Capital Markets

Your Job

Capital market teams help real estate companies raise the debt or equity needed to close on a single deal. This is not to be confused with pure investment banking which helps companies raise capital for the actual company, not just for a particular deal. It is worth noting that some capital market companies will call themselves “investment banks”.

Some companies will actually place the financing (e.g. commercial banks, insurance companies, larger brokerage firms, CMBS groups, etc.) while other purely advise by helping the company find the capital at the best price.

As a junior member of the capital markets team, your main responsibility will be:
  • Underwriting the economics of the real estate
  • Gain an understanding the credit worthiness of the borrower and the tenant
  • Determining the profitability of the investment
  • Performing due diligence on the property including ordering/reviewing third party reports (environmental, property condition, appraisal, etc.)
  • Preparing a credit committee package (similar to an investment committee package) and presenting loans for approval
  • Preparing quarterly and annual credit reports to ensure that the financings are performing as underwritten and to make sure all covenants are being fulfilled

​On the surface, the job seems similar to an acquisitions role, and in many respect it is. However, the big difference is, you are trying to place financing, not buying a property. Because of this, your underwriting of the real estate is at a much higher level than someone in acquisitions. Your goal is to get fairly good comfort that the property and the investor will perform.

Interview with an CMBS Associate

This interview is coming soon!

Career Path

Analyst (0-3 years)
Associate (3-5 years)
Vice President (5-8)
Director (8-11)
Managing Director (9+) 

Compensation

Similar to brokerage, capital market compensation is quite variable at the senior levels since your compensation is heavily weighted by the amount of business you drum up. Only at the junior level is compensation fairly set.

Analyst: $60k base + 15% bonus
Associate: $85k base + 25% bonus