How To Break Into Real Estate Acquisitions

Acquisitions roles are some of the most coveted jobs in the commercial real estate industry, and to set yourself up to be able to land one of these opportunities, you need to be strategic about your career planning going in.

The internships, full-time jobs, and even the specific skills you choose to focus on can all end up mattering, and these can ultimately mean the difference between landing your dream job or being passed up for a role.

So to make sure you’re doing all the things you’ll need to be doing to break into real estate acquisitions, in this post, we’ll cover the strategies that I’ve personally seen work best to land acquisitions roles, and some things you can be doing now to get where you want to go.

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Experience Matters for Acquisitions Roles

In many cases, jobs in acquisitions (especially at bigger firms) will require some sort of internship or full-time job experience in real estate beforehand. However, not all experiences are created equal when it comes to preparing you for an acquisitions role.

If you want to set yourself up for success to land a job in acquisitions, in my experience, one of the best ways to make that happen is to start out on the brokerage side of the business, specifically as an investment sales analyst at a global brokerage firm.

Path #1: Start in Investment Sales

What Investment Sales Analysts Actually Do

These types of positions involve a lot of the same day-to-day activities that you would be doing in an acquisitions role, including:

• Underwriting deals
• Creating investment memos and pitch decks
• Looking for ways to communicate upside and value creation opportunities to potential buyers and sellers in the market

This means that even though you wouldn’t be working in acquisitions directly, the skills you’ll build in these roles will be directly applicable to a job in acquisitions.

Advantages of Investment Sales Experience

In brokerage, you’ll also be exposed to a variety of different investor perspectives, and in most cases, a lot more transaction volume than you’d see when working on the principal side of the business.

By getting involved with a high-producing team in a major gateway market at a global, brand-name shop (think Eastdil Secured, CBRE, JLL, Cushman & Wakefield, or Newmark), you’re also going to be held to extremely high standards. You’ll be doing work on behalf of institutional clients that don’t tolerate mistakes, so even if you won’t be put through a formal training program, you’ll still be learning the best practices in the industry.

Transitioning From Investment Sales to Acquisitions

By working alongside major institutions as clients, this also allows you to showcase your work over an extended period of time and build relationships with these companies. This often makes the transition to go and work for a client a relatively easy process, assuming you’ve performed well for them over the years.

Since you’ll generally be coming into these institutions bringing the relationships that you’ve built with other principal-side shops during your time in brokerage, this will also often allow you to come in at a senior associate, associate director, or even a manager level.

As an added bonus here, brokerage firms are often actually proponents of analysts going to work for a client, since these people will often refer business back to the firm they started with, which ends up being a win-win scenario for everyone involved.

The Downsides of Investment Sales

There are inevitable cons to going the investment sales route, primarily that you’re in a role that’s completely disconnected from real estate operations. A lot of these jobs can also be extremely demanding from a work hours perspective, especially if you’re on a high-producing team. However, if you want to learn how deals get done and how buyers and sellers look at opportunities in the market, investment sales can be a great place to start.

Path #2: Start in Asset Management

If a job in investment sales doesn’t sound like the right fit, another great entry point into acquisitions is asset management, specifically an asset management analyst role where you’re tracking the actual performance of properties in a portfolio over time.

Why Asset Management Experience Is Valuable

There’s a saying in real estate financial modeling that goes “Garbage in, garbage out,” which essentially means that if your assumptions in a model aren’t grounded in reality, the return projections you’re making ultimately won’t be accurate.

And in an asset management role, you’ll be watching in real time how properties in your company’s portfolio are performing, which can give you a much better sense of how a potential acquisition opportunity also might perform within that same portfolio.

Practical Skills

Asset management roles will expose you to things like operating expense norms and construction costs on renovation projects, which can be extremely helpful to know when underwriting all kinds of commercial real estate. And if you’re working at a company that’s focused on the retail, industrial, or office sectors, this will also expose you to tenant leasing trends, which can be hugely beneficial when underwriting deals.

When you’re working in acquisitions, you’ll need to make assumptions related to things like tenant renewal probabilities, tenant improvement allowances, or market rents you could generate if a suite becomes vacant. And by gaining experience in asset management first, this will make sure your assumptions have substance behind them (and don’t require constant input from asset managers on your team).

Internal Transitions

As an added benefit here, working in asset management means that you’re already working within a commercial real estate investment firm, which can often lead to opportunities to transition into an acquisitions role internally. This makes the job search a lot simpler and a lot easier than it would be as an outside applicant.

The Downsides of Asset Management

When working in asset management, the main downsides are that you’ll come out of these roles lacking transaction experience, and you also won’t have relationships with investment sales brokers that can help you find deals. However, many of the skills you’ll build in asset management can be applied directly to running due diligence, making leasing assumptions, and finding ways to add value that other investors might miss.

How To Make The Transition

If you start out in an investment sales or asset management role, if your end goal is to land an acquisitions job, the biggest thing you’ll want to make sure of is that the job you take will have you heavily involved with the investment analysis process. Ideally, you should be working in or creating real estate financial models and calculating investor returns on a regular basis.

There are a lot of investment sales roles that are only focused on sales and won’t expose you much (or at all) to property analysis and valuation. And some asset management roles can look a lot like property management jobs, focused primarily on day-to-day operations instead of business plan strategy and optimizing returns.

To land an acquisitions role, you’ll usually need to be able to work in, customize, and review a real estate financial model, and you’ll also need to know the key drivers of returns and how things like debt financing, hold period assumptions, or leasing decisions can end up affecting a deal.

How To Prepare For Acquisitions Interviews

If you want to make sure you’re prepared for the interview process for acquisitions, investment sales, or asset management roles, and you want to be 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, 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.