Can you do the switch from Development to Acquisitions?
I got a an offer from a large MF real estate developer as an analyst. I am interested in development but do not want to be pigeonholed in development. Has anybody made the switch from development to acquisitions?
You can definitely make the switch. The skills you will learn for the first two years of your analyst stint are basically the same as for acquisitions. You'll just be doing underwriting, and while the model and some of the assumptions will be a bit different, it's not going to meaningfully hamper your ability to switch down the road.
I made the switch from a pure development role to an acquisitions role that focuses on both stabilized properties and ground up developments. Definitely possible but you’ll need to sell your underwriting abilities as you likely won’t have seen as many deals as someone who spent 1-2 years at a debt/equity brokerage.
For what it’s worth, I’m actively trying to make a move back to a pure development role because the work itself is far more interesting (my opinion). Stabilized / value add acquisitions feels quite monotonous once you’ve underwritten 20-50+ deals, as the process is largely the same, while in development I felt like I was learning something new every week.
Any update since this comment? Currently at a developer who is very slow and I'm not getting a lot of meaningful work it feels. I see a few acquisition roles open in my area and I am starting to think lately a few years of acquisitions would be great to really sharpen my underwriting/ analytical skills that I am just not getting in my current role.
Have yet to make the switch. Still trying and would like to, but would only leave for one of the top merchant developers and those seats are very rare/limited in my market. That said, I’ve enjoyed my role a lot more. Cash comp has moved up meaningfully (still isn’t great but moving quicker than my previous development role) and have found myself in a position to source deals (mainly developments but acquisitions as well) for our firm at a young age which feels like a great opportunity even if it hasn’t been formalized yet in my role. That said, development market is very slow so not getting deal reps past the offer stage, which to me is far more important for development. There is a lot of transferable skills you build in acquisitions especially if you’re on the GP side in terms of actual closing experience, capital raising, market positioning, and management of the community post-closing, etc. I’d recommend making the pivot if those roles are at GPs, seeing how you like it, then reassessing in a couple of years. I’m coming up on 5 years of experience on the principal side, so having transactions to put on my resume is everything (in my view). They’ve mainly been stabilized/value-add deals, but that distinction feels less important than doing non-transactional/less meaningful work at a slower development shop.
The universe works in mysterious ways...right after this I got reached out to by a recruiter for a acquisitions role for stabilized, value-add, and ground up development in the asset class I work in now. Stated as looking for around 70/30 acquisitions vs development. Already completed first round interview and felt it went great. Its a smaller shop than the one I am in now so makes me slightly nervous with the current market seeing as my current shop is very stable all things considered. However, these guys have ambitious goals of entering new markets and are teetering on the institutional level so I could see myself being able to be more on the "ground floor" vs at an established shop.
Anyway, I'm getting ahead of myself but hoping to continue the conversations and see where it leads.
Easier to make that switch than the other direction, IMO. Definitely possible.
It is way more difficult to get "pigeonholed" in this industry than people worry about, especially at the analyst/associate level.
Arguably, in-depth development experience is the perfect background for acquisitions (other than for fully-stabilized properties). The due diligence that you'd be spending a lot of your time doing would be due diligence of the property's development prospects, and you'd be much better positioned to do that if you have direct experience.
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