Mid-career repe to development
This topic is covered pretty extensively here, but mostly from the junior side.
I’m a mid-level acquisitions guy (~8yrs of experience) at a repe fund that is pretty hands-off of deals (we JV everything). I’m interested in moving to a development firm in a combined role (acq + dev mgmt). Motivation is I want to actually build stuff vs just doing deals/the financial side, though I do still enjoy that part.
To be more specific, I’d like to be more involved in the design and construction of the buildings. And interface with the architect, GC and consultants versus just our development partner, who then does all of that.
My problem is I’m probably too far along in my career for a lateral move to be realistic. I won’t add value on the project management side as a development manager and it’s too big of a pay cut to go any lower than that.
What are the best options here? I’m thinking maybe try to find a pure acquisitions/capital markets role at a development firm and so even if I’m not the point person on the projects, at least my firm is and by extension I’d be closer to the action. Reasonable? Otherwise I could wait and try to do some small projects on my own (flip houses, etc.) but the problem there is it becomes extra work on top of my day job, where I’m more interested to change my day job. Curious if others have been in this scenario and what they’ve done.
I'm in a similar boat to you at the moment and am curious to hear other people's thoughts. I can tell you that I've gotten absolutely no traction in any type of pure development role, but people are more open to you coming in as an acquisitions VP/director/etc. Essentially you're out in the market finding sites, putting together entitlements, closing on sites, etc. and then transitioning the deal off to a project manager.
I think you're on the right track in regards to focusing on an acquisitions role at a development firm. At most development firms that will give you experience interacting with consultants to figure out a preliminary budget for underwriting, the planning process, and at least the beginning of the entitlements process. You'll also likely get to manage the financial side of the project throughout construction as well (not as sexy, but still great exposure).
Don't sell yourself short. You can still add value and I'm sure there are some development shops that would value your experience. In fact, my last VP worked at a Carlyle-like fund before transitioning into Vice President of Development at top 10 development firm that I used to work for. He was one of the hardest workers in the office. An absolute grinder.
You could definitely find a development manager role. I would think a private equity group would fund many development deals at a time, whereas even a large development shop would spit out only a few deals a year. So maybe if you weren't involved in every detail of one particular project, you probably have light experience with a ton of deals.
Flipping houses is a full time job. It is very difficult to source deals, schedule contractors, and make a significant profit all in a reasonable amount of time while working a full time job. Ask me how I know.
What does a "top 10 development firm" even mean?
Good question. I meant top 10 for multifamily based on apartment units under construction. But that was 2019’s ranking, I believe.
How do you know?
Because I quit my job to flip full time.
I know someone who did exactly this (Acquisitions guy at an LP equity fund to a GP developer) and it was an extremely challenging learning curve. It's certainly doable, just very difficult.
You are spot on, your best best is to find pre-acquisitions role with a Developer, scouting for land sites, helping tee up debt and equity. Look for a firm that has a hands on development manager who can get involved early with you. Development firms usually run lean so you will likely have the opportunity to get more involved with the design and construction aspect as you get more experience.
"You are spot on, your best best is to find pre-acquisitions role with a Developer, scouting for land sites, helping tee up debt and equity"
Agreed and the best thing would be to avoid taking a siloed position as a "in house capital markets guy" (not that that would be the worst thing tho), ... And I think the best way to get that broad responsibility would be to go to the smallest team you can find so you'll wear many hats.
What was so difficult? Was it because they came in at a senior level with no real previous development experience and were expected to know stuff they had never worked on? I can't imagine lateralling from a junior perspective would be all that difficult?
Unless you're talking about an incredibly junior level (1-3 years) where you are a pure excel/powerpoint jockey, it would absolutely be pretty difficult.
Thanks all around. Sounds like there’s some consensus around getting a foot in the door through the deal side then picking up the development side along the way, and that it’s a realistic move for mid-career LP acq, not only available to juniors.
To be clear, it's not because you're coming from the acquisitions side. This is how most people break into a development role - they come on board with some skill set or degree, and get paired up with a senior PM for a deal, and then gradually get more autonomy.
Also, as prospie said, you'll be far better off at a small firm than a "top 10 developer" to use someone else's term. Smaller shop gives you a lot more ability to get your hands dirty. Never understood why people bask in the reflected glory of the size of their employer; especially for a development role, hiring managers will be far more impressed with a person who has run one challenging deal themselves, than with someone who has worked on 10,000 units of housing for Hines (or whatever big developer). As in, it's not even close.
That’s a good point. The challenge will be finding a good small developer. My network in the city where I live isn’t great - haven’t done a whole lot here. I’m guessing these guys aren’t posting on LinkedIn so probably involves some proactively reaching out and guessing on their reputation
Curious if you can PM me what comp you're getting and in what market?
I can think of at least one person at my current firm who did a jump like this. But they were more "senior" (I'd guess closer to 20 yrs total exp). They had exp with an asset class that the team that hired them wanted, and they could focus on finance/acq but also had leadership skills so given higher rank (but maybe a level lower if they had all exp in development tbh).
I don't think it is easy to jump to make without some downshift/lateral, unless you go into a more pure finance/acq/cap markets role at the devco (which I don't think is your goal by your post). That said, if you are a solid professional in your field, you can find a devco that sees the value you bring, but this requires more a relationship move. If you try to go in via front door applications and deal with HR, this could be painful.
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