Real Estate Career Paths
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: Trammell Crow Company, Grubb & Ellis Company, CB Richard Ellis, Capstar Commercial
Average Salary: $75,000 per year
CONSTRUCTION/ PROJECT MANAGEMENT - 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, 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