Real Estate Development - Advice/Guidance in Transitioning to Project Management?
Joined as an associate at a well-known developer (Hines/Tishman Speyer/Related/TCC/Sterling Bay/etc.) roughly a year ago focused on complex/mixed use projects with my prior experience being mainly acquisitions and asset management. My first year in this role in development was largely focused on running the underwriting for the multitude of scenarios and taking leadership on a handful of project workstreams(accounting/marketing/some minor design input). I've been told from my managers that I'll have support from an analyst to free up time for me in a project management capacity (running meetings/agenda/driving the process with the construction manager).
My previous experience in acquisitions/asset management was more in a finance/investment capacity (not to say that I won't continue carrying that skillset in my current role) vs. a construction and project management role. Given it seems to be the most challenging step in the real estate development career lifecycle, is there any advice or guidance you may be able to provide as I progress in taking on PM duties? How did you learn to manage the process effectively between all stakeholders while driving the delivery?
Thank you in advance for all the insight and suggestions. This forum is a life saver for industrious, young guys/gals like myself!
redever
pudding
CRE
Talk to a lot of people, read agreements, stay organized, hope for the best.
You end up getting better at being a PM but a lot of it really comes down to experience. Make sure you know all your delivery dates and have a good handle of what needs to be done to hit those dates.
Given the shout out, I'm happy to answer, but first major caveat.... while I work for a developer that would very much fit into the "etc." category of peers you list, I am not directly on a development team and have always been in the finance/cap mrkts/strategy side of the business and didn't do the traditional route of project mgnt as part of my career. So my advice is more general to the situation, especially with context of the type of firm, like where I've seen this go well and poorly. That said, there are MANY users on WSO that have done this, so you should be able to find so more direct peer to peer support!
- This is a very normal/natural progression, so really don't fear sweat it! Further, if you work for a major firm like it sounds, they know this too, and are likely to have a lot of support and guard rails up as you move into this role. So, hopefully you have a strong, direct internal mentor (likely your direct supervisor) and you also have some new peer level mentors. DO NOT be afraid to ask questions, lots of them, the WORST thing you can do in this position is just assume you know stuff, check and verify. I wouldn't worry about looking "dumb" with bosses and peers (hopefully your firm has good culture in this regard).
- Build relationships and fast, PM work involves managing tons of teams/firms/suppliers/contractors/municipalities/customers/etc.... they are all out for themselves (as are you), and being the developer they all want to stick you with the bill (and the customer/tenant wants to lower your price and stick you with expenses, no free lunch). So, having some mutual trust with major players (architect and GC/CM most importantly) is critical, also make good with your main contacts with the city. If they like you and trust you, they are more likely to treat you well, stand up for your firm's interest, or at least try not to surprise you so much (they still will). Trust here is a two way street, but this really is where the some of the best PMs seem to shine, they can just make a call, and get a problem solved, and it is usually because the person answering the phone likes them.
- Read everything, know your details cold, and when something looks off... call bullshit. It shocks me how easily something can go off track or overbudget, and how that one thing is bound to fuck everything up. It's your job to contain, control, and fix that as best you can (it will still get messed up). Clearly it's not your fault if a sub-contract installs something in the wrong place, but it is your job to make sure the GC get them to fix it as fast as possible and not stick you with a change order (they will blame the architect, they always blame the architect..). Also, if senior mngt/equity partners are touring the site (and they may do so with little warning), you can look good (or bad) by how well it goes. Like is the site in good order (gotta stay on GC for housekeeping) and do you have good explanations for questions (like when is that being installed, what's next, what is that, etc.) also just knowing all the details of the project matter (like not knowing details about ceiling heights or whatever can make you look bad) matters.
- Fight for you and your firm's position - Really this is the most important, you are on the front line if the project makes or breaks in many ways. Clearly you can only control so much, but the best PMs are deal makers who get results in the face adversity. That is general leadership stuff in my mind, not really something you can 'pre-learn'. I'd say at this level, your boss and team above are your weapons to use as needed (but sparingly also, for obvious reasons). Utilize your team and resources given, but just know, at the of the day, it's you who will make or break it!
Thank you, redever! Massively helpful! Ask questions/communicate, know the details, build relationships, and drive outcomes.
Thanks for the call out. And I feel I can really add some value here. I made this similar transition 18 months ago. I am an acquisition / asset management person who made the transition.
First things first - project management is really hard. And it’s really different from getting a deal done. You need to stay on top of your consultants to make sure they get items done, but also not ride them too hard. This skill takes times. Your job in development is more akin to a maestro. You make sure everything happens at the appropriate time and you cue the appropriate person. Be on top of schedules and it’s always okay to not know how long something will take - just figure out who to ask so you can add it to your schedule.
Second - construction is hard to learn. You’ll pick it up on the job. I have barely scratched the surface. And I still have a hard time with it. Thankfully, I don’t do too much as I’m more focused on the business side of things and we have multiple PMs on my project. With that said - I’ve learned construction budgeting is just as much best guess as putting a proforma together.
The biggest advice I can give is to stay organized. There will always be a fire. Whereas acquisitions is slow and then it’s 100 MPH for 60 days, development is a solid 30 miles per hour at any given time. It’s a much more complex area of the business because you need to know about more. To me, it’s more about business skills. Acquisitions is filled with: do I like the deal? Yes. Ok, keep moving. If no, throw it out and keep searching. In development, you can’t do that. You need to deal with all the BS and problem solve. And then solve some more and do it again. It’s much more tiring I’ve found as well, just because you’re moving at 30 MPH the entire time.
Hope I’m not rambling too much. If you have specifics questions, I can get into it.
Thank you, pudding! Didn't realize you've also made the switch so appreciate your input. Completely agree with everything you're mentioning. Have found construction to be difficult to pick up and staying close with the construction manager to pick up/understand the specifics. In terms of staying organized, do you have any tools/software/processes that help you stay abreast of status/next steps/etc.? Understand everyone has preferences, but curious if you have a system that may work for you that you'd recommend? Thanks!
Unfortunately no I don’t have tools. But I stay meticulous on my notes. Especially as you could be working through something over 6 months. I write detailed notes on next steps and why I need to do it / how I get to the finish line.
Thanks again pudding!
First of all, thank you for the tag. I'm rarely on these days so I apologize for the late response, but I appreciate you reaching out. Second, pudding & redever gave you fantastic answers, so you're in good hands. As for me, both of my development internships and my first development job were all very project management focused, so while I never made the transition itself, I certainly had to go through what you're going through now.
Some tips:
1. The mindset you need to take into project management is that you are the end-all, be-all, ultimate responsibility for everything. Nothing happens unless you do it and everything that goes wrong is your responsibility, even if it isn't your fault. You need to own absolutely everything and act like it is your money on the line, double checking facts, triple checking people, and wake up in the morning thinking about what you forgot to do yesterday. No matter what happens, you need to have it in your mind that you are delivering a top class product on the delivery date on budget, come hell or high water, and that obstacles to doing so are going to pop up weekly, if not daily sometimes, that if you do not fix will completely derail the project, your earning potential, and your boss' and investors' returns. You cannot be a passenger in project management if you expect the project to be successful. There are a million reasons why something doesn't happen, but only one reason it does - you.
2. That does NOT mean however that you personally have to do everything - far from it - you just need to make sure that it gets done. Your architects know more about design than you do. Your contractors know more about construction than you do. The city knows more about regulations than you do. Your lawyers know more about the law than you do. Hell, the Waste Management sales guy knows more about trash compactors than you do. Everyone you interact with and are responsible for will know more about their respective field than you, but instead of doing the work yourself, you need to keep a big picture mentality at all times and make sure that everyone is driving toward the outcomes that you desire. Ask for specific completion dates, ask for specific costs, ask for different options, and do not hesitate on making decisive and intelligent decisions. Let the trumpet player play the trumpet. You're the conductor. You keep the trumpet player on beat. You play the orchestra.
3. Become a person that other people want to run through walls for. I have seen more than a handful of smarmy Ivy League grads with fancy watches drive their fancy cars onto a job site and condescend to the country boy GCs about schedule while waxing poetic about cap rates and what kind of exits they're going to see. No one on-site is going to move mountains for you if you do that, however, and you will be shocked to learn how much GCs can accomplish when they actually want to succeed for you and are rewarded for it. Buy the team lunch if you schedule a meeting at 11am and you know it's going to run long. Ask them about what their roadblocks are (usually the architect) and see how you can help. Don't chew them out constantly and demoralize the entire job, even if they keep fucking up. Depending on your company policy, give them literal bonuses for kicking ass when they do. I've handed out thousands of dollars as "motivation" before because it was Thursday at 5pm and we had people moving in on Friday at noon and still didn't have things finished that we needed to get a TCO. You are all in the trenches together and you need to be the kind of person that everyone wants to perform for, not just a person that they're contractually obligated to perform for.
4. Know your shit. Learn how to read change orders, change order logs, oco's, and understand them beyond it just being the hard cost contingency line item in a model. Learn how to read architectural plans, not to a level of expertise, but so if you need to look up if a building exterior or a floorplan is built correctly, you know how to do it. When someone asks a question and you know the answer off the top of your head, because you simply know the product that well, you quickly earn the respect of the people in the room. Listen to everyone. Ask insightful questions. Learn as much as you can.
5. None of the above will come naturally or immediately. You will not walk onto your first project site with the perfect mixture of confidence and humility, be able to coordinate like an expert with a relentless focus on the big picture, be a motivation leader, and be an expert in your field on day 1. All of this takes time and with time comes authenticity. What you can do in the meantime is take notes, create checklists, ask questions, and spend as much time on-site as you can. Simply by writing things down and being around the project, you will learn and notice things that you may not remember or think of for a month, or six months, or six years, but you are absorbing knowledge that you can't get behind a desk starting at the model. No keystroke in excel will ever give you the amount of pride you will have when you reach down to pick up a wrapper off the ground at the front door of your finished project, because you can't stand to see it disrespected, as the sun cascades off the storefront glass and you look around to see the perfection that your efforts achieved.
Happy to answer any specific process questions as my points are a bit heavy on mentality and touchy feely things, but to me at least, the key part of this transition concerns your mentality and soft skills as a leader.
CRE great description! Curious to hear - how does your firm handle business side vs project side (construction)? For instance, at my firm we have a development manager who deals with all business related issues and works in tandem with the construction PM. Business side handles financing, JV, leasing, business consultants, IR, etc. Whereas construction side handles directly overseeing the GC and subs / architects etc. business side will work in tandem with the construction side but we split the work. Business side sort of but not really runs the show and keeps the construction team focused. How do you guys split it?
That is how it is supposed to work here too. In reality, our in-house construction team is incredibly weak and lack accountability, so if I don't do certain things on the construction side, they simply won't get done. What should be a 50/50 split is more like 80/20.
Thank you, CRE! Very helpful advice! Salient points that will be top of mind going into 2023.
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