I am a graduate who has decided that the world of institutional real estate is one of the most attractive financial sectors right now and, as such, have chosen to forge a career in it.
The reasons behind my ambition to make something of myself in the sector are multi-faceted.
Starting with the big picture, it is clear from where I sit that commercial property has been one of the beneficiaries of monetary policy intervention. Central banks reviving economies via quantitative easing started with the Great Recession and little has changed on that front since. In today’s context, it means the world’s largest investors, such as pension and sovereign wealth funds searching for yield to meet their liabilities and targeted returns, must turn to assets like real estate for a solution. That bodes well for the future employment of those able to help them meet their needs.
Secondly, given these uncertain times, when global markets are rocked repeatedly by things like extreme geopolitical changes and terrorism, I can see how investors will continue to take refuge in perceived safer assets versus those perceived to be more volatile. Great Britain’s exit from the European Union and China’s wobbling economy are among the ongoing events that will see the continuation of negative or lower interest rates for longer than many people previously imagined. The global capital seeking a home in the US as a result, is another reason why a career in its institutional real estate market is attractive for someone like me living here. Some believe the institutional real estate market may be a little frothy right now and that yields may be squeezed further. But I think real estate fundamentals remain strong, particularly given inflation remains low and the labor market has tightened. In the US, there have been improvements in almost every property sector in terms of occupancy and rents, and subsequently values.
Even if current yields are pricing some investors out of gateway cities, and of mainstream assets, certain secondary locations will benefit from current institutional demand, as will so-called non-traditional property types like self-storage, student housing and single-family residential as well as my personal favorite, healthcare and life science facilities. Their decorrelation with the more vanilla property types offer investors defensive strategies to augment their portfolios.
I’m forming my views from my experience as a graduate at New York University (NYU) where I studied real estate finance at the Schack Institute for Real Estate. I am also taking several corporate finance courses at NYU’s Leonard N. Stern School of Business and, for the past eight months, I have been interning as a financial analyst at Nymex Capital, a boutique investment bank in New York specializing in cross-border mergers and acquisitions. Many of the deals I’m working on are real asset intensive, including real estate. I can see a bank environment like this providing me with my first major career break.
Similarly, I could also see myself working on institutional investments at one of the real estate sector’s largest brokerages, or perhaps an advisory role in the asset class at one of the big four consultants.
What do I believe such employers will need from me at this point in the market cycle? Impeccable time management and professional integrity and work ethic are, of course, essential. But data analytical skills in this market, where decisions must be made on increasingly tighter margins are surely an advantage too. It is not lost on me that folk are flocking to the money and if the money is seeking refuge from volatile stock markets and low-yielding bonds in things like real estate, then hyper-competitiveness will also become important. I had a stint in the US Army and am a keen athlete and I plan to adopt a similar mindset in the workplace. Finally, I expect the personal side to play its part. Several mentors have emphasized throughout my studies that, at the end of the day, technical skills help you obtain a job, but people skills will determine your level of success within your career.
Upon graduation, I expect to gain employment at a reputable firm with a great brand and eventually find a way to make my mark on the institutional real estate industry. This may be the first time PERE readers have heard of me, but it sure won’t be the last.