Best path to Development?
I know real estate as a whole has no direct path but someone with not really any full time experience relative to development/CRE finance..what is the best way if one can't get a Development Analyst type role off the bat? I really don't want to do Brokerage even as a debt/IS Analyst type. What are other pathways?
I am one of two analysts at a regional firm. I came from the brokerage side of the industry and the other analyst came from the design (architect) side. I know it's not the answer you are looking for, but there really is no "best way" to get into development.
From what I have gathered, the longer you wait to get into development, the harder it becomes to break in (associate, project mgmt, VP positions require significant development experience). So I would continue to search for analyst opportunities. What do you do now? It might be worth sticking with your current role and continuing your search.
I emailed a ton of developers, investment groups, and brokers for opportunities in my target market. Got a coffee meeting with this developer, stayed in touch through email, and two months later he asked if I could schedule a trip back to meet the team. His biggest concern during our meeting was my lack of development knowledge (entitlement process, design and construction concepts), experience in this market, and deal underwriting experience; most development shops are pretty lean so they want someone who can come in without hand-holding. I requested he call a few VP's and EVP's from my brokerage office who could attest to my work ethic and abilities. They turned out to be great references, because a few weeks after that he called me to make an offer.
I rarely see "development analyst" job openings, so I think your best best is to look for off-market opportunities by reaching out to developers directly. Get in early - it's a hell of a lot easier to work your way up once your inside. Also, by looking for off-market opportunities, you aren't competing with people who have their MBA's and MSREDs.
Investment Sales broker aspiring to break into development (Originally Posted: 05/22/2017)
I have been at an off market investment sales shop in NYC for 10 months and hold a bachelors degree from a pretty good school. Long term, I hope to become a developer (would love to work for a Related, L+M, Extell etc) but am not sure of the best way to get there. I have been trying to meet developers through investment sales but the only hard skills I have are the real estate models I teach myself on the side. Do I need to be in acquisitions? Is I-sales going to hold me back if I stay here too long? Any advice is appreciated.
Yes, I Sales will hold you back if you stay too long. The good news is that you're familiar with underwriting deals and with a year of CRE experience you'll be a good candidate for an Associate position at a PE or public developer. I made this move after a year as a jr broker in I Sales and it has turned out well so far.
A word about underwriting... if you don't do it, or you use Argus, take the BIWS excel modeling course and then say on your resume you that that's how you underwrite. That's absolutely essential.
I was also an analyst at CBRE for 2 years and recently transitioned to become a development analyst. I was (and still am) blown away by how much there is to learn/know in development, I've been in it for 8 months and still feel like I am just scratching the surface of the iceburg. For this reason I highly reccomend getting in as early as you can if that is where you want to be long term since there is a lifetime worth of knowledge to learn. My experience may be skewed because I work for a regional firm where I am involved with every facet of projects, I would imagine corporate developers streamline their analysts.
From my experience in meetings/interviews with multiple firms (again - all regional, so can't really speak for Hines type companies), entry-level positions are RARE. Since you are still relatively new to the workforce, no amount of LEED or modeling certifications will fool these guys. They know that you know nothing, that you will need 6-12 months to get up to speed and begin adding value. If you recognize this, show that you are very interested and capable of learning, you will eventually find a team that will bring you onboard.
To show your capability, obviously talk about deals you have worked on that relate to the firm's focus. Redact a few financial models and email them as work samples. Create a mock waterfall model and send it to them. These guys dont have time to give you financial modeling or written tests like HFF/Eastdil would do - so be proactive and show them your qualifications. In my market, there are a lot of developers doing $250mm+ projects who do not even have a website - so keep that in mind when you are prospecting for job/firm leads.
Happy to answer any specific questions on how to leverage your CBRE experience to development.
Edit: Everyone is saying stick it out 2 years. I disagree - why would you pass up an opportunity if it came about just because 2 years is the norm? As I mentioned, if development is your long term goal, get in as early as you can.
I spent more than 15 years in development and also spent time at CBRE and my advice is to stick with CBRE for at least another couple years. CBRE is a great name to have on your resume but also a great place to NETWORK with colleagues and clients. As an UW analyst (I assume you work in DSF group?), you're getting a chance to look at deals all over country, dig into the deal, understand the sponsor's investment thesis, see how the capital stack is constructed, learning different markets, etc. All of those skills are critical to being a successful developer. As mentioned above, we're getting toward the end of the cycle and development deals are getting scrutinized harder than ever by equity and debt providers. In a lot of cases, developers are having to go to debt funds to get deals done since typical construction funding sources are pulling back. And if interest rates tick up, who knows what will happen?
Find a mentor at CBRE, get involved with CREW (I assume you're female based on your screen name?), keep your eyes open for internal opportunities at CBRE, etc. You're in a great place so maximize what you can get out of it before you give it up. Good luck!
Break into development post MBA? (Originally Posted: 03/15/2017)
Hey gang, new user here. I've really enjoyed reading a broad range of content on this forum.
A few questions, but first context:
I've been working for a boutique non real estate investment firm for the past four years and have risen to the level of portfolio manager (yes we actually build our own investment models). I have always been interested in real estate development, and quite frankly, have a strange attraction to buildings. I have a very good grasp of finance (not specifically RE related, obviously) and am headed into an MBA program in a city in the SE that is loaded with development. In UG I really enjoyed operations classes and the project management classes as well - I felt like I was actually a "do-ER" and building something. Work with tangible output is pretty refreshing.
All this being said, I have ZERO experience with the development process or real estate specific finance. Plan numero uno is to stick with the current career path, but I don't want to close any doors to work that I think would be interesting.
Question 1: Should I forget about this completely, and take a walk downtown to get my "building fix"?
Question 2: If I get an MBA with a concentration in real estate, what kinds of opportunities will I have for internships/work after school?
Question 3: What are the specific roles that MBA's are hired into? And what kind of compensation should I expect to see if I do land one of these roles?
Thanks in advance.
The development world is notoriously un-structured and fraternal. It sounds like you are already locked in to getting an MBA, but I think for someone in your position an MSRED would make for an easier transition. That said, it is by no means impossible to break in with your credentials which, while not development related, at least demonstrate intelligence and ambition.
Developers are most likely not recruiting MBAs, so your only realistic avenue is to network your ass off with local developers while in B school, profess your passion for development, and try to get meetings and internships. It will all come down to the relationships you can build and the subsequent experience you can gain from those relationships.
As long as you understand that development positions at reputable shops are few in number and very competitive, go for it. It's going to be an uphill battle but you can make it work. My guess is you will have to network like an animal and expect that it may take about a year to make the transition. At the end of the day, development gives you a lot of flexibility to sell your unique value proposition to an organization. At my shop the development team includes a former investment banker, a former construction guy, and a former leasing brokerage guy. Each brings something unique to the table...find out what that is for you and how to sell it.
From my experience, it is rare to see development opportunities on the market (select leaders, linkedin, indeed, etc). They do come around every once in a while as development analyst/associate, but they are infrequent positions as the deal teams tend to be very lean.
I am currently in the final interview process at a large foreign real estate developer that came to me off-market. The team reached out to me although I have not worked in development before. I thought sharing my background to share my current path might give some insight.
Started at Top Tier Market (NYC, SF) CRE brokerage firm (CBRE, JLL, CW) and worked on tenant and landlord financial analysis, market research and pitch books. Did this for 3.5 years. Like CRE_Erector said, this is 8th grader math, and yes, that is correct. I ran NPV's on individual leases.
After that I joined a MM REPE operator as an acquisitions analyst. Job requires underwriting and performing due diligence of single assets and portfolios. ($5mm-$250mm). Been here for 1.5 years. Job came from a broker at my current company who wanted to strengthen his relationship with his client. His client hired me.
I think the best way to get into development is to network. Attending ULI development series, NAIOP events and meeting all of the developers is a great start. These speakers are here to share their passion and projects that they may have worked on for 10 years. Its pretty easy to stroke their ego's and they may be dying to mentor a young kid. Take them out to coffee and get a ask for two or three local developers they can refer you to to speak with. Keep building your network and good things will happen.
Similar to what others are saying, the routes for those getting into development are a mixed bag. The direct way, which does exist, is checking jobs boards and specific companies' careers pages and applying when the jobs appear but you put yourself in a large competitive pool there. Its not a total long-shot so its always worth paying attention to but I imagine it takes longer to break in this way.
I got my role as a development and acquisition analyst for a REIT though very fortuitous networking right out of undergrad. A family friend from home, somewhat out of the blue, put me in touch with a guy who had worked for him years before and had recently taken a job as a regional VP for a REIT's regional investment office. I got breakfast with him and the local MD and they invited me to take a aptitude test and then apply for the job. Looking back I have to acknowledge that I got really lucky but it ended up coming from networking in the end.
If I were doing it again I would figure out what cities I wanted to work in, follow development activity similar to what I want to be building, and start making a list of the developers I am interested in based on my findings. Find them on LinkedIn and send emails to analysts or associates at those firms and see if you can set up a coffee or breakfast early one morning near their office. Ask them how they got their job and if they have any recommendations for you if you wanted to find a job similar to theirs. Or you can try and set up meetings with people higher up the food chain and just ask if they or anyone else they know of is hiring. Maybe 1/10 times this might not be well received but more often than not even if they are not hiring, they will appreciate the initiative and remember you when they are hiring or be willing to connect you to someone who is. Plus, worst case scenario, you get a chance to just sit down with a developer and talk about some of their projects you know about and think are cool - you can learn a ton about the industry doing this alone.
Another bit of advice is, if you can afford it, to join the local chapter of ULI if you are in a major city. There are a lot of networking events where you will be able to meet a good number of local developers. Its something like $250 per year if you are under 35.
When I was in my state school undergrad, this older guy (50-something) sat next to me in my foreign language class (Japanese). He was my language partner all semester and towards the end, I finally asked him what he did for a living. He told me he was a partner of a law firm and he had 13 attorneys working for him. He was trying to learn some Japanese to talk to clients. I had the "ho shit" moment for a 19 year old and then lightning struck my dumbfounded brain and I asked an incredible question which was whether he had any summer jobs. Previous to that I had only worked in fast food and parks and rec, was thinking about one day being a FBI agent or something. Turned out his office was moving and needed help filing stuff and building cubicles. He turned out to be the top land use lawyer in my city. I leveraged that law firm name to my next job and then my next.
Fast forward about 15 years: Big 4. REPE. REIT. Development. General partner. Got my MBA also.
I agree there is no one path to development. Takes a lot of luck. Every single opportunity came at being in the right place at the right time. Look how I used this admin job to swing the next. I was an admin intern at a law firm but got taken out to lunches and events with the summer associates. I'm forever grateful. For my next job doing accounting for a real estate company, the law firm name kind of validated me.
I think luck also comes from having an open mind and heart to help others. If you are consistent and go the extra mile, people refer folks (smart, well educated, ambitious) to you to talk about careers. These people end up doing great. You build your network without trying too much.
Luck also because during the Great Recession I would have taken an accounting job or something outside the real estate field. Unfortunately and fortunately I didn't get hired.
Lastly, get good at financial modeling, figure out your own investment philosophy (Lessons learned from a combination of several folks you worked with), research things to the point where you know something unique, work harder than anyone.
I don't see this trait too much. I'm the developer type who wants to go full circle. I'm in it to impact my past. I appreciate the history. If you have this passion, folks will recognize that. You might not always fit in the halls of The Corporation, but people you worked with will expect you to have your own firm one day. I've met a handful of developers who have that spark. You need to have vision and be able to communicate that vision.
I also have a 3-year rule. Besides becoming a doctor, professional athlete; I believe that one can totally change their direction in 3 years. You just have to build.