Hi all,
As someone looking to jump into real estate development and pursuing Developer roles, what are some of the best property types and markets to pursue for the mid / long-term in the US northeast region?
I have some experience in mixed-use/commercial/hospitality and currently working on institutions, e.g. healthcare, but these experiences are in architecture/construction, not actual development/acquisitions, so I'm betting there are significant discrepancies when it comes to how I should be looking into these diff property types, reading into the markets and greater economy.
I'd like to set up some long-term goals for which property types/markets I'd like to focus on (and learn enough to venture out and develop on my own someday).
Looking to expand my knowledge and insight, thanks all!
Following
For the Northeast? I'd say resi. There is such a big housing shortage that there will be a lot of demand for the foreseeable future. Lab/life science is overbuilt. Office is overbuilt. Hotel is marginal in some markets, there might be some new hospitality development. Industrial got red hot and is slightly overbuilt, depending on how the retail economy continues there could be more need here. I don't know enough about retail.
But honestly, if you're trying to move over to a development role from construction/architecture, I'd just take what you can get at this point. There is definitely vertical specific knowledge, but you'd be early enough in your career (I'm assuming) that what's more important is just understanding the basics of development: modeling, financing, entitlements, design development, construction, leasing, exit/refi.
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Because you have a background in Architecture/Construction I'd say you should focus on areas where your experience brings more value. More complex deals then. I don't know how much of this vacant office is going to get converted to Resi but it's certainly being written about everywhere and so adaptive reuse of properties especially in the Northeast where there is always going to be some adaptive reuse projects would be a good idea. If you could get some experience with Tax Credits (Historic Tax Credits, LIHTC) that would help being successful on these types of deals. It could be adaptive reuse for hospitality as well since you have hospitality experience.
You could also apply everything I said above to hospitality reno project.
Can’t predict the future or chase trends. Play to your strengths, keep an open mind, and work on your development skills wherever you land. They’re mostly transferable product type to product type.
Agreed on this. I think people overrate being a specialist in the space. At the end of the day you're talking collecting rents and building buildings.
I'd say there's a soft line between for sale/rental for housing/living for cash flow purposes, and commercial/residential from leasing/tenant structures, but it's all kind of the same gambit. Obviously being a specialist gets you the devil in the details but you'll pick up on it in passing faster than you'd think. If you've got the opportunity to explore new asset classes in a multifaceted shop (Hines/Tish/Related/TCC) that you should take it seriously and you'll learn quickly.
Thank you all for the valuable insights! Agreed I should play to my strengths instead of trying to read too far ahead into the future.
On a side note, I am looking to get my MSRE or MBA to better my odds of transition + up my finance/business acumen, and I've come across many, many mixed messages about which is the better option. I think the decision may ultimately come down to what I'm looking to get out of the degree and where I'd like to be career-wise, but any opinions on this? I will be working full-time and will be taking the course/program online, part-time. I know it's much better to get the real-world experience but it's been a tough market = no luck so far making the transition = may be a great time to pull the trigger while the market's down in the gutter.
I did the MBA route and had the same thoughts as you. I ultimately went with the MBA over a MSRE because I was going into it with far less professional experience than most of my peers (I had less than three years of experience by the time I matriculated), so I really wanted to ability to get academic and summer internships. A 1-year MSRE is more helpful if you're already pretty far along in a related field (6+ years, imo) and have a network you can leverage. Making a full transition in only one year seems tough to me, but then again some folks are better at that part of career development than I am and it clearly works for them, so I'd say think about where your strengths lie. If you feel confident you'll be able to do a ton of networking in a year and land interviews without a very structured recruiting process then an MSRE could be better. If you want a more structured program and more time to get acquainted with the industry, an MBA would probably be better.
Data centers continue to be pretty hot especially in and around the large metros.
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