Director of Real Estate Development Comp
I will be receiving a offer to work at an affordable development shop in the southeast at the end of this week. The role is a director of development. I have an idea what the salary should be but just wanted to ask what do you think salary range should be based off what you’re seeing in the market at the moment?
Salary $185k-$225k unless affordable is vastly different from market rate.
The additional comp is what will make or break you.
When you quote that range - what are the responsibilities/experience level?
5-10 years, running multiple deals from conception through disposition. Basically a developer in all but bank account. You can do the job, but no one is going to let you sign for a loan or hand you an equity check.
In my mind at least, analysts & associates do grunt work, development managers & VPs run deliverables, directors & managing directors run platforms, and big D Developers sign guarantees.
I think extra comp comes in the form of getting a cut of the dev fee in affordable
That's interesting! That would be the absolute last thing you'd get in market rate.
That’s correct. On the affordable side probably comes out to around to 2% of developer fee as your bonus. You have to keep in mind this fee can be deferred and actually used as project contingency. It’s typically paid out during different milestones of the project. Such as financial close, stabilization, and 8609 completion. If anybody else has seen different structures on the affordable size, please let me know. An actual project promote probably come at an even higher level. What is it like on the market side as far as bonus structure/promote?
On the market side you roughly start with Salary + % Bonus like any corporate job. Then you include benchmark bonuses based on deliverables. Then at a certain point you get a small % of the promote in a project (or carry in a fund, depending). Then that % grows.
The only people I know who have gotten part of the dev fee have put real money into the deal and are less employees than they are junior partners at that point. Real estate is weird, so I'm sure it's happened, but I can't think of anyone I know personally who has gotten dev fee as a "gifted" part of their compensation package versus "earned" through investment.
Big fan of this conversation though. I feel like my buddy in affordable might be getting screwed now. I don't think he gets dev fee, but I also may never have thought to ask.
I worked on a few LIHTC deals through a partnership, so the other group was handling the financing, so I have a cursory knowledge of the way it works. Because you're building 100% affordable the market value of the building at completion is going to be lower than the cost to build it, so there isn't any potential for carry since there isn't a waterfall (at least not in the traditional sense). But you're allowed to build in a nice dev fee, so that's where the profit comes from for the principals, and then some trickles down if you're senior enough.
I do feel like director roles in the Southeast are 165k to 205k on the affordable side, but this is a good data point. You are correct the bonus structure is really what makes or breaks it. Just need to get better confirmation of that structure.
Small update for everyone. Salary 160k with 2.5% bonus based on paid development fee in 3 installments. 5% bonus if I find the deal in 3 installments. This was the verbal offer. Still waiting on the official offer letter. How long does it typically take to get an offer letter? It’s been dragging and making feel like is this even real at this point. Been interviewing with these people since Feb…. Wtf… is this all just a red flag?
How long has it been since the verbal offer?
I wouldn’t let it go longer than a week without following up. As I’m sure you know, following up on shit that hasn’t been delivered by someone is the preeminent skill in this industry.
August 1st is when the verbal was given and I checked in last week. Said it was coming early this week and nothing. The lack of decorum is infuriating. It is what is. I’m going to check in next week and if I don’t have an official offer letter by mid September I’m just going to move on. As much as I want a new role and the money, I will not deal with disrespect during the courting process with people you’ll have to work closely with as we know development teams are small. Big red flag. The old guard has to really get their $hit together. I understand it’s a weird time to hire but just communicate that sheesh….
Appreciate it. Usually job offers and employee demands are figured out before they hire you. Shouldn't take more than a week, but usually (in my experience) ranges on a right tail curve where most come in within 1-4 days, and every now and then some take a couple weeks, but they let you know that because they are still interviewing.
Last update. Offer was essentially rescinded. Basically said budgetary concerns. F$&k me. Just glad it happened before I put in my notice. This market has just be so disappointing. Good luck to you all.
Sorry to hear that man, that's a tough (and totally unnecessary) blow. I was in the courting process for like 6 months through a lot of back and forth. I did eventually get hired and have been on for several months now. But it took them like 2 weeks to send the offer letter.
I know how it is to really want a job and be dangled a carrot, only to get disappointed. Saving grace here is that they might come back to the table, so don't get discouraged. And you're right to have the self-respect not to put any merit in a firm that does shit like that.
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