Career in CMBS?
Can anyone give any guidance on what a career in CMBS originations is like? I’ve recently gotten an opportunity to start as an analyst with a BB CMBS team on the west coast. Anyone have any particular color around career and salary trajectory? How difficult would it be to move over to equity from a CMBS shop?
[{"id": "euhljhj", "text": "My two cents is that CMBS types are generally real estate finance hybrids with a heavier lean to the finance side of things.  If I were on equity side looking at CMBS candidates I\u2019d want to know how well you know real estate.  Debt side has a different risk profile and the due diligence (in my experience) tends to be different from how an equity investor would look at it - generally more focused on the ratings and secondary market action than underlying RE.  I don\u2019t think it would hurt you but just something to keep in mind on the perception front down the line.  When you\u2019re just getting started in the industry people don\u2019t typecast too much if you\u2019re an analyst coming from equity to debt or consulting, etc.  Just carve out a lane of being the person who knows the RE very well.", "replies": [], "depth": 1}, {"id": "euj0y7l", "text": "Mind if I shoot you a message? I\u2019m in real estate secondary markets and interested in how to get to cmbs.", "replies": [], "depth": 1}, {"id": "euku3ez", "text": "PM me, happy to be a resource in any way I can. I work in CMBS originations. \n\n**Pros** As an analyst, I am assuming you would be sizing and structuring deals. It will also be helpful if they have you working with rating agencies and B Buyers during UW. One of the biggest advantages of working in CMBS vs say a agency shop or a local bank, is that you get exposure to all product types (including hotel and retail)  across the country. You get exposure to lots of volume and as a younger professional, volume is what will help you build knowledge. Within a short period of time, you will have a really good understanding of the demand drivers and strength/weaknesses of each product type and high level info of various markets. This is a transferable skillset and you can go to a equity shop or stay on the debt side and work for a lifeco, bank, debt fund etc. \n\nSalary is generally higher for CMBS vs other products because when priced right and executed well, it is highly profitable. Originators and Underwriters in our CMBS group make more money than our balance sheet originators and underwriters. For an analyst, I would estimate 80K base, associate- $110K ish base. Bonuses depend on shop to shop. As you climb up the ladder, 200K+ is achievable. Underwriters have a higher base but smaller bonuses than originators. \n\n**Cons**- The meaty part of CMBS- like knowing how to underwrite a deal to a rating agency's standard (using a 10% haircut to T12 Revpar for hotels, 5% FFE  or using $.15/SF replacement reserves for industrial and $.25/SF replacement reserves for office etc) and seeing whether a deal can be candidate for securitization is a niche skillset. This is only applicable to CMBS. In my view, while that be a niche skillset as long as you develop an eye for assessing the strengths,weaknesses and mitigants for a deal, you can take that skillset anywhere. \n\nYou work on stabilized deals in CMBS. While I love it and dont see myself doing anything else, some would like to broaden their skillset and want to work on different product types, so your next step might be a debt fund that works on construction loans or bridge loans for transitional properties. It all depends on your interests and goals.\n \nThere can be boom or bust cycles in CMBS. The good times are great and the bad times are terrible. No CMBS loans (literally nothing) was originated in 2009 and 2010. Underwriters continued to underwrite balance sheet loans or became asset managers and worked on distressed loans. Originators also transitioned to other lines of business.", "replies": [], "depth": 1}]