Anyone make the switch from Multifamily to Retail? Curious to hear how people like it. I currently work in multi / mixed use and really enjoy negotiating lease terms, doing build outs, and assessing tenant business plans. Also curious what skills I should work on outside of work to make myself a stronger candidate. Would I be able to lateral at the associate level or would I need to take a step back down to analyst? Any insights are much appreciated.
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I made this jump and ended up switching back to MF after two years in retail. I really disliked it. It is hard to answer your question about lateraling because there are so many different types of retail developers/investors and we do not know what function you are looking at (acquisitions/development/asset management etc.). I actually had a pay and title bump when coming from MF, I am in development. I would never recommend any development role in retail except for the highest end new complexes, acquisitions can make sense more of the time. Asset management is a mixed bag, probably best to avoid like development..
The luxury retail developers-operators offer competitive positions. Most economists do not predict much new retail construction, the spaces that will be built will trend high end (similar to residential) and they are exciting for young professionals, lots of glitz and glam. Build-to-suit services for F500 and regional chains (think Walmart/Bank of America/McDonalds) will be completed by preferred developers along with more local mom and pop development companies of under 15 employees. That is a "who you know" business, Starbucks has "a guy" in every secondary and tertiary market from Biloxi to Spokane to Bangor, it is sales oriented when you are at a higher level. Then there are class B and C shopping center owner-operators, this is where I was. I would avoid this like herpes. Keep in mind for everything but new luxury retail, building a 4+ unit MF structure is more complicated at every stage than a 3k SF QSR or 8k strip mall, which is likely what you'd be doing.
For skills, ARGUS certification can't hurt but not much comes to mind. Maybe go to some ICSC event so you can appear informed, listen to the JLL "Where We Buy" podcast. For interviews, be skeptical. There are way more shysters in retail than MF, they'll have a junk portfolio and show you renderings of a new big project they have no ability to execute on and that has no market demand. Retail also has bad risk-adjusted returns compared to MF, tenants can leave you out to dry with no one to fill in the gap.
Don;t listen to this fellows indictment about the entire retail sector. sounds like he just worked for a shady developer that owned dogsh** centers. .
No indictment about an entire sector from me (reading is fundamental....as are possessive apostrophes for "fellow's"). As someone who actually has a skillset in ground-up and substantial rehab, retail is not the place for someone like me to be. Hence, I said acquisitions can very well make sense, along with new luxury retail for those in development. Someone in development who handles existing shopping centers will be overseeing MEP upgrades, parking lot repairs, and the occasional outparcel entitlement. That goes for Class A to Class C properties. There are very few ground-up middle income shopping centers being built, go google "greyfield." Operators are begging non-creditworthy pickleball court franchisees to convert their space and bringing in drive-in movie theaters. This is all desperation.
Nope! plenty of grocery anchored and multitenant strip centers being develpoed right now . Sounds like your firm was jus tsitting on their portfolio, which is fine, but no fun if you are a developer. Like i said though, plenty of new product coming out of the ground. your post said to avoid any retail develpoment that is not high end luxury retail. bad advice!
My firm had 1-3 year holds, it was not a REIT and had no reliance on the income stream for returns to LPs. Anyone who tells OP to shoot for ground-up, non-luxury retail positions because there is "plenty" of volume is a retard or acting in bad faith, maybe both. No major forecasters expect significant growth in total national retail space for several decades. Obsolete spaces taken out of national inventory will be replaced with high-end space and the occasional strip center you mentioned (and that I mentioned in my initial post....reading really is fundamental). I hope you have fun straw manning and leasing out your super cool strip centers to Pakistani vape stores. Those vape stores are all the rage and even sell OTC sexual stimulants!
You aren;t even in the sector any more and you are talking like you know it all LOL! I'm not talking about what the "national projections" are that you are reading in whatever business journal you read, I'm talking about actual developments happening right now. Not going to list them off to ya, but trust me there is a lot going on! Just look at how many stores the national grocers are opening. I can name 10 new grocery anchored (publix, kroger, fresh market, and a fw others) develpoments that are already pre-leasing just in my market. The retail leasing market is stronger than ever and new product is getting snatched up right away by hungry tenants. And it aint luxury high end retail or whatever your definition of luxury retail is.
and to be clear, I'm not saying there is "plenty of volume". There isn't "plenty of volume" for ground up dev in any CRE sector right now. But telling someone to avoid any type of ground up retail develpoment like the plague that isnt luxury retail is just bad generalized advice overall. Retail is detail! Sounds like you didn;t stay long enough to learn the nuance of the industry.
I was in agreement with you at the start but this turned out to be a pretty poor analysis. Yes you are correct in that building those strip centers or whatever else you used as a comparison to a multi family building aren’t considered sexy. However, if we are talking about the major development projects that retail organizations are pursuing, you’re very off base. If you go into retail development and expect medium term gratification, you’ll probably exit. 5+ years, and that definitely isn’t for everyone, for some of these projects to incubate, much less get off the ground. It’s the nature of the beast. And if we want to talk about the “bigger projects,” I’m not even talking about building an entirely new center. Even if you want to repurpose land on an existing site you own, there are mountains of ground work to secure support and then actual latitude to pursue said project. Then you have to figure out what level of retail should stay, how you’re going to redesign the site, what users make sense, a full suite of political arena requirements, etc etc etc.
Retail development or retail site densification is far from an easy game, and if you screw up your design it can cost you a relative arm and leg to fix it.
It does not matter if I am no longer in the sector. Elon Musk can opine about payment processors and Donald Trump can talk about hotel branding knowledgeably even if that takes up almost none of their time now. "Whatever business journal you read" that would be market reports, the ones most developers receive from the CBREs of the world. "Trust me"= you are about to get pegged on Rohypnol at a dive bar. The retail leasing market is not "stronger than ever," do not give OP hyperbole. Ten grocery stores may or may not be a lot depending on the market size. If it is Miami, it is not much at all. If it is Damar, Kansas, then it is a lot.
"Plenty of volume" means enough projects to create a good job market for RE professionals or allow for profitable and reasonable entry as an independent player. We are still a decade from catching up to the nation's housing needs and LPs are begging to entitle and build. Industrial is going strong in the major markets (Inland Empire/Northern NJ). Retail is not discussed as a problem product anymore because office has gotten so abysmal. Retail is, at best, stabilized or in slight secular decline. This is also with a macro background of strong consumers. Despite fears of recession and inflation eating budgets, consumers are spending money they do not have. Retail is not well positioned to withstand even a modest downturn in consumer spending. An '08 would be catastrophic.
I stayed in retail plenty long enough to understand how deal flow, the development cycle, and tenant relations work. It is not rocket science despite your pithy "retail is detail" quote (what sector would you say is not "detail"?). MF is much more complicated in terms of entitlements, construction, and asset management. The returns are also much better, especially when risk adjusted. Especially in hard to build regions (NYC/Bay Area/Boston), there is incredible value in getting any project completed due to small pipelines of incoming units. These cities beg for retail for the tax revenue and shoot down MF. The retail still does not get built much because it is not profitable, depsite easy approvals.
Thanks for the replys. I have more questions than before but that is a good thing I suppose.
Feel free to pose them, happy to help.
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