Investment Sales Broker
An investment sales broker represents a real estate investor looking to buy, sell or finance a real estate asset. Investors hire these brokers to provide strategic advice, market knowledge and access to capital. However, many owners, such as REITs (Real Estate Investment Trust) have their own acquisition and disposition groups in house. Investment sales brokers deal with clients who are very sophisticated and encounter complex financing issues. Successful investment sales brokers have a complimentary mix of analytical skills as well as interpersonal skills. Investment sales brokers tend to work in teams with those new to the field holding the position of associate. Investment sales brokers are high profile within the real estate industry usually commanding attractive salaries mostly based upon commission. |
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Example
Firms Eastdil (www.eastdil.com)
Marcus & Millichap (www.marcusmillichap.com.) |
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Real Estate Advisory/Investment Management
Institutional investors, such as pension funds and insurance companies, as well as wealthy individuals often hire professional advisors to direct their real estate investments. These advisors/investment managers typically manage a series of private equity funds or separate accounts dedicated to investment in real estate and real estate related assets. An advisory career starts at the associate level where valuation analysis is performed as well as investor reporting. Investor reports entail such metrics as local market conditions, taxes, valuation, local cap rates and recent sales. Above the associate is the portfolio associate (PA) also known as an asset manager. The portfolio associate is responsible for interacting with the property manager to monitor the status of the investment. Portfolio Associates make decisions on smaller capital expenditure decisions, discuss acquisitions within their portfolio and begin to experience contact with the client. Above the Portfolio Associate is the Portfolio Manager. The Portfolio Manager has complete control and responsibility over the entire collection of assets. This includes making decisions on acquisitions, dispositions and is in constant contact with the client. MBA graduates hired by advisory firms should expect to make between $85,000 and $95,000 excluding bonuses. |
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Example Firms
RREEF (www.rreef.com)
LaSalle Investment Management (www.lasalle.com) |
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Real Estate Investment Banking
Many investment banks have groups dedicated to real estate which combine interests in real estate with investment banking. Some of the products that are produced in real estate investment banking include residential mortgage backed securities (MBS), collateralized mortgage obligations (CMOs) and commercial mortgage-backed securities (CMBS). Entry level positions are similar to that of investment banking with the entry level position of analyst. Analysts are typically responsible for valuation work, financial modeling and assisting in preparing deal memos. Above the analyst is the associate. Associates are responsible for the analyst’s work, handles communication to the deal partners and reports to the Vice President. Vice President’s maintain a supervisory role and are responsible to bring in real estate deals. Above the Vice President is the Managing Director (MD) whose responsibilities include business development and are responsible for all final decisions. Compensation for an analyst can range from $60,000 to $80,000 excluding bonuses. Associates typically see a base salary around $100,000. Vice President’s are in the range of $150,000 to $200,000 and Managing Directors have a potential in the millions and typically have a personal equity stake in the deals. |
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Example Real Estate Investment Banks
Morgan Stanley (www.morganstanley.com)
Goldman Sachs (www.gs.com)
Lehman Brothers (www.lehman.com). |
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Development
Development involves managing labor, managing money and monitoring construction crews. The developer is the person(s) responsible for creating a concept and bringing it to reality. New hires typically start as analysts. Analysts typically examine project returns, market research, leasing activity, etc. Associates are above the analyst and are assigned to a specific project and typically only that project. Associates are also responsible for financial analysis but additionally have contact with the investors, attorneys and the design team. The next level up is Vice President. The role of the VP is to accept ultimate responsibility for the success/failure of a project. The VP is involved in all aspects of the project including leasing and potentially the sale of the property. Above the VP is the Principal. Principal’s typically contribute personal equity to a project, provide development concepts. Base salary compensation for the various levels of development are as follows: Analysts: $40,000 to $50,000, Associates: $80,000 to $90,000, Vice President: $150,000 and Principals can make millions. |
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Example Firm:
Hines (www.hines.com)
Tishman Realty and Construction (www.tishman.com)
The Trump Organization (www.trumponline.com) |
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Property Management
Property managers are responsible for the day-to-day management of real estate assets. They ensure that tenants are satisfied, the building is in good condition, rent is paid and that rent reflects market conditions. Property managers deal with issues relating to leasing, construction, tenant relations and market analysis. Since the property manger typically is involved in lease negotiations with the leasing agent a real estate license is required. The typical entry level position for this field is the assistant property manager reporting to the property manager. Within the field of property management are several obtainable designations. Certified Property Manager (CPM) is specific to retail management and by obtaining a real estate license, completing classroom instruction and through 5 years experience in real estate. For office and industrial properties, a Real Property Administrator (RPA) designation is obtained by demonstrating 3 years of property management experience and by completing classroom training. Typical assistant property managers can expect to make $30,000 with property mangers making $70,000. |
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Example Full Service Firms:
Cushman & Wakefield (www.cushwake.com)
CB Richard Ellis (www.cbre.com)
Trammel Crow (www.trammelcrow.com) |
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Commercial Real Estate Brokerage
Commercial property brokerage offices employ sales associates who market office buildings, hotels and many other types of commercial real estate. Typically commercial real estate brokers specialize in a particular property type such as apartments, retail, office buildings, hotels, shopping centers or industrial buildings. Within real estate brokerage there are two types of brokers. Those whom represent the tenant and those whom represent the landlord. |
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Tenant Representation
A tenant rep represents clients searching to lease or to buy a real estate asset. A large part of being a tenant rep is networking and developing your own client base. Typically tenant reps find themselves not only competing in the marketplace for additional clients but also competing against co-workers within the same office. When starting in this field a junior broker is typically paired with a senior broker to perform some of the legwork required to successfully close a deal and allows a training platform by which the junior broker can learn from a senior broker. Compensation for these positions is based upon commissions which are a specified dollar amount per square foot which is divided among team. |
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Leasing Agent
A leasing agent represents the owner to show and lease vacant space and to negotiate property leases. In order to be an effective leasing agent market data must constantly be collected to obtain fair market rents for a client’s property. To keep abreast on the latest market data a leasing agent must continue to network especially with tenant reps to continue to learn about the evolving market needs and conditions. Leasing agents are typically compensated with a base salary as well as a performance based commission. A tenant rep position is more opportunistic and is therefore more lucrative than a leasing agent. Leasing agents are required to have a salesperson license and typically a college education with an understanding of finance. |
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Example Full Service Firms:
Cushman& Wakefield (www.cushwake.com)
CB Richard Ellis (www.cbre.com)
Jones Lang LaSalle ( www.joneslanglasalle.com ) |
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Residential Real Estate Agents/Brokers
Residential real estate agents assist buyers and sellers through the process of purchasing and selling residential properties. An agent’s compensation in this field is fee based. Total fees collected are typically in the range of 5% to 6% of the sale price which is split between the buyer’s agent, seller’s agent and each of the sponsoring brokers in which they are affiliated with. In order to become a residential real estate broker you must hold a real estate license from the state in which you operate. For additional licensing information you can visit the National Association of Realtor’s website at www.realtor.com. Although a college degree is optional in this field a strong set of interpersonal and networking skills is required in order to find success in this field. Since compensation is based upon commission an accurate prediction of starting salaries is difficult however if a starting agent works full time and is proficient an expected salary for the first year could be as high as $80,000. |
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Example Firms:
Century 21 (www.century21.com.)
ReMax (www.remax.com) |
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Real Estate Appraisal
Real Estate appraisal firms provide third party estimates of a property’s most probable sales price. Appraisals are used for property sale, purchase refinancing, tax appeals and monitoring the value of a real estate portfolio. To become an appraiser you must become a licensed professional. Requirements to become an appraiser varies by state. College education is not required. For more specific requirements go to www.appraisalinstitute.org. Experienced appraisers can earn up to $75,000 and up. |
