Words of Wisdom for getting a Job in Real Estate

Graduate Real Estate Society

The process of getting a job in real estate is not as structured as getting a job in say, finance. Real estate firms typically do not schedule conventional on-campus interview schedules through the Ford Career Center (although the FCC staff is working hard to change this). This is because real estate firms are typically smaller than other firms on-campus and they do not know their summer or permanent hiring needs until April, May or later. Thus, you will usually only see large national firms on the schedule.

To get a job in real estate, you have to go out and find opportunities. You want to meet as many industry professionals as you can and put your name and resume in front of them, so that if an opportunity comes up, you will be one of the first people they call. You want to go to the Graduate Real Estate Society Calendar and go see real estate speakers on- and off-campus. GRES members can usually attend these events free, in exchange for doing a little work at the event. Remember, real estate is a very "relationship" oriented business where connections really make the difference.

It is also a good idea to sign up for the Mentoring Program in order to make contacts and find out from them other names of people that they think you should talk to. This way you can find out more about these firms and about real estate in general so that you can talk intelligently in an interview.

The Center for Real Estate Finance can also be a great job resource. They send emails to the CREF membership list with job announcements that real estate firms send the FCC.

The main point is that you have to make your own job happen in real estate. Although the Ford Career Center and the Center for Real Estate Finance will do all they can for you, nobody will hand a job to you on a plate. The more active you are, the better job you will eventually get.

If you are seriously considering working in real estate, it is a good idea to start by working toward your Texas real estate license. Whether you decide to practice residential or commercial real estate, it does not matter - there is only one license. I have found that most firms will take you a lot more seriously if you can demonstrate to them that you are working toward obtaining your real estate license. For more information about the Texas real estate license, please visit the TREC website at http://www.trec.state.tx.us/.

I. INTRODUCTION

There are currently more than 5 million people in the United States employed in identifiable real estate fields such as title insurance, construction, mortgage banking, property management, real estate appraisals, brokerage and leasing, and real estate development. In addition, many were engaged in corporate real estate and in real estate lending in commercial banks, savings and loans, and insurance companies where their jobs are not included in the real estate sector. Over a third of the world's wealth is tied up in real estate. Real estate is collateral for mortgages and a large amount of financial assets. As important as the field of real estate might be, it is also worth recognizing how interesting the work in this field is. Real estate professionals are tied to the development of our society in a very direct way and participate in decisions that will shape the way we live for centuries. Work in real estate is personally rewarding, ever-changing and challenging. Take some time and consider your potential in the field of real estate.

The Good about a career in Real Estate.

High Income Potential
Firms are starting to need MBA's
Work Close to Home
Flexible Hours
Opportunity for Growth
Be Your Own Boss
Investment Opportunities
Each Day is Different
It Can be a Lot of Fun

.and the Bad about a career in Real Estate

It Can Take a While to Begin Earning Money
Income Can be Irregular
It Can be an Emotional Roller Coaster
It Is Hard Work
You Have to Get Out and Find Business

II. CAREERS IN REAL ESTATE

ASSET MANAGEMENT - Asset Managers are one step above property managers but below portfolio managers. They can manage a number of properties. They supervise leasing, approve property plans and budgets, periodically value the properties, perform buy/sell analyses, decide on renovations and capital improvements, decide how to position properties in their respective markets, and hire and oversee property managers.

Example firms: MacFarlane, RREEF

BROKERAGE & LEASING (COMMERCIAL) - Commercial property brokerage offices use sales associates who market office buildings, hotels and many other types of commercial real estate for brokers. Commercial real estate sales people usually specialize in a particular property type such as apartments, retail, office, hospitality, shopping centers and industrial plants. Most of the large commercial brokerage companies in the United States provide a great deal of local market data and research in order to be able to service a cadre of sophisticated clients who are making multi-million dollar investment decisions.

Example firms: Lincoln Property Company, Trammell Crow Company,

Average Salary: $75,000 per year

CONSTRUCTION/ PROJECT MANAGMENT - Are you willing to work hard and take risks to develop new properties? Then a career in real estate development may be for you. You can enter this business working for another developer, moving up to construction manager, or you can strike out on your own, starting with some smaller transactions. Good developers are results-oriented and know how to get work on time which involves managing labor, establishing time estimates, getting appropriate equipment operators and construction crews.

Example firms: Lincoln Property Company, Trammell Crow Company,

Average Salary: $60,000 per year

PROPERTY MANAGEMENT - Property management involves maximizing net revenues or productivity of property based on managing rental flows, tenant retention, managing and contracting property operation. Property operation includes cleaning, maintenance and repairs, paying utilities, property insurance, property taxes and so on), reporting to owners and overseeing resident or on-site managers. Property managers are usually involved in leasing and facility management decisions. Those that manage several properties and are involved in acquisition, disposition, financing and portfolio management decisions are known as "asset managers." Most property managers start as on-site managers, working closely with tenants.

Example firms: Lincoln Property Company, Trammell Crow Company,

Average Salary: $40,000 per year

PORTFOLIO MANAGEMENT - Portfolio managers (or pension fund advisors) work for investment and pension fund clients who have large real estate holdings. Their services include property acquisitions, portfolio and property management, information services, etc. They decide how to structure a client's real estate portfolio to reach given return/risk goals, acquire the necessary properties, hire asset or even property managers, and measure portfolio results. They often have an asset management group as well and can even have a property management group.

Example firms: RREEF, The Yarmouth Group

APPRAISAL - Appraisal firms are hired to value properties for sale transactions, portfolio valuations, and sometimes to assist in litigation. They use the three valuation methods taught in BA280 of income capitalization/discounted cash flow, replacement value, and comparable sales. Appraisal is a fairly structured career path usually starting after undergrad that eventually leads to exams for professional MAI licensing.

Example firms: Hanford/Healy, Arthur Andersen's appraisal group

COMMERCIAL BROKERAGE - Commercial brokers act as middlemen by finding tenants and/or buyers of real estate projects. They are closely involved in the negotiations of leases or acquisitions. Brokers must be familiar with property values, tax, and other legal regulations. They are compensated by commissions based on transaction values.

Example firms: Grubb & Ellis, Colliers, Cornish & Carey, Cushman & Wakefield, BT Commercial

MORTGAGE AND COMMERCIAL LENDING - Commercial lending institutions originate real estate loans for their own balance sheets. These institutions include banks, S&Ls, and life insurance companies. They also workout problem loans, handle foreclosures, asset management of foreclosed assets, and dispositions of foreclosed assets.

Example firms: Bank of America, Wells Fargo, Citigroup, Guaranty Bank

CONSULTING - Consulting firms do a variety of tasks. They are hired to perform site analyses, market studies, financial and economic feasibility studies, appraisals (see above), site dispositions, and public economic impact analyses. They can also perform due diligence for portfolio sales or securitization, advise institutions in real estate workouts, consult for real estate litigation, advise pension funds, and advise real estate owners in raising financing or forming REITs.

Example firms: Sedway Group, Arthur Andersen, PricewaterhouseCoopers, EY Kenneth Leventhal, The Roulac Group, Lend Lease Rosen, Hanford/Healy, Keyser Marston

CORPORATE REAL ESTATE - Corporate real estate departments develop strategies for the real estate holdings and real estate needs of large corporations (i.e. lease versus buy analysis, etc.) as well as manage the firms' real estate assets. They can be involved in development as well as acquisitions and dispositions.

Example firms: Cisco, Gap, Sun Microsystems, Cadence, Applied Materials, Hewlett-Packard

DEVELOPMENT - Developers direct and take equity interests in new real estate projects. Specific responsibilities include property and site selection, obtaining all legal entitlements and financing, as well as supervising design and construction. There are both commercial and non-profit developers. Many developers have also branched out into property or asset management.

Example firms: Lincoln Property Company, Catellus, BRIDGE Housing, Centex, Greenbriar, Legacy, Reynolds & Brown, Shorenstein, Wilson Cornerstone

INVESTMENT BANKING - Investment bankers perform services such as the securitization of real estate equity (equity REITs) and debt (mortgage REITs, MBS, CMBS, etc.) - selling pieces of equity and debt interests in real estate in the capital markets. They also perform investment acquisitions, and underwrite large real estate portfolio transactions.

Example firms: Lehman Brothers, Merrill Lynch, Morgan Stanley Dean Witter, PaineWebber, Robertson Stephens, Banc of America Securities

MORTGAGE BANKING - Mortgage bankers originate real estate loans for investors, such as small life insurance companies, who lack the amount of funds or expertise to do their own loan originations. They essentially act as banks, but lend other institutions' money while conforming to the institutions' underwriting criteria. They then typically service these loans for the investor. Residential mortgage bankers originate single family home mortgages while commercial mortgage bankers originate mortgages on income-producing properties.

Example firms: Trowbridge Kieselhorst

REAL ESTATE INVESTMENT TRUSTS - REITS are self-contained property operating companies. They own a portfolio of existing property and typically own land on which they undertake new development so that the cash flow to stockholders can grow. They perform asset management, development or acquisition of new properties, accounting, and corporate finance functions.

Example firms: AMB, Bedford Property, Spieker Properties, AvalonBay, ProLogis

IV. REAL ESTATE JOB SOURCES

Many factors influence the beginning salary of a new undergraduate or an MBA student. Included in these are your work history (i.e. internships), your emphasis area, and your geographical preferences. Undergraudates Real Estate majors currently enter the job market at a beginning salary of $20,000 to $45,000. MBA's starting base salaries generally begin at $65,000/year.

Real-Jobs, Jobs for Commercial Real Estate Industry, www.real-jobs.com.
Real Estate Job Store, Jobs for Commercial Real Estate Industry, www.realestatejobstore.com.
Access UT - Some of the real estate jobs that are currently posted are with EQUIS, REOC, Avigon Realty, The Situs Companies, Jones Lange LaSalle, USAA Real Estate, Keller Williams and Smith Realty. accessut.utexas.edu/students.
Finance Jobs in the Money - Another good source for real estate finance jobs. Some of the current job opportunities include Merrill Lynch, Fannie Mae, Freddie Mac and KPMG. www.jobsinthemoney.com.