Title says it all. Which do you prefer and why. If you could specify, that'd be helpful (for example, industrial dev vs multi acquisitions, etc). Just to clarify, when I mention development, I mean cradle to grave so from acquisition to stabilization or disposition.
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Depends on the personality type. Much of development is project management and managing consultants. Knowing the correct questions to ask. It’s more of a ‘high level business thinking’ - by this I just mean you’re thinking of your development as a business and make many business decisions such as spending additional money to accelerate schedule, choosing consultants and scoping things, etc. Also managing budgets etc.
Acquisitions is much more ‘sales’ focused and churning through deals to find a diamond in the rough. Managing your external relationships and being the face of the firm to bring in deals. Than managing the process internally and getting it closed. Than move to the next one and do it again.
Development is much more varied. But if you don’t like project management, it probably won’t be a good fit. Acquisitions is somewhat monotonous, but sales focused. If you like sales, you’ll probably enjoy acquisitions (once you begin sourcing deals).
This is a really good distinction that I never really thought about, about personality types and how it fits into you managing an ongoing deal/portfolio mgmt vs acquiring new ones. +1
So technically development also includes acquisitions as that is the first step of the development process, but I get what you are asking. It's a tough question for me to answer because I don't think the comparison is very fair. As Pudding has already answered, they are ultimately different roles that may lead to different personality types enjoying each respective role. Some people are "deal junkies." They really enjoy coming up with a business plan, asset strategy, sourcing the deal, financing it, and then closing it, but they do not enjoy the actual execution of the plan. Then there are people who really enjoy managing the project and coordinating the development team and treating the development like it's their baby. If I'm being honest, I am more of a "deal junkie." When I finally find the deal that works and I can make money on it, I get super excited and become obsessed. I love the thrill of the bidding process and waiting by the phone for the agent to get back to me about where other offers are at or a counter offer from the seller and it is so satisfying to receive a call back from the broker and hear them say "congratulations, your offer has been accepted" because now I know I'm going to make money. Then I love calling my lenders and getting term sheets and making them negotiate against each other so that I can get the best terms. But I also really enjoy the development management aspect. I guess now that I think about it, what I really enjoy is winning and achieving. During the acquisition process, I love winning the deal (if the numbers work) and during the financing process, I love winning the best terms and forcing my lenders to compete against each other. During the development project, I love the accomplishment of achieving variances/entitlements (I've "won" against the city and annoying neighbors). I love coordinating the architect and engineers. When problems arise, although they are annoying, I love assessing the problem and thinking about the best solution and executing it. Similar to achieving a variance, it is very satisfying to assess a problem, propose a solution, and then ultimately executing a solution that works. In my mind I've achieved/won. So i guess I just like achieving and winning, which I can do in both acquisitions and development...it's just more obvious in acquisitions I guess which is probably why I get more excited..
So, OP.. I totally get you mean to imply comparing roles like "Acquisition Associate" vs. "Development Associate" but are also sorta implying the question about career/industry (at least that's how I took it).
While comparing to two role is worthy, I think a "big picture" gets missed these discussions...
That is the actual difference here is a "career in development" vs. a "career in real estate investment mngt" (and of course, one could move between the two during the course of a career..).
So, my first to response to the "should I take a job in development or in XYZ something else".. is "do you want to work in development/be a developer, etc." This is really the more appropriate debate. Acquisitions is a department, task, and often job role, but it is NOT an industry. Same deal.... development is an industry (and a "process" or "deal type" that's all consuming)... but NOT an actual role/title/function (even if you are "cradle to grave" you still must rotate through roles/functions and chances are you actually specialize more than not, at larger first for sure, more the case).
Rant over... just felt this was a good post to make it!
Again to the OP, totally valid/legit question, just think it may set up a bit of false dichotomy. And I think the "error" is on seeing something so magical/special about "Acquisitions", and losing sight of the actual real estate business for which it is a function. By contrast, people get "development" much more correctly out the gate! I suppose this is because it so much easier to understand than the investment business (go see the posts on how butchered the talks on "REPE" are for example).
This is really well put. Most people in development are doing acquisitions as well, but it's just a part of what they do. How I usually frame this to younger people is "what pace do you want?". Acquisitions is go go go, spend 60-90 days on a deal, close it and on to the next one. Development (assuming you are handling cradle to grave) is much more of a long-term project. You are finding an opportunity, getting the opportunity under control, coming up with a vision/business plan, coordinating with 10-15 different parties to make your vision a reality, closing, executing on the development, and managing the project till a sale (whether 3 months after C/O or 50 years). Start to finish (finish being end of construction), you are talking about 3-5 years - and in markets like SF/NYC, could be 10+. Development is really like starting a business over and over and over. You're a serial entrepreneur. Acquisitions is more line 'em up and shoot 'em down. Neither is superior to the other - it depends on what you like and what you want to do.
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