How To Choose a Real Estate Career Path You Love
If you like the idea of working in commercial real estate, one of the biggest benefits of being in this industry is that there are so many paths for you to choose from, each of which can give you a very different experience on a day-to-day basis.
But even though this tends to be a net positive overall, the specific part of the industry that you choose to pursue is one of the most important decisions you’ll have to make, and going down a path that’s not the right fit can have a lot of negative consequences (in both the short and the long term).
So to make sure you’re going into the job search process well-informed and making an educated decision about which roles you want to pursue, this article walks through through the three main career paths within commercial real estate, and where you might fit in best based on your skills, your interests, and the level of risk you’re willing to take on.
If video is more your thing, you can watch the video version of this article here:
Real Estate Operations
So to step back and take a look at the commercial real estate industry at a high level, there are three main categories of roles, with the vast majority of jobs in this business falling into one of these three buckets.
The first path is working in commercial real estate operations, where you’re either driving or monitoring the performance of deals. Career paths that fall under this category include roles in asset management, portfolio management, and even loan servicing, where your main responsibilities involve working on the existing assets a company owns and either managing or analyzing the performance of those assets. In addition, you’ll also often be responsible for reporting those results to internal senior leadership or third-party equity investors and lenders.
What You’ll Do
These types of roles tend to be best for people who consider themselves “optimizers”, people who like to see projects through to completion, or people that tend to get a lot of satisfaction from seeing growth or progress over time related to their work.
These also tend to be some of the least “forward-facing” roles in the industry, which makes these ideal career paths for someone who considers themselves an introvert. If you don’t want to spend the majority of your time trying to build new relationships and trying to sell your services, and you’d rather focus on management and reporting with familiar teams in familiar markets, these types of careers can be great options to consider.
These types of opportunities also tend to be some of the most low-risk jobs in the business, since the demand for asset managers, portfolio managers, and loan servicers isn’t directly reliant on deals getting done in the market. And when transaction activity slows and rents are dropping or vacancy is increasing, the people that can help companies improve operations, negotiate loan workouts, or help optimize portfolio performance can be some of the most in-demand professionals throughout the entire industry.
With this comparatively low level of risk also often comes relatively lower compensation packages, since you’re generally going to be relatively far removed from the purchase and sale of commercial properties. Because of this, even though you may be responsible for driving the growth of a portfolio, bonuses in these types of roles often tend to fall on the low end of the spectrum.
Ultimately, if you see yourself as relatively risk-averse, you’re willing to leave a little bit of money on the table in exchange for a stable, dependable paycheck, and you also take pride in optimizing performance and leading projects through to completion, roles in operations are where you’ll want to be.
Real Estate Deal Sourcing
If a career in operations doesn’t sound like the right fit, the next career path to consider is focused much more on transactions directly, and this is a career in real estate deal sourcing.
Career paths that fall into this category include positions in acquisitions (working for an investment or development firm), roles in loan originations (working for a lender), or even in-house capital markets positions where you’ll be raising debt and equity internally to help capitalize a company’s deals.
What You’ll Do
Unlike roles in operations, these positions are very focused on getting deals done, which makes this part of the industry a great fit for people that like to work on individual projects in short-term sprints, without the continuous responsibility of managing property performance over a sustained period of time. These positions also generally require a significant amount of relationship management on a day-to-day basis, with outbound outreach to brokers, clients, and investors making up a significant portion of your responsibilities (especially in more senior-level roles).
Since these jobs tend to be extremely transaction-focused, these are also usually going to come with significantly higher levels of risk than you’d see in an operations-focused role. This means that, when transaction activity slows or capital in the market dries up, these tend to be some of the first positions that are cut during times of market distress.
However, when times are good and market activity is strong, these roles are usually going to offer a much higher income ceiling than you’d have in operations, since many of these jobs include compensation packages that are heavily based on performance and the amount of deals you can close.
Ultimately, if you’re comfortable with a slightly higher chance of losing your job during times of market distress in exchange for more income upside during good times, you thrive on building relationships and maintaining those connections, and you want to work on new projects consistently (rather than managing the same projects over a longer period of time), a career in real estate deal sourcing could be a great fit for you.
Real Estate Intermediaries
If operations isn’t your thing and deal sourcing roles don’t quite fit what you’re looking for, you may want to consider working as an intermediary, facilitating transactions as a third party on deals.
This career path primarily consists of roles in brokerage, including investment sales, mortgage brokerage, and equity placement. In these positions, you wouldn’t be working directly within an investment or development firm, but instead, you’d be working for a company that would represent these firms to sell or finance deals on their behalf.
What You’ll Do
For people who thrive on change and constantly want to be working on new projects, one of the best things about this part of the industry is that the time period that you’ll work on each deal or project tends to be relatively short-lived, and you’ll often be working on dozens of different assets in any given year. These roles also don’t include much or any operations management and primarily act as sales-focused positions, meaning that your day-to-day responsibilities in these jobs are going to be centered around bringing two parties together to get deals done.
Because of this, intermediary roles tend to be extremely heavy on business development and relationship management, and most roles will require you to spend a lot of your day on the phone, in meetings, or making other outreach efforts to find and keep clients.
Intermediary roles tend to be some of the highest-risk jobs in the industry, and when transaction activity slows or market volatility increases, commissions can fluctuate significantly from year-to-year. While there isn’t generally an income ceiling in 100% commission-based roles, when you move into mid-level and senior-level positions in this part of the industry, this also means that there isn’t a base salary to fall back on when times get tough.
Ultimately, if you’re very comfortable with risk, you want to maximize your compensation as much as possible, you want to operate based on a pure “pay- for-performance” model, and you consider yourself a natural relationship builder and connector, working as an intermediary could be a great way to both utilize your existing skill set and to achieve your goals (as quickly as possible).
How To Break Into Commercial Real Estate
In my experience, these are the things you’ll see in each of these three career paths as a commercial real estate professional, with each providing a very different experience within the business overall.
And if you want to learn more about commercial real estate career paths and what these companies are looking for when hiring analysts and associates to join their teams, 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.