Finance  ·  Features

Hire Calling: Alternative Lenders Take Their Competitive Streak to the Job Market


When it comes to the labor pool, real estate lending’s big-bank lenders would appear to have all the advantages. Household names. Giant human resources departments. The ability to pay incredibly competitive wages.

But for Joshua Reiss, the appeal of the immediate hands-on experience that came from an opportunity at a small alternative lender won the day.

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Reiss, a 2008 NYU graduate, had put in a year at AIMCO, a large Colorado-based REIT with more than 1,000 employees, but the experience soured him on the tribulations of working for a sprawling institutional employer.

The environment was “very corporate” and “hyper political,” Reiss said. “It was an interesting learning experience, but it wasn’t the right fit for me.”

The right fit turned out to be Centerline Capital Group, a multifamily-focused lender that is now a part of Hunt Companies. At the time, Centerline had less than 200 workers, a fraction as many as AIMCO had. 

“I started as an analyst, [and] through the opportunities presented to me I was able to find a much better use for myself,” Reiss, who, eight years later, is now a vice president at the company, recalled. “I was given a lot of opportunities early on and a lot of exposure to a lot of different businesses.”

The rapid pace of his career even allowed him to start a family earlier than he could have otherwise, he said.

“I have to say, there’s been a lot of support this entire time,” Reiss added.

As they continue to wrest a growing share of the commercial real estate lending business away from big banks, alternative lenders have been as aggressive about staffing and recruiting as they have been about winning loans.

Notionally, up-and-coming alternative lenders would appear to be disadvantaged next to the industry’s big-name banks. Institutions like Wells Fargo and Bank of America have built up near-universal brand recognition through their consumer banking and retail presence, and they also enjoy sprawling human resources divisions with the wherewithal to attend countless college fairs and other hiring events. Wells Fargo has about 262,000 global employees, according to data the bank published at the end of March.

Acore Capital, one of the most successful of a slew of new debt funds started in the last decade, has fewer than 100.

Indeed, attendance lists from university hiring fairs reflect the reality that among CRE lenders, traditional industry heavyweights have the most resources to spread around. At a Harvard University networking event for finance recruiting last autumn, major institutional real estate firms such as Hines—the Texas-based real estate investment trust—and banks including Capital One and Santander were on hand to trumpet their career opportunities. Blackstone, a uniquely gigantic exception to the rule, was the only non-bank real estate lender with a presence.

A Dartmouth College career fair this spring showed a similar distribution. Giant institutional financiers like Goldman Sachs and J.P. Morgan were on hand to try to woo students for summer internships. Debt funds, mortgage REITs and other alternative lenders were nowhere to be found.

But their absence from those high-profile campuses shouldn’t fool anyone into thinking that non-bank lenders are just sitting on their hands.

Victoria Spevacek, the human resources chief at Greystone, said that her company has zeroed in on just a few universities—including the University of Wisconsin and the University of Maryland—for on-campus recruiting, but has also organized in-office events for real estate students at New York City-area colleges. The result of those efforts, she said, was that Greystone got 1,500 applicants for 12 internship slots this year.

“We’re competing with all the top Wall Street firms, but we’re getting really solid results,” Spevacek said. “We talk to candidates who say, ‘I was deciding between Goldman [Sachs] and Greystone, and I chose Greystone.’ ”

Boyd Fellows, one of the founders of ACORE, reported a similar surge of interest, despite ACORE’s lack of a campus recruitment strategy.

“We’re are looking for five or six people right now, and I can’t even count the number of applications that hit my email every day,” Fellows said. “We get overwhelmed with online applications—[and] none of the private lenders has a material demand for analysts compared with the banks. It’s a fire hydrant of applications to deal with.”

It doesn’t hurt that even as the competition grows for bright finance minds, banks have seen their reputations for good citizenship take a significant hit in recent years—even if those dings had little to do with the commercial lending businesses. Bank jobs may have been a natural fit for ambitious finance students a decade ago, but the taint of banks’ role in the single-family credit crisis, or in retail-banking scandals such as Wells Fargo’s recent tribulations, have driven graduates to look for other opportunities in private equity and at more boutique finance firms, lenders Commercial Observer spoke to said.

Nor does a good paycheck hurt—and entry-level compensation in CRE lending has grown dramatically more remunerative, according to Jeff DiModica, the president of Starwood (STWD) Property Trust. When he got his start in Chemical Bank’s training program for young analysts in the late 1980s, he recalled earning $29,000 per year. (That amounts to about $60,000 in 2019, adjusting for inflation.) But today, fresh out of college, Starwood’s first-year analysts earn, in real terms, about twice as much, DiModica said.

Starwood’s executive leadership said that its applicant pool is so highly qualified that prior real estate experience has practically become a prerequisite.

“Twenty years ago, when I started hiring analysts, they didn’t tend to have a lot of work experience as a rising senior,” Dennis Schuh, Starwood’s chief originations officer, said. “Now we’re finding most of the kids that we interview have done something in real estate their freshman and sophomore summers, or even before. The kids that we see that really want to do real estate, have demonstrated that they do and tend to stand out.”

Not every firm prizes property know-how above all else, however. At Walker & Dunlop, building a personable, cooperative team takes priority, according to Paula Pryor, the company’s executive vice president of human resources.

“It all goes back to culture,” Pryor said. “It’s not something that we just give lip service to. You might have the perfect candidates. But if they’re completely obnoxious, they’re not going to work here—not if they have the wrong personality.”

Pryor said that Walker & Dunlop is routinely inundated with graduating job-seekers as well, often seeing around 100 submissions per opening. Some of those come the firm’s way through a joint recruiting compact that it’s entered into with nine other real estate finance companies under the auspices of the Mortgage Bankers’ Association. The group, which also includes shops like Berkadia, Greystone and HFF, contributes money to fund cooperative industry hiring videos and create a presence at seven campus career events every year.

Two of those career-fair trips take the group, known as MBA CREF Careers, to recruiting events sponsored by minority-minded advocacy organizations: Prospanica and the National Black MBA Association, which advise Hispanic and black business students, respectively. 

It’s no accident that those organizations are a special focus of the MBA group’s efforts.

Executives at large and small firms alike agreed emphatically that real estate finance could do with a less homogenous (read: less male and less white) group of workers. The notion was especially important to companies that focused on hiring young analysts straight out of college, because the graduates they bring into the industry today will become the hiring pool for the next generation of middle managers and executives.

“We’re on a mission to change the face of real estate finance—and that’s not going to happen if we just go to the MBA conference and recruit a bunch of [only] white men,” Pryor said. That pledge, she added, is aimed at creating teams of young analysts who are willing to challenge the industry’s orthodoxies by virtue of bringing a variety of life experiences to the table—which means, as per Pryor, that it’s not sufficient to just make a token diversity hire here or there.

“When you add only one person who has a diverse opinion to the mix, in time [he or she] will become like everyone else,” Pryor said. “You need to create the environment where those people can bring their real talents to bear. There’s no way an organization can innovate if it doesn’t have representation from all viewpoints at the table.”

Lenders who prefer to hire more experienced workers were no less concerned about diversity but said that, because they limit themselves to interviewing candidates who are already in the industry, their hands are sometimes tied.

“I’m 100 percent convinced that we as an industry should be working hard to diversify our workforce,” Toby Cobb, a longtime lending executive who most recently co-founded 3650 REIT, said. “The male-to-female ratio is rotten: It’s so bad in commercial real estate that it’s embarrassing.” On the other hand, he noted, 3650, which rarely hires people who weren’t already in the industry, can do little better than adding people to its lending team who reflect the (majority male) group of people with extensive relevant experience.

“If you hire out of college, there are just as many women as men there. But we’re unlikely to hire someone out of college,” Cobb said. “If you’re in an industry that’s already imbalanced, and you seek to hire people with industry experience, it’s a self-fulfilling prophecy.”

That’s also where another thorny question comes into play: Nepotism.

It has always been part of the landscape in an industry built around properties that are routinely passed down through the generations within the same family. Finance jobs may not follow the exact pattern as the deed to a family-owned commercial building, but having a pedigree in the business line certainly helps. Among the honorees featured in the most recent edition of Commercial Observer’s 25 Under 35 list of up-and-coming CRE finance superstars, nearly half—12—described growing up around relatives who had ties to the industry.

That’s not to say that family connections gave those young climbers their positions regardless of their abilities. But some industry aspirants not born into the same wealth and connections detect a stench of favoritism. Wall Street Oasis, a web forum for people hoping to land finance jobs, is rife with anecdotes about real estate finance interviews that went nowhere after the applicant revealed a lack of blood ties to the industry.

“All my job interviewers ask, ‘Do you have any family in real estate?’ ” one poster fretted. “Does a correct answer exist here? Does saying ‘no’ affect my shot at landing the job?”

“Had an interview a while back and this question came up,” wrote one poster, who said a recruiter asked if any family members worked in real estate. “Couldn’t believe it was asked as if it was necessary for the job.”

Actually, it might help, DiModica said—but not because the Starwood president hands out analyst slots like candy to the offspring of executives he wants to do deals with. Instead, he’s observed that sons and daughters of the industry have often been immersed in its comings and goings from such a young age that they develop real estate smarts on an instinctive level.

“Compared with someone whose parents are in banking, law or consulting, it’s highly more likely that those kids have talked about real estate in their families their whole lives,” DiModica said. “They know about leasing, owning, financing and value creation. They’ve been to the buildings, and they’ve probably talked about it at the dinner table their whole lives.”

DiModica mentioned as an example a young woman that Stardwood Property Trust recently hired out of an undergraduate program at Georgetown University. Her parents are local developers in Hoboken, N.J. Though their projects might be too small for a massive Starwood refinancing loan, their daughter’s inborn instincts for the business wowed Starwood recruiters during her interviews.

“I asked her to come to Greenwich to compete…against four very talented Ivy leaguers who knew our business well.,” DiModica recounted. Although the woman hadn’t initially intended to go into real estate herself, “we chose her for the last spot on Dennis’ originations team, and she ultimately accepted”—to the chagrin of Starwood’s relationship manager at the investment bank where the woman had first planned to work, DiModica added.

All four of the first-year analysts that Schuh hired this year were women, he said. But compared with the other companies Commercial Observer spoke with, Starwood described diversity in general as less of an imperative—perfectly nice when it happens, but not a primary criterion.

“I would say that we’re cognizant of it, but I wouldn’t say [hiring an all-female class of analysts] is because we’re reaching for gender diversity,” Schuh. “We’re certainly not lowering the bar to try to check a box. But we are seeing tremendously qualified women who are looking at real estate finance as a career.”

Mark Fogel, the CEO of ACRES Capital, a young debt fund, expressed a similar attitude. “We’re not focused on any race, color or creed,” he said. Still, diversity has been happening organically at the firm’s Long Island, N.Y., headquarters. One of its three interns this year is from Indiana, but the other two hail from China and India.

Reiss, the Hunt finance vice president, might not have brought on anyone from quite so far abroad, but his latest job market coup—this time, as the hirer—underscores smaller firms’ appeal to real estate newbies. He recently presented an accepted job offer to a fellow NYU alum after an interview process that emphasized the benefits of working for an agile organization.

“My goal with this analyst is to get her up to speed as quickly as possible,” Reiss said. “Of course, she’ll be running numbers, but it’s also about giving her the foundation so she can have the confidence to be in front of clients and run the deal process.”

Doing that kind of work as a recent grad might be a pipe dream at a larger bank. But for Hunt, it plays into the firm’s strategy of investing aggressively in a desirable workplace.

“I wouldn’t want someone to work with us who didn’t want to be here,” Reiss said.