Everyone says I need to understand how buildings are built in order to get into development.
Is there a quantitative role I should pursue with a construction company?
When is the right time?
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why dont you just intern with a development company?
Not sure there's any "quantitative" role in construction companies, unless you were with a firm that does both construction and development
This. You need to understand how buildings are built from a developer's perspective, not get into the weeds from a contractor's perspective.
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I think it would be very beneficial to intern with a construction company.. I would encourage you to focus on the processes that contractors use and fight for a position in a companies estimating department as it is truly the foundation of the business. If you do get an opportunity, please strive to learn how a contractor 1)assesses a bid package 2)completes a quantity takeoff 3)determines their cost to perform the work 4)Decides on a competitive price that is appealing to the client 5)write and submit a proposal letter with strategic clarifications.
With that under your belt, you will be on your way.
If you went the construction route, wouldn't your exit to Development be a construction guy working for a developer? For example, most developers have a VP in Construction of some sort. If your goal is say a Development Analyst, I have always be under the notion that those are just as Finance heavy as they are the nuts and bolts (entitlements, engineering studies, designs, etc).
If a developers had a Development Analyst role open and they had the choice of a guy from a construction type role vs a guy from brokerage shop or lender with high RE analytical skills, who would be the better candidate? (Not a rhetorical question btw curious by those thoughts who are more knowledgeable)
You could lateral over to a smaller shop but without a finance skill set it's very tough. Sometimes high up people who know pre-construction well lateral to a dev shop as they are used to bidding projects, having relationships, and some much of development is what goes on before a shovel hits the ground. Interning at a construction firm (that is busy) would be very helpful--it's the route I took for 3.5 years before going to b-school--but it is tough to jump to development without a Master's in RE/Dev/BA. With that said, I've found that I'm in a world of my own in terms of being able to do all the modeling/numbers and understand design/construction. Hopefully this helps with recruiting over the next couple months.
The broker will have the relationships and will get that job any day over the junior construction guy but depending on how cerebral development is at a given shop (are developers truly sourcing deals, modeling everything, arranging capital or are they just business development people networking and handing leads off to their capital markets team) it is critical to understand the finance behind what is being done. I think more developers who went off on their own started as brokers but there is case to be made about guys/gals who know construction and finance. Getting as much dealflow experience as possible at a young age is IMO key to career growth in any real estate gig, and that's the one thing about construction--it is very slow and tedious and in a span of five years you might build 2 projects. Unless you love the built environment, architecture, and are fascinated with the process of constructing a building, I would buy a couple construction books and read them to gain an understand of what goes on behind the scene. Getting deal experience, whether it be through an acquisitions/investment role, lending role where operators are your clients, or any of the other transaction based roles should be top priority but that just my $0.02.
I agree with your first point. It would probably be a drop easier to lateral to a smaller shop with a heavy construction type background however, they won't have the time or resources to train you on the modeling aspect.
Every job post I have seen from big shops like the Relateds and Extells of the world, for Development Analyst roles, has been previous experience in IB, REPE or some sort of heavy finance role. I would imagine though that makes sense as with those companies you're probably just a spreadsheet monkey modeling out cash flows and joint venture type stuff all day.
You're exactly right--I actually don't know of any shops that 'train' their analysts in real estate modeling and always just thought it was up to the candidate to learn via rebuilding acquired models, etc.. Related and Extells (both NYC shops) have their pick of the modeling litter when it comes to finding intelligent folks who known excel. I can't speak to Extell but Related is so big that I would assume the vertical within the firm are more delineated. Smaller shops value jack-of-all trades folks. Hines interestingly enough told me that they see the finance people (excel modelers) as a commodity skillset that everyone should know but that having construction/design intelligence in addition really sets people apart.
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