Big vs. Small Real Estate Companies – Which Should You Work For?

When you’re starting your career in commercial real estate, one of the biggest decisions you’ll have to make is whether to work for a big institutional player or a smaller, more entrepreneurial firm.

And after working for multiple different companies of both sizes myself (and seeing where my peers have ended up on both paths), there are very clear advantages and disadvantages of each of these routes.

So if you’re trying to decide where you might want to start your career in this industry, this post walks through the main things to think about when choosing between working for a big or small company in commercial real estate, and how each of these might impact your long-term success.

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The Big Company Route: Pros and Cons

Let’s start out by talking about the big company route first, since this tends to be what most people think they want directly out of college.

For context, I’d classify a big company as having about 50+ employees that are all working on very specific parts of the business.

Advantage #1: Brand Name Opens Doors

The biggest advantage I’ve seen of going this route is that a brand name on your resume from a nationally or globally recognized firm can open up a ton of doors for you in the future, in a variety of different ways.

Working for a big, brand-name organization (even just as an intern) will do a lot to get your resume noticed when applying for your next job. And if you want to maximize exit opportunities for associate or manager-level roles, it’s really hard to beat analyst experience at a big, well-known shop.

These companies typically have more structured training programs, work on big institutional deals, and have a pretty rigorous selection process. So when analysts come out of these firms looking for their next opportunity, employers tend to assume these people know what they’re doing.

Advantage #2: Learn Best Practices

Working at a big company will also often give you the opportunity to learn the best practices in the industry for your specific job function. This is why, if you’re trying to improve your skills quickly in things like financial modeling, deal sourcing, investment analysis, or capital raising, it’s really hard to beat institutional experience.

Advantage #3: Relationships

Having big companies on your resume can also be really helpful if you plan to start a company in the future and raise capital to fund your deals, and the relationships you’ll often build with lenders and private equity firms in these roles can make it a lot easier to source both equity and debt capital.

I would also say that for people who know they want to build their careers inside large organizations, starting out at one of these firms is arguably the best way to make that happen. So if your main goal of getting into this industry is to be the head of acquisitions at a major real estate investment firm, trying to get into one of these shops as early as possible is going to be your best bet to make that a reality.

Disadvantage #1: Getting Siloed

Even though there are a lot of benefits of going this route, one of the biggest downsides of this path that I’ve seen over the years is that you can often get siloed into one specific job function.

This means that if you’re working as an acquisitions analyst, for example, your day-to-day responsibilities might only include financial modeling and underwriting. And in a lot of cases, you won’t be involved at all with the process of transaction management, raising capital, or transitioning the property into the company’s portfolio.

Without this experience, it can be really difficult to understand where your work fits into the bigger picture. And if you decide to transition to work for a smaller firm in the future or strike out on your own, there will inevitably be a lot of things that you just won’t know how to do.

Disadvantage #2: More Bureaucracy

Because these companies tend to be more established, there can also be a lot more bureaucracy when it comes to pay levels and promotions, which can be extremely frustrating for young professionals that are looking to progress quickly.

The Bottom Line on Big Companies

Ultimately, if you’re looking to maximize your exit opportunities, build your career within institutions, or learn the business in a structured, methodical way, working for a big-name company can be a great option to consider.

The Small Company Route: Pros and Cons

If anything I just mentioned makes you feel like a big company might not be the right fit for you, you may want to consider working for a smaller, more entrepreneurial team, which has a lot of unique advantages.

Advantage #1: Exposure To The Entire Lifecycle of an Investment

One of the most notable things that small companies have going for them (that’s extremely hard to replicate within a large organization) is that you’ll often be able to touch all aspects of the deals you work on. This means that you may be involved with things like raising capital, the acquisitions process, the asset management process, and/or investor reporting, even if these things aren’t included in your initial job description.

As a young real estate professional, experience like this gives you the opportunity to test out a lot of different parts of the business in a very short period of time, and this can help you figure out where you want to place your focus when planning out your career.

Advantage #2: More Responsibility Sooner

Smaller firms will also typically give their analysts and associates a lot more responsibility than you’d see as an analyst or associate at a big, brand-name shop, primarily because they have fewer people to delegate to. This can often give you the opportunity to work directly with brokers, lenders, and equity partners, or even take the lead on entire transactions.

Advantage #3: Meritocracy and Co-Investment Opportunities

Smaller companies tend to operate much more as meritocracies when it comes to pay and promotions, and are much more likely to open up co-investment opportunities with low investment minimums to junior-level employees.

In my experience, deal structures tend to be a lot less complex at these firms, with most smaller companies raising capital on a deal-by-deal basis (rather than in a discretionary fund), and this can open up a lot of opportunities to participate in fees and promoted interest on the specific transactions you end up working on.

Smaller firms will also usually give analysts a lot of exposure to senior leadership on a day-to-day basis, which can provide a huge learning opportunity for people coming straight out of college or with very limited real estate experience.

Disadvantage #1: Training Can Be Disorganized

The biggest downside I’ve seen to working at companies like these is that, if the senior leaders of the firm don’t come from institutional backgrounds or don’t prioritize learning and development for their employees, the training within these organizations can feel really disorganized.

The last thing you want to do is start your career out building bad habits and learning from people that may also be learning as they go, so you need to make sure that the people you’d be working for are both credible and experienced in the real estate business.

Disadvantage #2: Inconsistent Pay and Benefits

Pay levels and benefits packages for analysts at these types of companies can also be pretty hit-or-miss, which can be difficult for people with young families or a lot of student loan debt. If you fall into either of these two categories, this is definitely something worth considering.

The Bottom Line on Small Companies

Ultimately, I see smaller shops as great places for people who want to build their own portfolios, get hands-on leadership experience quickly, or participate in the upside of the deals they work on, and this is especially true when the senior leadership team you’d be working for can bring institutional best practices to the firm.

How To Break In

If you want to make sure you have the skills you’ll need to land interviews and pass an Excel modeling exam that might be given to you during the process at top real estate firms (of all sizes), 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, which 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.