Industry Chat: Real EstateSeptember 2016

Todd Carson

Senior Associate Director

MBA Career Management

Agenda• Working with MBACM

• Real Estate• Introductory Overview

• Trends

• Functions, Roles and Internships

• Company Relationships

• Career Pathways

• The Job Search• Offer Statistics

• Recruiting Strategy and Timeline

• Hiring Data• Offers, Compensation and Sponsorship

• Real Estate at Wharton• Wharton Real Estate Club

• Zell/Lurie Real Estate Center at Wharton

• Events and Resources

• Q & A

MBA Career Management: Advising from experience

Todd CarsonCareer Advisor, Real Estate (since 2011)

Pre-Wharton CV

• Private Equity: Pension Corporation LLP (London, UK)− Member of investment team responsible for management of $1bn portfolio of private

operating company assets− PC funded with $2.5bn total capital from JP Morgan, JC Flowers, Swiss Re and

others

• Investment Banking: Goldman Sachs (London, New York)− EMEA TMT Advisory: worked on advisory mandates for several mega funds including

Blackstone, TPG, Carlyle, and Providence Equity− Prior experience in European High Yield Capital Markets and Fixed Income

Operations

MBA Career Management

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MBA Career Management Real Estate Team

Career Advice

• Self-assessment & decision making

• Networking

• Industry Insight

• Resumes, Cover Letter & Interview Prep

Corporate Relationships

• Develop employer outreach strategy with RRM

Programming

• Develop programs for students interested in Real Estate

TODD CARSONSENIOR ASSOCIATE DIRECTOR

Corporate Relationships

• Strategize best recruiting approach for variety of employers

• Co-manage employer relationships with Career Advisor

• Manage recruiting events

Student Support

• Assist students with logistics of on-campus interview process, job board postings, etc.

JAMIE HENDELRECRUITING RELATIONSHIPMANAGER

Partner with Real Estate Club, Zell/Lurie Real Estate Center

Representative Outreach List: Summer 2016

How can MBACM Help?

• Helping ‘Career Switchers’ find their path

• From X Real Estate Development• Firms to target

• Networking strategies

• Resources to utilize

• Timing

• Offer negotiation

30%

40%

30%

WG16 Full Time Placement*

Acquisition/REIT

Development

Private Equity

Real Estate at Wharton – A Strong Franchise• Robust, global alumni base

– Global alumni community of c.1,600+ across development, asset management, private equity, advisory, brokerage

• Supportive, tight-knit group at Wharton– Historically, c.20 students accept full time roles in real estate each year (2-

3% of class)

• Strong placement on the buy-side

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*Excluding Advisory roles

Foundation for SuccessSome notable alums in real estate

• Jeff Blau, President, Related Companies• Richard Bloch, Founder & CEO, H&R Block• Vikram Chatwal, Founder, Vikram Chatwal Hotels• Jonathan Gray, Senior Managing Director, Blackstone• Jeffrey Katz, President & CEO, Sherwood Equities• Edward Lewis, Chairman & CEO, Oxford Development Company• William Mack, Founder, CEO & President, Mack Company & Apollo

Real Estate Advisors• Dan Och, Founder, Och-Ziff Real Estate Advisors• Mort Zuckerman, Co-Founder and Chairman, Boston Properties

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Industry Overview

Real Estate: Industry Overview

• Entrepreneurial business/enterprise search

• Real estate is an asset class – job function is either advising or investing

• For buy side roles (apart from Development), prior real estate and/or finance experience are differentiating

• Acquisitions vs. private equity

• Asset management can be pathway to Acquisitions

• Commercial and Residential Development – most entrepreneurial

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Recruiting Trends• Market remains robust, subject to global market volatility and end of ‘free money’• Career switching absolutely possible, but heavy competition from experienced talent;

need to demonstrate passion with research/knowledge• Private Equity can be a challenging search for those without prior buy-side experience• I-banking likely to hire in similar numbers to prior years. Compensation is rising,

lifestyle challenges being acknowledged and addressed (RE lighter than Corp.)

• There is mobility in the industry once you are ‘in’. If lacking prerequisite experience, some paths ton consider that are most open to career switchers

• Consider roles in leasing/investment sales• Brokerage, consulting, corporate real estate (eg. Google’s real estate portfolio)

• Summer internships likely to be ‘easier’ to secure than full time roles; can evolve into full time roles for 2nd years. Sometimes offers are made from summer employers later in the spring

Roles in Real Estate

Development Complex skillset and diverse responsibilities

Buy land, work through entitlements and project design, pro formas, source potential tenants, project financing, ongoing leasing

and eventual disposition

Acquisitions Investing, underwriting, sourcing, valuations, deal experience

Investment Banking

Financial modeling/valuation, overall sector knowledge

Advise PE firm on acquisition of portfolio of several thousand

residential mortgages

Private EquityRegional market knowledge, deal

experience, financing markets experience

Network/identify investment opportunities; manage purchase/sale

process; fundraise

Corporate/Asset Management

Management/development/retail experience, relationships with

builders, zoning laws, city planning

Tenant communications and marketing of sustainability initiatives. Summarize critical lease dates and

deliverables

Manage due diligence on acquisitions/dispositions, valuation & sensitivity analysis (Argus & Excel)

Typical Skillset Sample Responsibilities

Sample Internships2017 Development Summer Intern: This position will be responsible for managing several phases of the development of multifamily rental communities. This includes market analyses, financial analyses and budgeting, design conceptualization, management of the entitlement process including presentation before municipal and other regulatory boards, and participation in the construction/lease up process.

Summer Associate – Leadership Development Program: Summer Associates spend 10 weeks working with a Tishman Speyer team in a core functional areas. This is an opportunity to gain hands-on real estate experience, while contributing in a meaningful way to Tishman Speyer's business.

Past rotations have included the following areas: Acquisitions, Development, Asset Management, Leasing, Design & Construction, Portfolio Management, Equity Capital Markets, Finance, Emerging Markets, New Business Initiatives

Summer Associate (Acquisitions & Capital Markets): The individual will work closely with senior management to underwrite potential acquisitions and perform analysis related to the firm's capital markets activities. • Underwriting potential corporate and asset acquisitions• Preparation of ARGUS & Excel models to support valuation & structuring strategies• Supporting analysis on secured and unsecured debt acquisitions• Compilation of loan request books & other financing materials for portfolio properties• Communicating with executive management regarding ongoing project status

Companies That Made Internship Offers in 2016

Recent Employer Feedback • ‘Pre-qualified’ coming from Wharton - strength and rigor of the real estate program is

widely recognized

• Networking is most effective way to find opportunities. One on one interactions are more memorable than just attending info sessions

• Stay current on newsworthy items from firms that interest you; understand their business and don’t ask questions you could have found the answer to yourself

• Have a researched pitch as to why you want to work for a certain firm in a certain geography

• Treks are a great way to get to know firms – rarely will any say no to hosting, especially if there is an alum at the firm

• While future hiring is expected to remain steady, easy financing conditions have led to more than adequate supply

• Multifamily oversupply (in certain markets)? • Still opportunities to repurpose corporate real estate (eg. for tech employers)

The Job Search

• Established employer relationships• Annual, steady demand• Extend multiple offers/yield multiple

students• Understand MBA recruiting value

prop

MATURE

• Developing employer relationships • Inconsistent demand year-to-year• Just-in-time hiring• Less clear on MBA recruiting value

prop

ENTERPRISE

Consulting, Banking, Sales & Trading, CPG Private Equity, Venture Capital, Media, RetailSocial Impact, Start-Ups

Healthcare, Technology, Energy, Hedge Funds, Real Estate

RecruitingStrategy/Timing

Wharton Strategy

Student Strategy

• Employer Info Sessions, Employer Networking Night, Sponsorships, On Campus Recruiting

• Heavy Fall/Winter Recruiting

• Postings, resume book, networking • Throughout year; late in year/summer offers

Wharton Strategy

• Differentiate vs. other schools• Build market share• Find new ways for company engagement

• Develop compelling Wharton value prop• Expand/maintain vibrant Wharton network • Manage outreach with clubs/partners

• Prepare for EIS, Interviews, how to decide between firms, etc

• Networking-intensive• Alumni-intensive

Student Strategy

MBA Career Management

Mature & Enterprise Recruiting

What Real Estate Recruiters Seek…

• Sense of career focus within the industry

• Intellectual curiosity/willingness to learn and work your way up

• Candidates who think beyond entry level compensation

• Strong quantitative and technical skills (i.e. ARGUS, modeling capabilities)

• Marketing and salesmanship

SKILLS

• Relevant industry/functional experience or ability to articulate how past skills are relevant

• Differentiated knowledge of the industry/location

• Marketing and commercial acumen

EXPERIENCE

• Fit with company culture

• Ability to communicate with variety of constituents (investors, construction crews, lawyers)

• Entrepreneurial mindset

• Tenacity – examples of achieving results when odds were stacked against you

SOFT SKILLS

Career Switching

83% 82%79% 79%

67% 67%

57% 56% 54% 53%

40%

20% 18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

% FT Accepted Offers – Reported “Industry Change”

Consulting6%

Professional Services

6%

Real Estate31%

Investment Banking/Brokerage

25%

Diversified Financial Services

13%

Social Impact13%

Investment Management

6%

Pre-MBA Experience: Real Estate 2016 Full Time Offers

Is Real Estate a good fit for You? Skills Culture Work/Life• Risk tolerance based on

analytics + gut instinct

• Collaborative approach

• Ability to manage wide range of tasks (analysis, politics, personnel)

• Confident personalities

• Passionate about the sector

• Build many lasting professional relationships

• Entrepreneurial spirit in the industry

• Open to career-switchers (in general) but must carve own niche

• Tangible impact on communities

• Subject to market conditions

• Hours correlated to deal activity

• Better lifestyle potential in Development, Asset Management

• Financial upside typically over the long term (comp. typically initially lower than other industries)

• International opportunities

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• ‘98-01: Analyst, Investment Banking

• ‘01-03: Wharton MBA

• ‘03-06: Land Acquisition Manager

• ’06-Present: recently promoted to Managing Director, Acquisitions

Career Pathways: Home Builder PE

MBA Career Management

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Recent Alumni in Real Estate

Development

Acquisitions/Private Equity

• James Kelly – Development Associate

• Matt Towerman – Associate

• Eoin Condren – VP, Europe Investments Team

• Martha Kelley – Associate, REPIA

• Moira Kiernan – AVP, Acquisitions

• Brian Cantrell – VP, Acquisition & Capital Markets

• Chris Rosser – Associate

• Paul Zarian – Associate

• Michael Daschle – Director, Development

More Tips from Alums/Employers

• Employer feedback: general recommendations• “Show connections to particular geography. Family ties, knowledge about the

market, long-term plans, etc.” • “Make your passion evident. Stay current/attend club events” • “Property management or brokerage can be a launching pad to becoming an

investor down the road• “If you aspire to work in RE PE, i-banking can be a good way to build transaction

experience and connections”

• Employer feedback: reasons for NOT hiring Wharton students• Lacking credible-sounding connection to geographic location• Competition was better fit; candidates of interest had other offers• Maturity and ability to demonstrate long term potential, today

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Hiring Data

Accepted Internship Offers

0

1

2

3

4

5

6

7

2008 2009 2010 2011 2012 2013 2014 2015 2016

% of all accepted offers

Source of Internship Offers: All Wharton Class of 2017

55%

15%

5%

17%

4%

1% 1% 1%

Wharton Job - On Campus Recruiting

Wharton Job - Job Posting

Other

Personal Networking Connections

Wharton Alumni Contact

Career Fair

Trek Networking

MBA Career Management Contact

Source of Real Estate Internship Offers: Class of 2017

37%

11%4%

29%

4%

15%Wharton Job - On Campus Recruiting

Wharton Job - Job Posting

Other

Personal Networking Connections

Wharton Alumni Contact

Career Fair

Timing of Real Estate Internship Offers: Class of 2017

0

2

4

6

8

10

12

Timing of Real Estate Full-Time Offers: Class of 2016

0

1

2

3

4

5

Internship Salary Breakdown: Class of 2017

RE Internships Accepted 20% of Class Accepted 3%Monthly Salary Range $2,000-$10,83325% Monthly Salary $4,000Median Monthly Salary $6,06775% Monthly Salary $8,000

Full Time Salary Breakdown: Class of 2016

Real EstateNumber Accepted 16% of Accepted 3%Annual Salary Range $80,000-$125,00025% Annual Salary $115,000Median Annual Salary $120,00075% Annual Salary $125,000Number with Sign-On Bonus 10Median Sign-On Bonus $15,000

Real Estate at Wharton

• NYC Development trek• Prior treks to Boston,

LA, Washington • ‘Make your own’

• Zell/Lurie Real Estate Center

• Fall and Spring meetings

• Winter Career Fair

Wharton Real Estate Club

• Commitment to delivering opportunities for ~150 student members to engage with the Real Estate community and identify career opportunities

• Partnerships with Zell/Lurie, MBACM and facultyClub Mission:

Career Treks Conference

• Guest speakers from Industry

• ‘Day in the Life’ panels• ARGUS training

program• Case competitions• Interview preparation • Social events and more

MBA Career Management34

Workshops

Jessica Himmel, Co-PresidentJames Woods, Co-President

2016-2017 Leadership

Samuel Zell and Robert Lurie Real Estate Center• Research center permanently endowed by Sam Zell, Chairman of Equity Group

Investments– Ranked best in country by US News & World Report for quality of faculty and curriculum– Awards fellowships and scholarships to promising real estate students, many of which

are funded by members of the Center

• Hosts meetings and lecture series attracting one of largest gatherings of senior real estate/finance professionals nationally– Spring 2016 meeting keynote speakers included (for example): Kenneth Jacobs

(Chairman & CEO, Lazard); Wesley Edens (Co-Founder, Fortress); Marc Rowan (Co-Founder, Apollo Global Management)

– Ballard Luncheon series hosts leading figures in Real Estate to meet in lunch setting with students

• Career Mentor Program– Students paired with real estate professionals throughout the academic year at Wharton

• Center Leadership – Joe Gyourko, Director– Asuka Nakahara, Associate Director– Susan Sessa, Associate Director

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*Students must be members of the Real Estate Club to participate in Zell/Lurie opportunities

Zell/Lurie Career Fair – Representative Attendees

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Ackman Ziff Real Estate Group Goldman Sachs Olshan PropertiesAlexandria Real Estate Equities, Inc. GoldOller Oxford Properties

Alliance Partners HSP H/2 Capital Partners PCCP, LLCAmerimar Enterprises, Inc Harvest Equities Pennrose Properties

Arbor Phila. Industrial Development Corp. (PIDC Pennsylvania Real Estate Investment Trust (PREIT)ASB Real Estate Investments HFF HershaAvalonBay Communities, Inc. High Real Estate Group LLC PRG Real Estate

Berkadia K. Hovnanian Progressive Housing Ventures, LLCBlackRock PN Hoffman PrologisBlackstone Hines Prudential

The Bozzuto Group HR&A Advisors, Inc. Related CompaniesBrickman ICSC Resource Real Estate

Butler Burgher Group iStar Inc. Rialto CapitalCadre The JBG Companies Rubenstein Partners

Candlebrook Properties, LLC JLL Savills StudleyW. P. Carey Inc. JPMorgan Global Real Assets Silverstein Properties

CBRE Keystone Property Group SL Green Realty Corp.CenterSquare Investment Management Landmark Partners Spear Street Capital

CompStak Lazard Square Mile Capital Management LLC/InvestmentsConcordis Real Estate Advisors LCN Capital Partners Stabilis Capital Management

CoreNet Global, Inc. Liberty Group Holdings Starwood Capital GroupCoshare Liberty Property Trust Tishman

Dranoff Properties Lionstone Investments Toll Brothers, Inc.Eastdil Secured Lubert-Adler Partners UC Funds

Fir Tree Partners Real Estate Madison International Realty, LLC UDR, Inc.Found Advisors Meyer Bergman Vornado Realty Trust

Freddie Mac Morgan Properties/Acquisitions & Asset Mgmt VTSFreedom Mortgage Morgan Stanley Real Estate Investing Walker and Dunlop

General Growth Properties NYCEDC Westport Capital Partners LLC

August September October November December January

Work on your Resume

MBACMResume Book

9/14(feedback)

EISs begin Oct. 24Treks

Zell/Lurie Fall Member’s Meeting: Oct. 21

EISs continue

Treks

Networking Expo: Nov. 7

FRP apps. due

IPS

Treks

Fireside Chats

FRP 1/19-27

Zell/Lurie Career Fair:

1/19

February March April May June July-Sept.

Interviews

Receive Offer

Interviews

Receive Offer

Zell/Lurie Spring

Meeting April 26-27

Interviews

Receive Offer

Interviews/offers

Report your offers

Start Internship

Intern

Research, Strategize & Network

Research, Strategize & NetworkMBA Career Management

Real Estate Recruiting: Timing of Key Events

Real Estate Industry Research Page

https://students.mbacareers.wharton.upenn.edu/job-search-resources/research/research-industry/real-estate/

• Resources

• Company Target List

• Company Notes

• Workshop Archives

Next Steps and Resources• MBACM

─ One-on-One Advising (begins 9/12)

─ MBACM Student Website

─ Career Workshops

• Real Estate Club

─ WGA Club Fair (Thursday, 9/8 @ 5pm)

─ WRE Club Info Session (Wednesday, 9/14 @ 5:15pm followed by Happy Hour)

• CareerPath

─ Complete your profile and set email preferences

─ Create saved job searches

• Zell/Lurie Center

─ Fall meeting Oct 21

Read emails from MBACM for important information on upcoming events & deadlines

Contact Information

Wharton MBA Career Management50 McNeil Building, 3718 Locust Walk, 215-898-4383

Website: http://mbacareers.wharton.upenn.edu/studentGeneral Email Inquires: mbacareers@wharton.upenn.edu

Todd Carson, Career Advisortcarson@wharton.upenn.edu

Jamie Hendel, Recruiting Relationship Manager jhendel@wharton.upenn.edu

Club Co-President Contact infoJessica Himmel jahimmel@wharton.upenn.eduJim Woods jamwoods@Wharton.upenn.eud

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@WhartonMBACM

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