Big vs. Small Real Estate Companies [Pros & Cons]

When you’re first starting out in commercial real estate, the size of the companies you work for can have a material impact on your experience.

Starting your career at an institutional, brand-name organization can come with massive benefits, but the experience you’d get at a quickly growing startup can also give you some really unique opportunities (that even a company with $100B+ in AUM wouldn’t be able to match).

So to help you get clear on whether you should be targeting big, established firms or smaller, entrepreneurial organizations, this article walks through the main differences between working at big and small commercial real estate firms, and where you might want to start your own CRE career.

If video is more your thing, you can watch the video version of this article here:

Big Real Estate Companies

I would categorize these as well-established investment, brokerage, and lending shops with proven track records of performance, dialed-in internal processes, and large employee headcounts.

Having the credibility of a big, institutional firm on your resume can have a lot of benefits, especially if you’re trying to build a career climbing the corporate ladder. Many large real estate private equity firms prefer hiring people who have already been pre-vetted by other big-name shops, so if your main goal is to be the Head of Real Estate at Blackstone one day, starting out at a brand-name, institutional firm is usually going to be the most efficient path to get there.

And if you end up deciding to transition into working for a smaller organization in the future, having a trusted, established company on your resume will generally make that move significantly easier, and you’ll also usually be able to land more senior-level roles due to your pedigree.

Having institutional experience on your resume can also give you a significant amount of credibility among investors if you plan to build your own real estate investment or development firm, which can help you raise capital directly from pension funds, family offices, or major private equity firms.

From a skill set perspective, working for a large organization will also allow you to learn from some of the most experienced professionals in the business, and will make sure you’re trained in the best practices of the industry. And because larger organizations are more established and tend to have much higher headcounts, they also tend to focus on developing specialists that become highly skilled in one specific discipline.

This means that, if you work as an acquisitions analyst at a company focused on acquiring apartment buildings in the western United States, the things you do on a day-to-day basis will quickly make you an expert in multifamily investment analysis throughout the markets you’re covering. This lets you dive deep into one specific subject, rather than spreading yourself thin across multiple different avenues.

Deal flow at these larger firms also tends to be among the highest across the entire industry, since these shops tend to have the most capital to deploy or work directly with the biggest capital allocators in the business. This means that, in these types of organizations, you’re going to get “reps” in significantly faster than at a smaller organization, and you’re also likely going to see a much wider variety of transactions in these types of roles.

Small Real Estate Companies

A huge advantage of working at a smaller, more entrepreneurial company is that you’ll generally have responsibilities across multiple different disciplines. This forces you to build a more well-rounded skill set and become a more complete real estate professional, in a way that doesn’t usually end up happening within a bigger shop.

Acquisitions analysts at big, established organizations tend to only focus on 2-3 main tasks, but acquisitions analysts at small, growing startups might be involved with multiple different activities outside of their main job description. In addition to underwriting and analysis, this will often include managing the due diligence process, finding equity partners, originating loans, and even asset management and commercial leasing.

The smaller and younger the company is, the greater the opportunity for advancement also tends to be in commercial real estate. In these environments, the focus tends to be on what you can do for the firm, rather than how many years you’ve been with the company, whether you have a graduate degree, or other office politics that might prevent this from happening within a larger organization.

Working for smaller firms can also open up opportunities to invest directly in the deals you work on, which tends to be extremely rare at big firms, or only available to the most senior employees. And while this is definitely a major benefit when you’re first starting out, where this really starts to get powerful is when you move into senior leadership roles, where you’ll often be able to participate in the fees and promoted interest the company generates.

These types of structures tend to make work a lot more fun and meaningful, since it’s very clear what you’re working towards and how that’s going to directly benefit you financially. This also gives you a unique opportunity to achieve some of your entrepreneurial goals (if you have them), without taking the risks associated with starting a company.

Being involved with so many different things internally and taking on multiple responsibilities within the organization will also make sure you’re extremely well-prepared if you do decide to venture off on your own, even if you have very limited resources when you’re first starting out.

How To Break Into Commercial Real Estate

If you’re trying to land your first role in commercial real estate and want to make sure you have the skills you’ll need to land a job at a top firm in the industry, make sure to check out our all-in-one membership training platform, Break 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 Break Into CRE Analyst Certification Exam. This exam covers topics like real estate pro forma 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.

As always, thanks so much for reading, and make sure to check out the Break Into CRE YouTube channel for more content that can help you take the next step in your real estate career.

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