Compensation Is Back, But Not for Everyone

It may feel counterintuitive that in a real estate market still out of favor with both institutional and private capital, year-end conversations are centered on compensation and on getting it exactly right.

After all, the last few years taught us that “flat is the new up.”

This year is different, particularly in lending as activity has picked up materially and continues to rise, particularly in the second half of the year, with momentum carrying into Q1 2026. As lending volumes return, performance differences are becoming harder to ignore. A subset of emerging originators has clearly separated from the pack through consistent execution and origination, compressing the timeline to senior leadership.

As a result, compensation planning this year requires precision, not formulas. This will be a season of haves and have-nots.

Debt: Performance Is Paying Decisively

In credit, originations are measurable, and the market is responding accordingly.

We’ve seen rising originators negotiate nearly double their historical compensation, with high volume execution commanding a clear premium. The bright spot in today’s market is unquestionably VP and Principal-level lending talent.

Those who are originating should be capturing a meaningful upside this season (managers, take note).

Those who are not originating shouldn’t expect compensation to remain flat to last year. Downward pressure is more likely.

Equity: Selective Rewards, Not a Frenzy

Equity tells a different story.

Capital deployment has been uneven, shaped by mixed signals from senior leadership and lingering concern over getting deals wrong, particularly following early COVID-era investments. Still, there are signs of momentum.

While Principals have struggled and recently promoted MDs often lack the deal “reps” of prior vintages, the largest rewards are going to those who have cracked scalable, operationally complex investment models. These look closer to traditional private equity than pure real estate investing.

We are not seeing a compensation frenzy in equity comparable to credit. Firms are, however, are increasingly aware of how limited this talent pool truly is. A premium feels inevitable.

Looking Ahead: A Talent Shift in Motion

Looking ahead, we expect competition for proven talent to intensify meaningfully.

We also have a clear prediction: Seasoned real estate private capital investors will stay in the game longer, and firms will increasingly build teams anchored by senior dealmakers, including MDs with 20+ years of experience, to bridge the thin upper-mid talent layer. Some of this will be driven by talent returning from entrepreneurial ventures that failed to meet expectations. That’s all for now.

Wishing everyone a wonderful holiday season. See you at the starting line on January 5th.