Pivoting from Real Estate PE to Development - Looking for Perspectives
Hi everyone — looking for some candid advice from people who’ve made (or considered) this move. Background: I’m currently at a well-known, institutional real estate private equity fund focused on value-add / opportunistic investing. Prior to that, I was in real estate investment banking at a top platform. Day-to-day now is what you’d expect: underwriting, structuring, IC memos, working through diligence, asset-level modeling, and interacting with sponsors. Strong training, good comp, solid brand. Why I’m considering development: Over time, I’ve realized that the parts of the job I find most engaging are when the capital decisions directly intersect with the physical outcome of the asset — construction, repositioning, redevelopment, conversions, etc. While PE has been great training, a lot of the work is ultimately high-level diligence and capital allocation, versus being deeply involved in shaping and executing a project from the ground up. Long-term, I’m interested in being closer to the sponsor side and eventually doing my own projects, and I’m trying to assess whether moving into development earlier (vs. staying in PE longer) makes sense. What I’m trying to understand from those with experience: 1. Day-to-day reality: How different is the actual day-to-day in development vs. REPE? How much time is truly spent on design, entitlements, construction, and execution vs. asset management / reporting? 2. Type of development firm: For someone coming from institutional REPE, is it better to join: • A large, well-known developer • Or a mid-sized / smaller shop where you get broader exposure? Any strong opinions here? 3. “Starting over” question: Does a move into development effectively reset your career progression (title, comp, seniority), or is PE experience actually valued on development teams? 4. Risk vs. reward: Many people warn about lower near-term comp and higher risk in development. In your experience, is that tradeoff worth it if you want to be a real sponsor long-term? 5. Regret check: For those who’ve made the jump — do you regret leaving PE? For those who stayed, do you regret not trying development? I’m not unhappy where I am, and this isn’t a knee-jerk move — I’m just trying to be thoughtful about long-term fit and trajectory. Appreciate any honest perspectives, especially from people who’ve sat on both sides.
Never worked in PE but if you want to be a developer go try and work for a small to midsize developer in your market. You want to be somewhere you can work on all aspects of deals.
More likely than not there are no jobs at the moment - lots of seasoned folks out of jobs. That just means you’ll have to network hard.
I’ll also say a lot of development shops are run by two people - one who have extensive experience with execution (land, entitlement, design/construction lease up) and one who can source money (HNW capital, LP funds, etc.) and deals, and has a good network for dispositions.
If you’re in PE your going to get pushed to the latter part (which is fine), your goal would be to understand execution enough to be able to partner with someone who is really smart and good at execution.
I am actually going through this right now. Moving from an industrial platform to a small developer. My move was more driven by better WLB and better upside after my current promote donuts.
I targeted private, small trade developers because that way I could be involved in everything. I have read on this site that big developers silo people onto one project and you may be stuck doing entitlements for three years without seeing any other part of the development. With the developer I’m moving to, it’s very much you run everything.
For me, a small developer meant I lead the deal, less bureaucracy, and better WLB. The WLB was a major point, went from a very toxic culture in office to partial WFH and a culture that pushes lunches and drinks with brokers, so much better.
Downside to this is I have a base and promote but no annual bonus. The promote is small % of all profits on deals I run which means scaling can have big payouts but also means that if I suck, I won’t be making much. Very entrepreneurial, eat what you kill. In my platform, I would get the same base (market standard) but a 50% annual bonus, plus small promote. But promote is meaningless as we aren’t doing much and I have no conviction behind. I might have stayed if I believed in our thesis but then WLB would still be a massive factor.
Happy to share some insights. A bit of my background, joined a family office as an analyst that was just launching an LP platform, helped build that business up over the subsequent five years before we pivoted into building a GP platform as a developer. I spent the next five years leading deals, then managing project executives and ended my final years of tenure as COO of that business. Overall we built or invested in 5,000+ units over the previous decade.
My former firm is small to mid sized, specializing in multifamily development and investing and utilizes third party property management and construction - keep in mind those are key factors in how your experience is in development. Generally, the larger the firm, the more segmented/linear your responsibilities are and you have more resources at your disposal (such as having an acquisitions, development, construction, property and asset management team).
At the smallest firms, you are essentially all of those teams, at once. As such, your responses here will vary and you’ll get some disagreement to this but that context will help you get a better picture for a potential development career.
1. Much, much different. The market and financial analysis are probably the most similar but outside of that, your day to day will be significantly different. As an investor you get the benefit of a wider lens and the activity flow is “chunky” - you have big rushes of work followed by monitoring your investments.
Development you are in the trenches and moving the ball inch by inch. Meetings on meetings on meetings with a ton of time spent in the entitlement, design and construction phases - one call you’re talking to your lender about the bank budget and project progress, the next you are talking logo design with your property management, the next you are arguing with your general contractor and concrete sub about whose fault it is that the steel was installed and poured in backwards.
The fun and challenge of development is your ability to wear many hats, communicate in everyone’s preferred language and somehow smoothly keep all the balls in the air to not lose schedule or budget (or both).
2. If your end goal is to eventually run your own projects/company, I highly recommend a small to mid sized, well capitalized firm. Liquidity is an essential part of this equation - today’s market is the perfect example of this. Many, many great developers are stuck with no deal flow because they don’t have the capital to do their deals. With no deals, you have no learning opportunities.
I’ve already cited the benefits (and challenges) of working at a small to medium sized firm - you will lead and learn all the different elements of development. With limited operational resources, the firm will have to rely on you to handle many things you wouldn’t be allowed to at a large firm. Your goal should be to be an B+ (ideally A-) at everything - entitlement, law, design, underwriting, construction, marketing, financing.
The good (and fun) thing about development is you are always learning so it is really great at building a “worldly” skill set. If you are intellectually curious, it is a very fulfilling career.
3. This will vary firm by firm. I would say generally the bigger the firm, the more likely they are to value the LP experience. The reality is that they inherently are very different skill sets and although some of the core skills are transferable (negotiation, leadership, leverage, due diligence, market research, legal documents in particular), most skills you need to succeed in development you won’t bring from PE.
4. I hate to non-answer you here but the truth is “it depends”. Mainly it depends on your preferences (for autonomy, work life balance), long term goals (owning your own firm vs. being in an existing firm) and how successful you are (sounds dumb but I’ll explain). Generally I would say yes, in your early to mid-career steps you will be taking a discount to your LP equivalents, particularly in relation to your responsibility to pay ratio. Nearly every developer remembers the early days of realizing that you don’t know anything about interior design (pick your subject), looking around for guidance and realizing that you’re the one who needs to figure this out and make the decisions.
Long term, it gets a bit more complicated and this is where it can pay off big time. Assuming you follow the traditional path and start your own development company/do your own deals, you'll still have to answer to your LP/investors but you’ll basically have full autonomy to lead your deal however you see fit. You’ll make all the day to day decisions, so you’ll own all of the mistakes and will be on call constantly - if there are any issues, eventually you’ll hear about them and likely will have to handle them. You’ll probably never really have any time off but those of us who stick with development love it enough where you don’t want it to be off.
The upside is you lead the charge and you’ll be the face of the project so you’ll get all the glory if it goes well. Most developers are hardly putting any equity (usually 5 to 10% of the requirement and they even syndicate that out) while having the upside to gain 30%+ of deals that go really well. If you have the magic touch, you can make many multiples on your money more quickly than the LP track. Many will debate me on this but generally I would the LP track gives you a higher floor and is more of a gradual wealth building approach while development allows you to potentially multiply capital much more quickly.
5. I’m fortunate where I never had to choose either/or. I’m very thankful for both experiences because they each taught me very different skills. Hopefully the preceding details in my post lay out the pros and cons of either approach - generally development is best for those who want control, value autonomy, want to be a jack of all trades, are good communicators and enjoy risk taking. LP careers are for those who want a more stable situation, enjoy thinking like investors and prefer not to be as hands on.
Again, many of these insights will vary firm by firm but overall that should give you some good guidance on the different paths available. Feel free to ask any questions you’d like and happy to give additional color.
Have worked both institutional and for smaller developers. I would very strongly think about if you really have the gumption to go off on your own and develop projects. If not I would stay in PE as you can do value add/core+ stuff on your own much easier and do not need ground up experience. There is immense risk in ground up, you'll need a balance sheet to sign on guarantees, very hard to raise money for pre development, and very hard to hit promotes. You're always over budget and just very hard to wrangle contractors. Development positions are also comically underpaid and new construction is at a standstill in a lot of places. I would stay in PE
This is a thoughtful crossroads — and you’re asking the right questions. The biggest difference day-to-day is that development is far more execution-heavy and relationship-driven: more time with architects, municipalities, contractors, lenders, and solving real-world problems, and less pure modeling (though underwriting never goes away). If you want to truly learn how projects get built, a mid-sized shop often gives broader exposure and faster responsibility, while large developers can feel more siloed but offer brand and structure. It’s not a full reset — institutional PE experience is respected — but comp may dip short term and progression can feel less linear. The tradeoff usually comes down to this: if you want to be a real sponsor long-term, development experience is hard to substitute. Most people who switch for the right reasons don’t regret it — but those who value stability, comp consistency, and cleaner career optics often prefer staying in PE.
I am a developer that contemplated the move to PE for a while, so the opposite of you. The only reason I would make this move is for the WLB. You will get paid a lot less for the foreseeable future, so I think first step would be coming to grips with that. If you want to do your own projects, then yes you want to get to a smaller developer asap where you're heavily involved in the whole development cycle and can get hands on experience. Although there will be less hours than PE, you will be very much hands on and in the weeds when you are working. As someone who has had to wear many hats and at times felt like the money wasn't enough, that's when thoughts of a PE move crept in.
Whether your PE background will be valued for this pivot? My experience is some firms are more pedigreed and will appreciate what it took to get to your current seat, and they will believe you can get there on the development side. Other scrappier developers that don't care where you went to college that want real world experience / more entrepreneur hustler types, that could be more challenging given you are the numbers guy and not the execution guy, at least not yet.
I will say - I have close friends in PE and when I ask them if my development skillset would be valued there, it's more like eh why would you make that move? They say just keep chugging at the dev firm employer meanwhile do deals on the side, forget the PE grind. That's coming from people who made over 300k at the associate level. But there's also seemingly a reckoning going on in that industry about the actuality of real promote payout likelihood, just like you're seeing in development right now. Seems grass is greener for them at times too, just like me as someone who made it to the development seat I targeted for years.
I’m currently contemplating the opposite move (GP development/acquisitions → LP REPE), largely for compensation and platform reasons. In our market, especially at mid- to small-sized shops, development deal flow has slowed materially and capital has become more constrained. In my experience, that’s led to a disconnect where responsibility and scope expand (sourcing, leading deal execution, running entitlements) but cash compensation hasn’t scaled accordingly.
Development can be intellectually rewarding, but unless you’re at a well-capitalized platform or meaningfully participating in promote (which feels less certain in the current environment), the risk/reward from a cash comp and lifestyle perspective has become harder to justify, particularly in high COL markets for those thinking about buying a home or starting a family.
To add to that, given how lean the firms I’ve worked for have been.. after 5-6 years of doing this, the only thing keeping me back from doing my own deals is having enough disposable income to use for DD/pursuit costs, post a deposit, etc. Hard to do save enough dry powder to do your own deals if you’re making less than $300K+ in my market. So my thought is scale my W2 income to ramp up savings, hopefully make more meaningful capital markets relationships on the LP side, then in a couple years reassess and either move back to a developer, hopefully, with a more senior title or start my own firm with a partner or two.
A practical advice. Best path would be small shop where you can sea the full deal flow from planning, authorization, supplier sourcing and management + if you can make a simple renovation project even a single flat renovation and you will see how many inputs are involved if you ever want to be a sponsor
Rem libero est qui praesentium quisquam et voluptas. Quo et esse sunt et ut. Quo eum vel nihil.
Dolorem illum cumque aspernatur dolore laborum. Aut sed reiciendis et quia repudiandae non et est. Reprehenderit quibusdam et qui repudiandae aut esse sint atque. Vitae ipsa reprehenderit quia officia sunt.
Ea ut sunt sint doloribus aut voluptatem. Dolorem aspernatur cupiditate totam error ullam accusamus perferendis. Omnis corrupti omnis nisi ipsa repellat error dolorem. Autem aut laboriosam qui dolore natus aut ut. Consectetur sed ab voluptatem in aut.
Ipsa dolores nulla in facere vero similique impedit. Quis debitis laborum voluptatibus atque occaecati sed facilis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...