Dump well-paid manufacturing/high tech PM career for Multifamily Development?
Background: 10-15 yrs construction PM experience, 180k salary, 15-25% annual bonus, project manager/construction manager for a manufacturing company, easy hours working from home in low cost area, married, no kids. Recently completed MSRE at a name brand school.
Goal: pivot to RE development management, don't really care what product.
I've talked with industrial developers like Prologis about PM and DM opportunities, but every time they either pay surprisingly low or aren't interested in hiring me at a higher level, and it seems tough to break into their development side, likely due to my lack of underwriting experience.
I see a TON of multifamily development job opportunities, especially at the VP/Director level that would likely pay well, but I feel because I have zero residential experience, no entitlement or underwriting experience I haven't been able to get my foot in the door.
Multifamily seems as though it will not slow down and has continually piqued my interest as a career path. I have an opportunity to join a small multifamily shop as a DM but at a much lower pay rate, and I'd be working under folks younger than me (ego check here).
Question 1 to you all; are there development career paths that will better suit my corporate/industrial/manufacturing construction experience you can recommend I look into?
Question 2; should I bite the bullet (on salary and ego) and pursue this multifamily opportunity to cut my teeth on residential, then pivot to a senior role somewhere else after a few years if I don't get the career progression I want?
Friday bump.
Unless you are dead set on a clean break from construction and a pure development role, I think the most obvious transition opportunity will be an in-house construction lead. Good owners rep construction guys with a good head on their shoulders are incredibly rare and IMO also incredibly valuable, as so many development people come into the business with a finance background these days.
Anything can happen, mind you, but coming into a developer as a VP of Construction Management or Director of Construction Operations or something, working for a couple years, seeing how the development people operate, and then making a higher level switch when an opportunity presents itself seems like a path better fitting your experience than trying to get a development associate role as a 40 year old.
Again, I cannot emphasize enough how much value an intelligent in house construction guy brings. Even the morons I work with are valuable. A smart one? Who sees the big picture? Good god.
lol appreciate the feedback. I'm also looking at in-house Director/VP level construction roles. I'm essentially doing that job at a large high-tech company now, although the titles are different. Would love to do it at a pure development/investment company instead of at a corporate owner. Things move very slow here, lots of red tape and low to zero visibility into the real growth strategy.
Digging a bit further into your comment, can you elaborate on what you feel makes an in-house construction sme good/exceptional? Hearing your side could greatly help me in my pursuit as I interview.
Unless the development company has an in-house GC component, there is a good chance that the only person in the company who knows how to build a building in the owner's rep. It isn't the development manager. It isn't the guy putting together debt and equity. It isn't the "dirt dog" finding sites. It isn't the financial wiz spending all day in excel. Someone needs to be able to both problem solve with the GC in OAC meetings 0(In my experience, our GCs PMs are like 30 these days but our owners rep construction guy is 55, so he's been around a lot longer) as well as call out the GC when they're slipping on schedule or sending bullshit change orders.
I've been around long enough in development to be dangerous in OACs and site walks but if a GC says X can't happen on time because Y happened so I either need to accept a two week delay or pay another $50k change order to fix the issue, I don't have the construction knowledge to say "That is bullshit. You should have prevented Y happening by doing this and you can still make X happen on time if you do A, B, and C." If the owner's rep is making $250k a year, they just paid for 1/5 of their comp right there, and I swear situations similar to that happen once a month on each ongoing project.
I think we need to understand why OP wants to get into development to really give the best advice here - I'd agree that inhouse CM/director of construction would be a place where OP could have and easy transition into a devco company; but if they want to be a "development manager" in the sense that they are responsible for underwriting, fundraising, and deal sourcing in their role (Investment management vs. construction/project management), they will need to target a role that has very little construction management duties and a lot of investment management type duties. Most in-house GC's work as a separate corporation (also doing 3rd party work), meaning they don't have much more exposure to "investment management" then you would be working as a 3rd party GC on dev projects.
I had lunch with a regional MD (think Trammel Crow/Hines type shop in a major city), towards the beginning of my career and he straight up told me that if you come in to a devco as a "construction guy" you will always be viewed that way - making it difficult to actually get fully involved in the investment piece. I've also seen this in action at my current company with people who have more traditional construction backgrounds and MSRE's.
That being said to actually answer your question - yes, my opinion is you will need to bite the bullet. You're not going to be able to land a job paying over ~$200K all in without some type of additional real estate job experience (entitlements, underwriting, etc.) I think you might have to find more of an entry-level job that focuses primarily on the investment and entitlements piece - once you have this experience, I think you'd be able to get back to where you are known but I'd guess it will take at least 1-3 years of making ~50% less than your total comp.
As some other people mentioned in the thread, your best bet is to actually network your way into a role at a small shop - you'll need to find a small shop (not REIT's like prologis) where everyone wears a lot of hats to find the best balance of experience and hopefully closer pay to what you make now.
Mind you, real estate companies are so unique that I'm sure we both are correct, but I disagree with the quoted above.
First, I was not talking about an in-house GC. That is different. I was talking about an owner's rep construction manager. This role may not exist at a TCR who has in-house construction already, but at a shop who doesn't, this is the person who goes to the OACs along with the developer and protects the developers from being out of their depths in construction conversations with the GC. Almost always, this person comes from a GC background, and usually was a GC for 10-20 years, so they are the perfect candidate to call the GC out on their bullshit.
Second, our owners rep construction guys make $200k-$250k a year with benchmark bonuses and like 0.5%-1% of the profits at sale.
Third, it would not surprise me that Hines would view things that way given their hiring approach, but making that shift isn't as hard as it's made out. One of my bosses made the switch at a TCR/Hines type of company and has been wildly successful being able to draw on his construction background. Perhaps you get branded as that at your first job on the owner side, but a job change is just a coffee date away.
I will just add that I do not think the above point is universally true. I'm sure some firms will make it much more difficult for "construction people" to ever be "deal" or "real estate" people, but others will far less limiting. That said.... I think the difference is really on the individual. Many of the "construction" types I've seen/know working in the devco world now (not for in-house GC, but owner's rep or proj. mngt on dev team), don't really try to learn the "finance" side and never really try/want to cross over that bad. Those that do take the time and effort... well, they do make the cross over. The point is the person has to take the lead to show their interest/abilities to do those functions. I think that is more the root cause.
To note, the OP has an MSRE, that in theory means they have more knowledge/skills in the real estate/finance domain, so they are at least starting with as good a chance as any.
Gotta say I agree with patrick_bateman_. Working as an assistant PM in-house for a multifamily developer right now. There is a clear division between our side (in-house GC) and the development side. To the development team, who admittedly knows little about the actual construction process, we are just a means to an end and "construction guys". Even an owner's rep construction job would be considered a construction guy, it doesn't matter. I will say the top roles at our company are paid very well, $250k to $350k plus bonus, and our president of construction is clearing $500k+ bonuses on projects of $1M spread out over a couple years.
Still though I have to imagine the development guys are clearing more in salary, and they get carry in these projects that's almost certainly more than any bonus anyone on the construction side is seeing.
I've been considering both an MBA and an MRED, and considering pivoting to a role at a small shop to wear more hats. Just trying to network and finish my current project before making any jumps.
Friend of mine works in REPE and the way he talks about their construction managers is the same, they aren't viewed as "partners" in the business. But they are extremely well compensated.
CRE nailed it. Obviously your day job will be focused on the PM side, but all those development pursuit conversations (if the culture is open and right) will be inside and you’ll be needed during them. I just spent a weekend with a buddy who’s been a GC, then PM on private developments, and switched again to a GC that also runs a private dev group’s construction management wirhub the same company. He’s starting to really undertand the product and development feasibility side and I’m absolutely certain will crush it after a couple more years. The guy could walk a site for an hour one afternoon and see the product, understand zoning, knew all the issues with timing with the municipality’s approvals, etc, ask the right questions, and then can anticipate issues with the actual construction component. He’s a few years away from being massively valuable
First, let just say I 100% agree with the comments from CRE, construction mngt roles within devcos are very legit and you could be very valuable in such a role. Once inside a firm, jumping around or just "up" is far easier. Going in for standard 'real estate' type roles (i.e. more finance based) will put you at a severe disadvantage to 'younger' peers, but that may be a good route nonetheless, but IMHO, a job that maximizes your CM/PM skills will be best. If you go to a firm that has 'life cycle' style teams, you can naturally progress through all of this, and those firms are most likely to give you some credit for your seniority and YOE.
Now, to directly answer your questions....
1. Yes, I would look at industrial developers, perhaps focusing on those your current firm leases from? (I suspect this is how/why you spoke with Prologis?) There are also other 'user' types that are building out more legit in-house real estate teams (i.e. literally Amazon), might be something to consider. Still, developers with a focus on distribution, logistics, warehousing, etc. will be your best bet. Join NAIOP to find lists of these firms and their people. Industrial is a BIG sector, and even if current news is slightly more negative, it has a huge growth runway ahead of it!
2. Maybe... if you like the firm and other unique details, this might be a good gig. That said, as stated by CRE, your construction skills should be highly valued by your next employer.. if that isn't the case here, then it seems suboptimal. Will note, I have personally seen people come from more 'senior' CM/PM roles (like with GCs) and do exactly what you suggest (take downgrade in seniority/rank and even pay), to get into development firms (this happens at my current job often tbh) and are often very happy with the move. They don't go back, still they are usually hired BECAUSE of their CM/PM experience and are expected to use it while they learn and get up to speed on the 'real estate' side stuff.
Final points.....
- Your MSRE and it's networks SHOULD really help you here, it isn't the same as direct 'experience' but I'd hope you developed a good deal of finance/excel skills, market knowledge, and other abilities to operate in the real estate world. I'd 'lean' on the degree to present as more skilled/experience in that respect (assuming you can legit back it up).
- You should be qualified for a role like 'Development Manager' which is typically a rank above 'Development Associate' (note, every firm could have totally different title/rank structure, like at some places... DM could be AVP or VP with next step Director vs. the traditional Manager -> Director -> VP progression). At a major devco in decent to large size city... a base of $150k-$175k plus 30-50% bonus is very reasonable. I realize this may not really 'top' your current pay, but I'd think a good trade if you want to make this 'jump'. Some larger firms may prefer to see you as Dev. Assoc. first, then you have to decide if a good trade (like take lower title but at better firm, that is typically the reality of such 'jumps'
- You mention 'low cost area'... are you open/willing to relocate? Are you in a 'big city'? This will determine a lot of what firms exist and what pay is reasonable. Industrial developers (and multifamily ones for that matter) do often work cross states and people cover big territories (less true for office and retail developers), but being in the HQ city or a least a regional hub office is very critical to get 'in' and up to speed in this industry. Remote/satellite is hard for such as jump. Not sure if this is a limiting factor or not, but had to mention it!
This is great insight, thank you for the detailed response. I agree with all your points (CRE's as well). I am definitely open to relocating, I recently moved from a larger city to support my employers goals and am currently considering going back for a similar role. I also agree with your strategy of joining a devco with the intent of being a construction sme first while I get up to speed on the development processes. In my search, these opportunities have been really scarce as the employer seems to only want to pigeon hole me into a construction manager role. I'll take your advice of joining NAIOP to better my network and find more leads.
I need to work on how to better showcase my skills learned from my MSRE on my resume. I'm currently working on my final thesis (an end-to-end development project), and maybe I can later customize it to target a potential employers product and submit it with my resume as a work sample.
It is good to hear the construction folks who moved to your company to pursue development career paths are satisfied with their choice. Making the jump to development has been a goal of mine for a long time now, and I refuse to give up on it. I think the titles and salary ranges you mentioned are reasonable and I would not be complaining to land a job at that pay.
Another option I have considered to break in is to try to do my own development, as I do have some ideas on how to be a first mover on a product related to large industrial/manufacturing developments. Taking a project to full completion would obviously be even harder, but perhaps along the journey of trying I will end up at my initial goal.
A few points I'll add...
- Your situation is absolutely one where "networking" and "direct contact" is the best strategy, since you have a unique background, don't expect it to be exactly advertised for. When developers want to hire "CM" background people, they often just poach from the GCs and other firms they work with, so not advertised as frequently as a result.
- A lot of firms have boiler plate job descriptions for each rank/title (like one for Associate, one for Development Manager, etc.), and they just re-use for each vacancy regardless on whether they want a "finance" or "design/architectural" or "construction" type person when they actually have a strong preference for one of those or something else. Thus, they just sort resumes and interview accordingly, so you should to any/all that interest you even if the job description is "generic" of sorts. (i.e. we are all too lazy to update job desc. each time....).
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