Real Estate Investment Banking: What Is It?

Even massive corporate transactions require intermediaries to ensure that mergers and acquisitions go through as planned. An investment bank facilitates many of these processes, but a real estate investment bank assists in matters of property sales. Read on to learn more about what real estate investment banking is.

A Brief Explanation

You’ve probably heard of Goldman Sachs, JPMorgan Chase, and Morgan Stanley—all of these companies have extensive investment banking systems within their institutions. These banks are gargantuan, but investment banking can also exist on a smaller scale. Simply put, investment banking creates capital for companies and other entities. Real estate investment banking is effectively the same thing, but real estate investment bankers connect people seeking capital for real estate with capital providers.

Investment Banking vs. Private Equity

There’s no doubt that there are connections between investment banking and private equity, but these services are not the same thing. Investment banking exists in an advisory role, with the primary goal of raising capital. Private equity, on the other hand, is an investment business. Private equity firms use pools of capital to invest in businesses and make money from charging a percentage on the pools while generating significant returns on their investments. Investment banks instead advise their clients on large transactions (such as acquisitions or mergers) while raising capital for their clients.

Real Estate Investment Banking Analysts

The most common position in the real estate investment banking space is that of an associate or analyst. They can create financial models to play out various scenarios, give presentations on market reports, and quickly identify high-value real estate prospects. If all of this sounds a little complicated, consider hiring a quality property management team for investors. We can take care of any and all problems you may face, so feel free to reach out and schedule a meeting. We can help you with buying your first investment property. Now that you know what real estate investment banking is, find your niche and come up with the best plan for you to secure an incredible investment.