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I spent a lot of time talking with industry professionals when I was first starting out in commercial real estate to try to get ahead of common mistakes and plan out where I wanted to go, but I still ended up doing some things that I would do a lot differently if I could do things over again. And for people who want to be successful in commercial real estate as quickly as possible, there's a pretty predictable formula you can follow to make that happen by making a few key decisions early on in your career.
So, if you're watching this and trying to plan out next steps to get to where you ultimately want to go in the real estate industry, in this video I want to share four things you can do to drastically speed up your career progress and how each of these things can help you make that happen.
So, the first thing I would focus on if I knew I wanted to build a career in commercial real estate as quickly as possible is I would do everything I could to get to a big city in the US. The vast majority of commercial real estate job opportunities are located in New York, Los Angeles, and Chicago. And out of these three cities, it's really hard to beat New York if you want to succeed in this industry. New York is the most active commercial real estate market across the entire United States and home to some of the biggest capital allocators in the world. And with the price points of real estate in the city being higher than almost any other major metro, this also leads to some of the highest compensation packages throughout the entire industry. Of the 100 companies on the 2024 KE 100 report, which ranked the largest global real estate managers based on institutional capital raised over the last 5 years, 25 of these companies were headquartered in this market. Which also makes New York a magnet for people coming out of some of the top business schools in the country, including Wharton, Harvard Business School, NYU, and Columbia. This means that if you end up working in New York, even if you aren't coming out of one of these programs and you aren't working at one of these companies in your first job out of school, it's extremely likely that you'll end up building a network of people that are, which can open up a ton of doors for you later on in your career. Working on big deals alongside some of the smartest and hardest working people in the industry can put you way ahead of your peers starting out in smaller, less active markets. So, if you're up for the longer work weeks and more competitive nature that often comes along with being in a major gateway metro, getting to a big city as quickly as you can is one of the best ways to find success early on in your career.
Now, the next piece of advice I'd give to my younger self is something that feels counterintuitive, especially in your early 20s, and this is that doing hard things now makes things a lot easier later on. Some of the longest hours in commercial real estate are worked by analysts at top-producing brokerage teams in major gateway markets. And in these roles, you'll often be working a lot harder than your peers in most other parts of the industry. But even though these hours are really tough to manage at the time, if you could make it through three to four years of this and move into production in your late 20s, you'll have significantly more autonomy and a much higher earning potential than you would have had in almost all other roles at investment, development, or lending firms at this stage of your career. As a general rule of thumb, what I found is that the easier the job is on a day-to-day basis, the longer it's going to take you to get where you want to go. And for two 30-year-olds who both started their careers at 22, there could be a huge variation in their skills, experience, and network based almost entirely on the jobs they decided to take on. This type of mindset is even applicable in college before you start full-time work, when you're deciding to take on the additional workload of a case study competition, deciding to go to a networking event where you don't know anyone, or deciding to take on a part-time internship on top of a full-time course load. And in most cases, when you're choosing between two different options, doing the harder thing in your 20s is going to lead to a lot more autonomy, opportunities, and ultimately income as you progress throughout your career.
Now, the next piece of advice I'd give my younger self is to seek out roles where you can get equity in deals, but only if you can see yourself staying at that company for a long period of time. Real estate is an extremely entrepreneurial industry with a lot of opportunities to make really good money without having to strike out on your own. And the leaders within a lot of small to medium-sized firms are often heavily compensated based on the performance of the deals they work on. But with that said, one of the biggest catches to this is that at most firms, to actually end up earning this performance-based pay, you need to stay at that company for a predetermined amount of time. And if you decide to go elsewhere before that time is up, you'll end up losing out on some or all of that money. Most performance-based pay structures that offer employees equity in deals or a percentage of promoted interest come with anywhere from between about a three to six-year vesting schedule, which means that if this is something that's on the table for you and the company you're considering joining has a reputation of being a difficult place to work or you think you'll take another job before that time is up, it's worth looking for different opportunities altogether that might be a better long-term fit. I've personally seen people lose hundreds of thousands of dollars just because they left a few months before the investing period was up. And although these structures can sound really good on paper, making sure that any equity participation opportunities are combined with a team that you can see yourself growing with could end up saving you a lot of time and a lot of money down the line.
Now, the last piece of advice I want to mention here is something that I wish I took more time to do early on in my career, and this is to become a leader in your local real estate community. A lot of people coming out of college are reactive by nature, meaning that by default, they join groups that already exist or follow a leader that's already in place. But if you want to progress in this industry as quickly as you can, one of the best ways to do this is to create new groups and become that leader yourself. This could mean joining your local NAIOP or ULI chapter and taking on a leadership role within the young leaders group. This could mean taking on a leadership role within your university's alumni association or Center for Real Estate. Or this could even be as simple as creating a small group of four to six of your peers that meet regularly for lunch or drinks and talk through best practices and the deals that you're working on. At the end of the day, real estate is a relationship business, and the best job opportunities, partnership opportunities, and investment opportunities are almost always going to go to the people who are the most well-connected within the industry. And by raising your hand and volunteering to bring people together, this makes it significantly easier to make those connections. Ultimately, even if you do just a few of these things, you can speed up your career trajectory by years in a lot of cases. And while there are no shortcuts in any aspect of life, these are some of the best ways that I know of to get where you want to go in the real estate industry as quickly as possible.
And if you want to make sure you have the skills you'll need to take the first step in this process and land a job at a top firm in the industry, and make sure you're ready for an Excel modeling exam that might be given to you during the interview process, make sure to check out our all-in-one membership training platform, Breaking Into CRE Academy. A membership to the academy will give you instant access to over 120 hours of video training on real estate financial modeling and analysis. You'll get access to hundreds of practice Excel interview exam questions, sample acquisition case studies, and you'll also get access to the Breaking Into CRE Analyst Certification Exam, which covers topics like real estate proforma and development modeling, commercial real estate lease modeling, equity waterfall modeling, and many other real estate financial analysis concepts that will help you prove to employers that you have what it takes to tackle the responsibilities of an analyst or associate at a top real estate firm. And if you like this video and want to see more content on commercial real estate career advice, make sure to hit the like button. Let me know and let me know in the comments if there are any other career-related topics that you'd like to see covered in more detail on the channel. As always, thanks so much for watching guys. I hope you found this helpful. Subscribe to the channel if you haven't already to see more videos like this every single week, and I'll see you in the next video.