Careers in Real Estate Advisory
Institutional investors such as pension funds and insurance companies, are active in the real estate market. High net worth individuals, like the Rockefellers and Kennedys, also allocate a portion of their investment portfolio to property assets. As with investments they make in stocks, bonds and other securities, institutional and individual investors often hire advisors for their real estate investments. Real estate advisors, or advisory firms as they are commonly known, act as a fiduciary agent. You'll sometimes hear people refer to this as the "Agency" side of investing. Advisory firms help investors identify real estate assets that match their risk tolerance and targeted.
Advisory firms often raise equity for specific real estate investment objectives. For example, a firm may announce a fund that will focus on buying office properties in central business districts (CBDs). The advisory firms announce their intention to raise a fund and then look for backers to invest in the fund. Once the fund reaches its financial goal it begins to identify properties for purchase and builds a portfolio. Advisory firms select investments by focusing on markets and property types that are likely to experience price appreciation in the future.
^
On the Job
Every advisory group operates differently, so the following description is not universally applicable. New hires start as associates and are expected to handle valuation analysis as well as performance reporting to investors. Essentially, you're an analyst whose main task is to run numbers and prepare reports for investors. The reports include issues such as the state of the local market, taxes, valuation, local cap rates, buildings that have recently been sold and the status of those buildings' cash flows. As an associate, you will be exposed to the inner workings of the group and are subject to on-the-job training. A candidate should come to grips with the difficulty to advance in this field. In fact, many advisory firms don't promote from the analyst position, rather they hire someone from outside the firm.
The next step up is portfolio associate (PA). In this role you interact with the property manager on a regular basis to make sure the investment is in good working order. PAs still perform a good deal of analysis but delegate work to the associate. PAs might also make the decision on some smaller capital expenditures such as repairs and upgrades to the building(s). In this position you'll sit in on meetings to discuss acquisition and disposition assignments that involve your portfolio. PAs are asked to visit the buildings in their portfolio for site inspections, but often it isn't mandatory. It's at this level that you begin to have client contact and are expected to understand the portfolio and anything related to the investments.
Above the PA is the portfolio manager (PM). The PM is responsible for the entire portfolio and everything related to asset. In short, the buck definitely stops here. The PM leads the charge on acquisitions and dispositions and is in constant communication with the client. All major decisions related to the portfolio are made by the him or her. Some advisory firms breakout the portfolio manager duties between multiple people. For example at some advisory firms, the vice presidents tend to focus on one specific responsibility. They will either perform acquisitions, portfolio management or disposition of the assets.
At each advisory firm there are individuals assigned the task of raising money for the fund or finding clients. Some firms call these people market directors and others call them client relationship managers. In this role you are the representative of the advisory firm to the investment community and your sole function typically is to raise money. This is a sales intensive role and very high in the pecking order.
|
