processes is met with, obvious, aggression and denial. You know that without these changes it isn't going to get any better and you're the one responsible for reporting to the Board, but you have no 'power' to force anyone to do anything. You end up burdened with the knowledge of the truth with no power to change anything.
This leads to realising the numbers I had been given in the past came from these teams and processes. This has honestly given me a lot of sleepless nights. I genuinely don't understand how anyone can manage a business in this way. I think it is honestly how most operators run their businesses. It is just chaos with the hope of something aligning when reporting. Now when we are drafting board packs/investor reporting I find myself in two states:
1) Try AGAIN to fix down a final number and push teams to reconcile (and do their jobs)
2) Fatigued and completely unmotivated just giving the numbers as they come hoping that a sharp-eyed investor will question and we can get real pushback to change something (although the fear of losing my job in this process normally takes me back to number 1)
What's the asset class, if you don't mind me asking?
GP developer, mostly office for the last decade:
7:30 - 9: work out, shower, walk to the office
9: acquisitions meeting where we discuss every value-add 2-story R&D or office deal that has no demand and doesn't pencil
10: snack, read BizJournal, FT, etc.
10:30 - 12: work on presentation to our lender notifying them we are underwater on an asset, asking for workout options
12-1: sad salad at the desk
1 - 3: turn comments on lender workout deck
3 - 4: send networking emails
4 - 4:30: browse WSO, SelectLeaders, LinkedIn....cry
4:30 - 5:30: turn more comments
5:30: go home
rinse, repeat.
Debt brokerage. Haven’t worked on a true first mortgage debt assignment in almost 12 months. Everything I get put on has been for LP equity with 0% probability of success.
what shop?
I'm currently reviewing everyone's schedules, and it's got me reflecting on the value of having a relaxed 9-5 work routine. Have you ever considered embracing a less stressful work lifestyle, where you can leave the office earlier and have more time for activities like hitting the gym? Instead of constantly chasing success and burning out, it might be a great opportunity to detox, recharge, and invest in yourself occasionally.
I'm genuinely excited to see so many people here adopting a more balanced and normal-looking schedule, especially during this challenging period for the industry. There's absolutely nothing wrong with it. If you're fortunate enough to still have a job, why not take a moment to relax and appreciate your employment? It's a chance to find happiness in the present while continuing to move forward.
I think a healthy amount of paranoia in a forward facing real estate role is healthy. There is a sense that if you are not filling every day to the brim with work, you might be expendable. Some of that is true and some of it is obviously not. More companies can afford to carry its workforce during leaner times (very industry dependent however, and brokers work on commission).
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