Special servicing?
Hi all,
I have an offer for a special servicer. There is not a ton of information on this forum surrounding that segment of CRE.
From what I have seen on LinkedIn, people who go to special servicing typically stay there.
I am only 2-3 years into my journey so am still young. Would special servicing be a good place to grow? I already have some workout experience FWIW and understand what the job entails.
Special servicing in the commercial real estate (CRE) sector can indeed offer a unique and valuable career path, especially for those with a background in workouts and an understanding of what the job entails. Based on insights from the Wall Street Oasis (WSO) community, here are some key points to consider regarding a career in special servicing:
Specialized Skill Set: Working in special servicing allows you to develop a highly specialized skill set focused on distressed assets. This includes negotiation, restructuring, and the management of non-performing loans. These skills are in demand, particularly in economic downturns or in sectors experiencing distress.
Career Growth: While it's observed that many professionals in special servicing tend to stay within that niche, this isn't necessarily a limitation. The expertise gained can position you as an industry expert in distressed assets, which can be valuable for career advancement within the field or transitioning to related areas such as restructuring advisory or distressed debt investing.
Networking and Exposure: Special servicing roles often involve working closely with various stakeholders, including borrowers, lenders, legal advisors, and asset managers. This can significantly broaden your professional network and expose you to different aspects of the CRE and financial industries.
Market Cycles: The demand for special servicing is influenced by economic and market cycles. During periods of economic downturn, the need for professionals skilled in handling distressed assets increases. This cyclical nature can impact job stability but also offers opportunities for those with the right expertise.
Consider Your Long-Term Goals: Reflect on your career aspirations and how a role in special servicing aligns with them. If you're interested in the workout process, distressed assets, and the challenges of turning around underperforming investments, special servicing could be a rewarding path.
Given your experience and interest in workouts, a role in special servicing could indeed be a good place to grow and further develop your expertise. It's also beneficial to continue networking and staying informed about trends in the CRE market to ensure your career development aligns with your long-term goals.
Sources: Specialty Lending (GS/TPG) - Any insights?, Q&A: Career start and progression across IBD // Restructuring // PE special sits, Q&A - Commercial Banking Credit Risk SVP in Southeast USA, https://www.wallstreetoasis.com/forum/hedge-fund/the-future-of-special-situations-distressed?customgpt=1, Software Engineering seems like the best job one could have
What’s the title/position you have an offer for? Is it one of the big servicers? If you’re getting started in your career I’d say take it, even if pay seems low. With the volume of workouts occurring you’re going to learn a lot in the next few years. You’re going to get a lot of reps, something your peers in acquisitions roles won’t say for the next while. This will help you immensely when you search for the next job, assuming you don’t want to make a career in servicing.
Senior analyst for a newer SS shop. Pay is ~$150 in a MCOL area so I’m not sure how that compares given limited data points.
Is that 150 base? If so that’s insane. My stance is you will be exposed to everything you should not be doing as a sponsor during a large distressed cycle. It’s like a mini real estate mba. This can only make you stronger if you want to go to the principal side. Same goes if you want to go to a cmbs shop after. If you think the group who you have an offer from will see deal flow, take it.
Rialto Senior Analyst is like $90-100k all in.
Is the consensus that a role encompassing special servicing and B piece underwriting at $150K TC is good?
For an Analyst, yes. Even asso I’d say take it. I’m at a top 3 developer in my asset class as a second year asso and that’s my total comp. The only way you are guaranteed to make more than that at a junior level is if you stay in ib or go to a mega fund repe. Some smaller shops will pay that much, but most are less with the hopes of one day getting promote. Don’t worry about the money as long as it’s not highway robbery.
This sounds like K-Star out of Dallas.
I really do think it depends on the group if it’s LNR then take it. They’re probably the top SS and I know it’s pretty easy to exit, as there are a lot of former Starwood Property Trust/LNR alumni everywhere.
But if it’s a newly formed group like K-Star it’s hard to say whether that would be good experience or not for obvious reasons. You’ll most likely be working strictly with KKR Loans vs Rialto or LNR who do 3rd party servicing as well.
Overall, loan workouts in my opinion are a solid experience especially in difficult times like this. Hope this helps.
Working in servicing will be a great place to grow and is pretty busy currently, and will likely continue as more office and troubled retail loans default at maturity (and possibly some multis with issues too). You touch a lot of different facets of the business and gain valuable experience that will be with you forever. However, moving into something else afterward is not as easy as it seems, unless you will still get underwriting experience and help other teams. That said, if you get a good offer - take it, especially if it's a well-respected shop. If you're getting paid well and working good hours while still learning, seems like a good move. The market is still rocky and who knows what will unfold this year, but assume you'll be doing it for a few years, unless light comes quicker from the tunnel.
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