The Truth About Working in Real Estate Asset Management

Asset management is one of the most overlooked career paths in commercial real estate, but if you’re looking for a job that combines technical work with relationship building (and comes with a lot of job stability), this is a part of the industry that’s definitely worth considering.

So in this post, we’ll walk through what it’s really like to work in real estate asset management (based on my own personal experience), and some key things to look out for if you decide to go this route.

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What Is Real Estate Asset Management?

To step back and start by defining real estate asset management, this is really just the process of managing the performance of a real estate investment over time.

And this is different from property management, which involves managing the day-to-day responsibilities of keeping a property operational, including managing small vendor requests, collecting rents, and often doing general bookkeeping tasks.

As an asset manager, you’ll be the one responsible for managing property management teams, but you’ll also be responsible for making decisions related to major construction projects, negotiating commercial lease terms, putting together investor reports, and ultimately increasing a property’s net operating income.

The Asset Management Career Path

The entry point into asset management is typically at the analyst level, where you’ll be doing a lot of the back-end support to help make these decisions.

This means that you’ll be doing things like reviewing historical operating statements, identifying opportunities to increase revenue or decrease expenses, and analyzing different leasing scenarios that might impact an investment.

These roles will also usually have you working on creating or maintaining financial models that track property performance over time, along with putting together monthly or quarterly reports for investors.

Different companies have different titles within their asset management teams, but once you move up from the analyst level to an associate or manager position, this is when you’ll start to actually make the decisions that will directly impact investment performance.

At this level, you’ll usually have your own portfolio of anywhere between about 8 and 15 properties (depending on the size of the company), and you’ll be the one directly responsible for the performance of these assets.

This means that you’ll be spending a lot of your time working with leasing agents to manage occupancy levels, working with construction teams to oversee renovation projects, working with lenders and mortgage brokers to make financing decisions, and working with property management teams to maximize operating efficiency.

As you continue to progress in the asset management career path beyond this level, your day-to-day responsibilities start to move away from managing individual properties and start to center more around managing asset managers internally. In very senior-level roles, you also may start to get involved with fundraising efforts and overall company strategy.

Asset managers at this level can make great incomes and are set up very well to transition into C-level roles that are heavily focused on operations, including titles like Chief Operating Officer, Chief Revenue Officer, or even Chief Executive Officer.

If you consider yourself a natural leader of people, you don’t mind the management of both real estate and individuals, and you want to have a direct part in shaping the long-term strategy of a company, asset management is a great place to make those things happen.

The Day-to-Day Reality

Asset management involves some pretty different day-to-day responsibilities than you’d see in an acquisitions or investment sales role, so this is also something to consider when deciding where you want to focus.

The first thing to be aware of is that, unlike acquisitions or brokerage (where you’ll typically only work on a deal for about 2-4 months at a time), asset management professionals are typically responsible for the same handful of properties for what can often be a ~3-10 year timeframe.

This can be a great thing for people who consider themselves natural operators and love seeing projects through to completion, but this can also be a little bit boring for people who thrive on doing deals and constantly working on something new.

Another downside of this career path is that asset managers don’t usually have the final say as far as what goes into their portfolio, which can lead to issues down the line. While you will usually have some interaction with your in-house acquisitions teams during the investment analysis process, you’re typically not the one who’s actively selecting the deals you’ll have to manage.

This can make things stressful and frustrating when you’re trying to meet pro forma expectations that you may not have agreed to in the first place, and having to answer investor questions about why investment targets aren’t being hit.

Pay Structures: Lower Upside, Less Downside

Pay structures in asset management are typically much more heavily weighted toward base salaries versus bonuses or commissions (unlike what you might see in acquisitions or brokerage), so this is also something to think about as you’re considering this career path.

At the analyst level in acquisitions, bonuses will often come in anywhere from about 20%-30% of base salaries, and in investment sales, analysts might see bonuses or commission sharing of anywhere from 50%-100% or more of base pay.

But at the analyst level in asset management, that bonus percentage is usually significantly lower, often coming in somewhere between about 10% and 15% in most cases. And while this can increase to the 25%-35% range as you move into more senior-level roles, you typically won’t see a bonus double your base pay like you might see in a more transaction-focused position.

With that said, along with that cap in upside, you’ll also usually see a lot less downside in asset management roles, with job stability in this part of the industry being really hard to beat.

Even when deals aren’t getting done, the need for asset managers typically stays constant, and properties need to be operated regardless of market conditions.

And this means that when acquisitions teams are shrinking, or brokers are seeing huge drops in their commission income when transaction activity slows, asset managers are a lot less likely to be laid off or see big dips in their pay.

Travel Requirements

Something else to know about the asset management career path is that, depending on the size of the company you’re working for, travel can end up being a big part of your job.

If you’re managing properties in multiple markets outside of where you’re based, you’re typically going to be expected to visit these properties on a regular basis.

This is to make sure you can meet in person with local property management teams, general contractors, and leasing professionals, and also so you can tour the market regularly to spot opportunities or changes in real time.

The people who tend to be the most successful in these roles usually enjoy getting to know a city and building deep relationships with people in a market over a number of years, and they also don’t mind visiting the same 2-3 cities on a monthly (or even biweekly) basis.

How To Break Into Real Estate Asset Management

If you’re trying to break into real estate asset management and 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 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.