Looking for experience and thoughts on working for a developer who has a small balance sheet.
They forward fund all developments and only spend money on getting land under exclusivity to work through planning and find funding partner in parallel. Pay structure is good base and 4-6% net profit in all deals worked on.
I like how entrepreneurial the opportunity is and I would be more of a capital market role - site acquisition, funding partner and disposals - than construction management. But they have delayed the role as one sale didn’t go through and they had to worry about bills. Seems very risky albeit excitingly entrepreneurial.
Deal wise I assume they make their profit on land value uplift, DM fee, profit baked into FF pricing and then maybe a promote if JV.
It would be appreciated if anyone could shine some light on their experience working for such a developer.
Company has been around since before 2000 and works in several sectors with a lean team (20 people). Good rep in market. Almost exclusively works on off-market deals as bigger developers (Panattoni, prologis etc) outbid on land.
It depends on what you do now. If this is your way into development, and you want to get into development, and they actually hire you, take the chance. You'll learn far more at these type of places than you will at a big name that calls you a developer but you're just running excel models.
But if you already have a good job in development and this is a step up or lateral move, I'd be concerned about their inability to pay the bills. I'm willing to bet a number of their completed projects aren't hitting what they underwrote them at. Hah, I have money in five different deals at my last employer that I've already mentally written off. Almost zero chance I ever see a wire from any of those projects.
Currently working in at shop with several mandates across the risk spectrum but all within a single asset class. I really enjoy the value-add developments we did, having previously worked at a commercial in-house developer as well, but we are quickly moving to a core/NNN fund that’s lucrative for the business with the fee generation it brings in. It’s just so so boring.
Figured I’m at the spot now where I’d really like to grow into a senior role in something I enjoy. While this won’t be my first introduction into the development world, the role will be more senior than a big shop will give me because I have the institutional background that works for the CM type role they’re looking for.
Another question since you’ve worked in a place like this, if bonuses are % of net profits you bring in, what’s the likely ramp up period to getting back to that 50%+ bonus range. In my head I have maximum 1.5yrs of getting things under exclusivity or UO before company looks at making me redundant, so by end of year 3 realising actual promote/ff profit. Too bullish? Obviously could get lucky or unlucky. Will need to get some small wins quickly to get reputation within
Regarding ramp-up, you have to do the math. How long will it take you to tie something up, and what's the average deal lifecycle from offer to purchase to sale? Because that's when your profit share will start kicking in.
And if you're not in a sourcing seat right now, and this is going to be an experiment to see if you're a good acq guy or not, you should think long and hard about leaving a boring but stable seat in this job market.
I would say 12 months to have a deal or multiple deals (depending on deal size and potential profit/fees relative to your cost to the firm) is do or die.
I'm not sure if i understand it correctly, but this sounds a little like an owner's rep position? The company is getting paid a development fee plus bonuses but has no risk in ownership of the property?
I work at one now. There's a big difference between liquid restricted and capital restricted in this context from my experience, and how big the deal sizes are. Can you guys take on interest and carry guaranties, completion guaranties? Who is the guarantor on the loan? This matters greatly.
Personally I find it very feminine to ask for money which is why I don't enjoy the current seat im in. I have a deal in pre-dev with 3 separate GPs and it gets emasculating going hat in hand keep asking for money. The deals I closed from 2022-2024 are all pref equity and capital calls from overruns and delays are a nightmare. It really just depends on the deals you do and debt you can procure. Also finding Co Gps right now is almost impossible.
Fellas, is it gay to be a rainmaker?
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