The most common functions for MBAs working in Real Estate are 1) financing real estate transactions, 2) buying, selling and managing real estate, and 3) developing real estate. Some firms specialize in one function while others have groups that operate across this spectrum of functions. Occasionally, students will pursue brokerage or advisory functions within the industry.
Part of your education at Anderson is to learn enough about each function to direct your career search according to your interest and skill set. After participating in the extensive Parker Career Management Center's training program and attending AREA's educational and networking events, you will be ready to choose which path is right for you and how best to pursue it. You will take classes in UCLA Anderson's Real Estate Specialization to gain the skills you will need to succeed in your desired career path. The solid understanding of real estate markets, property types and valuing real estate that you will gain from your coursework will help you no matter which part of the industry you decide to enter. And, considering the number of available jobs in each part of the industry will vary according to the cycle we’re in, learning skills for multiple roles is key in order to be flexible and competitive despite the market climate.
The industry can be broken down into five possible career paths:
1) Commercial Real Estate Development - Commercial real estate development is comprised of many activities, ranging from the renovation and re-lease of existing buildings to the acquisition of raw land and the sale of improved parcels to others. Developers primarily are responsible for creating, imagining, funding, controlling, and orchestrating the entire development process from beginning to end. Commercial real estate developers take the greatest risks in the creation or renovation or real estate – and as such can realize the greatest returns or suffer the greatest losses. Because of the intricacies involved in each type of real estate, most developers will specialize in a specific property type or part of the development process. For example, a condo developer must be good at marketing and creating buzz around a project, while a land developer must focus on obtaining zoning approvals in order to make the project successful. Developers are involved in all parts of the commercial real estate industry, and deal with design, construction, regulatory approvals, financing, investment analysis, brokerage, leasing, etc. Often smaller developers will outsource many related activities such as brokerage, leasing, or construction while larger developers handle these activities in-house in an effort to create more efficiency. Entry level positions include assistant project managers or development analysts.
Functions within Development:
Career development within Development:
Public Liaison (Government/Community Outreach)
Development Director/Project Manager
2) Commercial Real Estate Lending - Commercial real estate lenders come in many different forms: banks, insurance companies, debt funds or balance sheet lenders. They provide the debt capital needed to build or acquire commercial properties. Because almost all commercial real estate is financed with debt, commercial lenders play an important role in the commercial real estate industry. Entry level analysts or associates typically work hand in hand with a relationship manager and are responsible for underwriting prospective loans. This involves gathering financial statements, tax returns, building pro-forma cash flow projections, valuing properties, and writing an internal credit memo, which is a document used to determine the feasibility of the loan. Loans are various by nature and provide lenders with broad exposure to deals. Types of loans include construction loans, acquisitions, value-add re-positioning, bridge loans, land, development, homebuilder lines of credit for lot development and construction, and more.
Functions within Lending:
Debt Capital Markets
Career development within Lending:
3) Equity Investors - Many firms in commercial real estate focus specifically on setting up companies/funds specifically to buy and hold properties for a certain time horizon. Typically these investors are (or are backed by) large institutions like insurance companies, pension funds, endowments, or are investment companies such as opportunity funds or REITs. A firm/fund will usually focus on a specific property type and geographic location, and will also target a certain risk level (value-add or core-opportunistic etc.). The acquisition process requires collection, modeling and analysis of financial and market information. An investment professional will have to analyze this data surrounding a deal and either recommend making an investment or not. Roles within these institutions vary, but real estate students from an MBA program typically target positions in acquisitions or asset management.
Functions within Investment (PE, REIT, Operator, Investment Manager):
Portfolio Management/Investor Relations
Career development within Investment:
4) Commercial Real Estate Brokerage - Brokers are everywhere in the commercial real estate industry. By most estimates there are approximately 100,000 practicing commercial real estate brokers in the U.S. Commercial real estate brokerage careers fall into two categories: Investment Sales and Leasing. Investment Sales brokers are hired by an institutional entity for the acquisition or disposition of commercial assets. Sales brokers will underwrite properties to determine a realistic value, create marketing packages, actively market the property for sale, and negotiate a final sales price. Acquisition brokers will find deals that match the buyer’s acquisition criteria, underwrite potential acquisitions to determine value, and negotiate price and deal terms on behalf of the buyer. Entry level positions for Investment Sales brokerages include an underwriting/due diligence analyst, marketing associate, or research analyst. Commercial Real Estate brokerage firms also work on behalf of landlords to lease their properties or tenants to find them physical space to operate. Brokers will serve as a fiduciary to their client and negotiate the best lease terms on their behalf. Typically, commercial real estate brokerage is a 100% commission-based compensation structure, so it is a high risk/high return career and success is directly correlated to the amount of effort put in.
Functions within Brokerage:
Career development within Brokerage:
5) Investment Banks - Investment banks provide corporate finance services and strategic advice to firms and individuals participating in the real estate market. They raise debt and equity to help fund transactions and provide advisory work on mergers & acquisitions and restructuring situations. Often when a REIT or other large investment firm raises debt capital to finance a large acquisition or the purchase of another firm, they will use an investment bank. Because most commercial real estate is local, investment banks typically work on larger corporate deals rather than small to medium sized local deals. These large deals involve Commercial Mortgage Backed Securities (CMBS), public capital markets, and large corporate clients. MBAs enter the industry as associates and assist in business development and the execution of a broad range of transactions.
Functions within Advisory:
Highest & Best Use Analysis
Career development within Investment Banks:
VP (account manager)
Senior VP (senior account manager)
Managing Director (source deals, maintain relationships)
The following companies hired Anderson MBAs during the last two years for full-time or internships. You can see that most students went into the equity side of the business and it’s true that this is where most of the opportunities are. We saw many great opportunities on the debt side this past year as well. The bulk of these internships are sourced through postings from Parker and The Ziman Center via the Anderson Real Estate Association (AREA) list-serve and many full-time jobs are sourced through off-campus means such as Linked-In or SelectLeaders.com. A few real estate companies will come through On Campus Recruiting. Mock interviews with Parker and other students will help you prepare. While jobs in this industry can be sourced through conversational-style interviews, mostly to assess fit, some interviews can be very technical and you may have a modeling test so be prepared! ARGUS is the standard software within the industry and you will need to understand how to use this to be competitive for jobs.
The timeline for real estate recruiting can stretch all year for many people. During Fall quarter of your first-year, you will need to learn the industry and build out a company and contact list. You should start real estate electives no later than winter quarter of your first-year and consider doing an academic internship in the winter, spring or both. ARGUS training happens in the winter and spring as well. You may also consider doing a case competition which provides project experience. You will update your resume with academic internships and projects as you progress in the year and will always be networking with fellow students, industry professionals and alumni.