CRE Analyst Quick Hits (5/17/24)

Welcome to Quick Hits, a weekly roundup of commercial real estate news and CRE Analyst updates for our alumni and network...

Contents

1. Special topic: 30 Tips for Recent Graduates
2. Headlines
3. Alumni grapevine
4. Taking the pulse of the CRE job market
5. Jobs of the week

30 Tips for Recent Graduates

Entering today's real estate job market...

Recent graduates face a very different real estate job situation than their not-so-distant predecessors. High-profile starting jobs paying $125K+ and an industry unemployment rate that rounded to zero were common a few years ago, but the market has downshifted meaningfully.

Our perspective...

We deal with thousands of early-career professionals and have immediate access to a very engaged teaching team (which includes 20+ of the brightest young talent in commercial real estate from across the country).

Candid advice for recent grads...

We polled our teaching team for the advice they'd offer to recent graduates, and here's what they said (in no particular order).

1. Get to a city: We estimate that 40%+ of all commercial real estate jobs are in NYC, LA, Dallas, DC, and San Francisco. You can have a great career in another city, but smaller-city talent tends to be more general with fewer chances to leverage concentrated talent.
2. Invest in yourself: The best way to get ahead in a few years is to invest in yourself now. Forget self-help books and real estate trade rags, we're talking about aggressive investments in your skills and knowledge (requiring meaningful time and money).
3. Don't say you want to be a developer: Most recent grads say they want to be developers, but most developers don't hire recent grads. And current development economics are challenging.
4. Be mindful of your inexperience: Successful professionals probably know a lot more than you think. They also probably make a lot more money than you think. You don't have to worship them (nor should you), but when in doubt, defer to experience. In ten years, you'll almost certainly look back and say you had no idea what you were doing in 2024. ...and that's okay.
5. Excel at the mundane in the near term: Dominate the stuff that others don't want to do. Don't be 'too good' for anything in the early years. The threads that bind our industry are much more obvious in hindsight, and many of them start with mundane early-career tasks.
6. Plant seeds with potential mentors: Having coffee with a big-named real estate player won't likely put your career on a rocket ship. However, experienced professionals often like investing in winners. Make it obvious that you're a winner. Play the long game. Build connections over time instead of casting an unreasonably wide net.
7. Don't worry about $ in the near term: Most successful real estate professionals don't make life-changing money until their 50s or 60s. They made good money in their 30s and 40s. But they typically made next to nothing in their 20s. When it comes to starting compensation, don't value that extra $10-20k over skills that will put you where you want to be in your 30s.
8. Be extremely organized: One of our team leaders recently saved his firm $2.5 million by not missing a deadline. How'd he do that? He takes meticulous notes and revisits them. This associate's reliability is off-the-charts due to his organizational skills.
9. Work for people who know what they're doing: This is a hard one because everyone with 20+ years of experience looks like they know what they're doing to newcomers. You can't ask someone "Are you good at this?" and expect to get a callback. But you can piece together track records. Were they profitable? Did other parties continue to work with them?
10. Understand why people need your work: Rather than just moving tasks off your desk, know why your tasks are needed. What are decision-makers looking for in your work? How will they likely respond when you give it to them? Anticipating questions is a valuable skill.
11. Dummy check your work: Everyone has turned in work with errors, but do everything you can to avoid this. Before hitting "send," walk away, review your work with fresh eyes, and double-check your logic/findings. Does it make sense from 10,000 feet?
12. Make your boss's job easier: What does your boss worry about? What are his or her strengths and weaknesses? Demonstrate your understanding by providing value without needing to be asked. This will make you indispensable and get you into better projects.
13. Be hyper-responsive: Respond immediately. Regardless of if it's 6 AM or 10 PM, respond. You don't have to provide an answer (yet), but letting your team know that you're on it goes a long way.
14. Bring excitement and a good attitude to your job: The best way to ensure that you won't get better assignments is to respond to mundane assignments with a lack of excitement. If people think they need to convince you to do your job, they'll eventually stop.
15. Get familiar with industry documents: There are four big transactions in real estate (sales, loans, leases, and joint ventures), and every deal is documented. Getting to know the 10-15 issues that drive each of these deals will make you more valuable to your team.
16. Follow the debt markets: What's the 10-year treasury rate? What's SOFR? What are commercial mortgage rates? There are only five types of lenders (banks, insurance companies, CMBS, agencies, and debt funds/MREITs), and it's easy to follow them. Debt is the sun of the CRE solar system.
17. Understand transaction trends: If debt is the sun of our solar system, sale transaction volumes are like tides. The tide was extremely high a few years ago. Now it's extremely low but coming in a bit. Knowing the general environment should inform your approach.
18. Do what is asked: Managers often complain about having to repetitively ask for tasks to be completed. Hard-charing analysts and associates are inherently confident, which is great. What's not great: "yeah yeah"-ing your boss and ignoring an assignment.
19. Be more formal than you believe is necessary: Don't FaceTime your boss. Don't text them voice messages. Don't wear halter tops to the office. Don't call your boss 'bro'. Don't go overboard on sharing the details of your weekend. Gen X and millennial managers often complain about your informality.
20. Ask good questions: Contrary to the popular adage, there are stupid questions. Asking them undermines credibility and promotes perceptions of laziness. Here's a stupid question: "What's a V lookup formula?" (JFGI) Another stupid question in this sample lease scenario: "What's a termination option?" (Read the LOI or the lease.) Here's a good question: "If we had to sell the building with the termination option in year five, what's that discount rate? 9% 10? Here are my estimated values in those scenarios."
21. Build a strong peer group: There's nothing better than a group of like-minded professionals who are more peers than friends and can share honest feedback and insights. This is where you ask stupid questions.
22. Learn to model: Learn how to model lease economics and build a pro forma DCF valuation, an amortization table, and a development model with a construction loan. Learn how to value a property in ARGUS Enterprise. If you don't want to take that big of a bite, then at least know basic financial formulas and how to format and organize models. Many free and nearly free resources can help you become a better modeler, which is table stakes in commercial real estate.
23. Prioritize strength-building over resume-building: You're probably not getting an offer from Blackstone, TPG, or KKR; most real estate applicants don't. But that's okay. These firms (or whatever other firm you think is real estate gold) may not have a great path for you. You need to find a place where you can leverage your strengths to build key skills. That may or may not be with a big-name firm. Obsession with brand names often leads to setbacks.
24. Plug into a trade group or two: Urban Land Institute , ICSC , and NAIOP are good places to get into the flow and meet industry players. Just be careful to avoid prioritizing networking over skill-building.
25. Help with tasks outside of your role when possible: Banish the phrase "that's not my job" from your vocabulary. You don't have to strive to be a utility player, but pitching in on top of your normal responsibilities (as long as you can manage them) is a great way to get ahead.
26. Find a team with good deal flow: Transaction activity is slow overall right now, but it's critically important to get reps. What's your path to get into the flow of transaction activity?
27. Know how your team (or your desired team) makes money: Sounds obvious but many young professionals simply don't know how their firms make money. Good exercise: Build the group's P&L. It doesn't have to be right and you don't have to show it to anyone, but it's helpful to be able to follow the dollars.
28. Understand how the firm fits into the capital markets: Our industry is driven by capital. Full stop. Is your shop an owner, developer, lender, broker, or consultant? These are all very different perspectives with very different drivers. But they all are affected by the debt and equity markets. Understand the connections.
29. Get the easy stuff right: Show up early, be polite, be easy to manage, don't have more than two drinks, dress professionally, etc. It's hard enough to separate yourself from the pack without sloppy mistakes.
30. Outwork your peers: If you just graduated, no one is going to pay you for your relationships, skills, or financial capital. You'll get hired if and only if an employer believes you can get sh*t done. Time is your only asset in the first few years of your career. Commercial real estate is extremely competitive, and--for the first time in many years--there are more job seekers than jobs. Forget about work-life balance and mental health days. You know what's bad for mental health? Being poor. Turn your time into skills, then turn those skills into money and flexibility, and then use that money and flexibility to improve your life and our industry.

Disclaimer: The tips above are opinions. We welcome additional tips and alternate perspectives.

Headlines

The trends and stories we've been following...

Data centers in perspective

Will the data center market be bigger than malls, storage, and power centers combined in 5-10 years? More on this sector's explosive growth here.

Fool's gold returns?

CRE-CLO sponsors promised double-digit returns by manufacturing mezzanine positions. But were those returns akin to fool's gold? See our take here.

Is "alternative" the new "core"?

Institutional allocations to office and retail are down significantly over the last 25 years. Where are they moving that capital: Industrial and alternative sectors. More analysis from Oxford Economics here.

Diving into office loan delinquencies

Many people think the GFC implosion happened quickly, but the financial crisis hangover lasted nearly five years in terms of office loan defaults. Office delinquencies seem to be on a similar steady march this cycle. Full post here.

Real estate fundraising: Show me the money

Blackstone dominated fundraising over the last few years, but BREIT was a big driver and BREIT's returns seem a bit overstated. More thoughts here.

Commercial lease scenario

Most people don't love diving into 100+ page leases, but the documents that define our industry are unavoidable. To make diving into documents more digestible, we build frameworks of the 10-15 drivers, define common perspectives on those issues, and identify them in documents. Here's a sample lease situation.

Alumni Grapevine

Congrats to Tyler Rentfro , a FastTrack alumnus, on his new role as Director of Acquisitions and Capital Markets at Henley Capital !

Excited for Desiree De Leon , a FastTrack alumna, on her recent move to Ridgemont Properties, Inc. , as an Acquisition/Development Analyst! Congrats!

Jordan Buck , FastTrack alumnus, team leader, and Capital Markets Analyst at 仲量联行 , recently assisted in securing a $108 million loan on a 13-property self-storage portfolio on behalf of 汉斯 and Trez Capital . Congrats on the closing, Jordan!

Taking the pulse of the CRE job market

Green Street (via Real Estate Alert ) recently surveyed real estate headhunters, and their findings closely match what we're seeing: Hiring is down, but (as is evident from the jobs below) many owners are looking to beef up their asset management teams.

Jobs of the Week

Associate / Asset Management / Greystar

Primarily focused on asset management but with the chance to help evaluate investment opportunities, working on Greystar's Thackeray fund team (multifamily and industrial). Comp is around $110K with about 50% bonus potential. If you have 4+ years of experience and are interested, reach out and we’ll get you connected.

Director / Asset Management / Invesco

Oversee investment management for a portfolio of high-quality multifamily assets in the Central and Southeast regions.

Director / Asset Management / Invesco

Manage a portfolio of Single-Family Rentals and manufactured housing assets across various markets nationwide.

Let us know if you're interested in any of the opportunities above.

Feedback

Email us at [email protected] with tips, feedback, leads, referrals, etc. Or DM us on LinkedIn. All feedback will remain confidential.