Seeking Advice: Best Employers for Gaining Experience in Real Estate Development
As a recent graduate eager to enter the real estate development field, I am seeking advice on selecting the right employer. My primary goal is to gain valuable exposure and experience that I can eventually bring back to my family's development business. What key factors should I consider when choosing a company to work for? I'm less concerned about remuneration and more focused on long-term skill development and growth opportunities.
Hines and Carmel partners come to mind, work on a variety of developments and have a very organized project management process.
Thank you for responding to my question.
I appreciate your insight about Hines and Carmel Partners. From my informational interviews, I've learned that institutional developers often silo teams, splitting them into acquisitions and development management. This can limit exposure to the full project cycle. In contrast, boutique developers tend to offer more holistic involvement across all stages of development, which aligns better with my career goals.
What are your thoughts from your experience?
They do, but that's not a good enough reason to not go that route. Your family wants you to get legitimate training and experience before coming back to the family business. You can learn all you need about the boutique world from your dad or whomever. You need to learn how the big boys do it.
Hate to say it, but if your family has a development business, then that's where you're going to get the best experience. Working at a big developer won't give you the same experience you'll need to run a smaller family shop. Even working at a smaller firm where you don't get siloed isn't going to be super helpful, because you won't actually get any experience in running a business.
This isn't always obvious, but running an actual company is a different skill set than managing a development project, even if the firm is a real estate developer. It may not do you all that much good to be an A+ developer if you don't have the ability to manage the overall firm.
Thank you for your insights.
I understand your point about gaining experience in a family development business being the best way to learn how to run a smaller shop. My family has asked me to gain experience before joining their development business. Would you say a boutique firm would then provide better exposure than an institutional developer?
Early in my career, my analyst bullpen was 50% real estate family kids like you.
I worked at a few other RE companies afterwards, and never seen the same concentration of RE family kids. I thus believe this was deliberate strategy at the time (or the employer or office liked hiring this profile). I believe this was the kids and family strategy. I’ll discuss what happened to them years after.
As you mentioned:
- this is a long term process
- you want to hone development AND growth skills
My first real estate job post-college was working for a large real estate investment company that invested on behalf of pension funds. I was not from a RE family, but I had a long term admiration for RE from growing up in Hawaii and I wanted to eventually go back and influence the future of the state. I also found out that’s where the money was back home.
I say that because what I’ve observed is having a long term vision for yourself, even if it never happens and you pivot, it’s important for you keeping your focus and drive. As Seth Godin says, be a “meaningful specific” rather than a “wandering generality.”
If you want to satisfy the development AND growth, I think you should work for The Money (aka the Capital).
Go work for an investor that
1) does a lot of deals,
2) invests in multiple asset types (residential, retail, office, industrial, hospitality, senior living, self storage, covered land plays, long term master plan developments, etc),
3) invests in a wide geographical area, both urban, suburban, greenfield development, infill development
and I’ll add a new point, that I’ve never mentioned here
4) invests with multiple JV partner sponsors. Yes, you want to know how other companies (many of them family companies) got to the level where they can obtain big boy equity capital. Also, how they might drop the ball (ie Asian mafia debt and drugs). But also invests in wholly owned investments (no JV partner).
Where are they now?
Almost all have gone back and took over their family companies, or created their own with seed money from the family. Apartment developer, mortgage brokerage, real estate brokerage, holding companies (build and hold CRE).
I think the experience of the future developer at the fund was really maximizing the experience. In addition the four points above, my colleague got experience with a lot of negotiation of JV agreements and approval of other legal agreements including construction loans, GMAX contracts, purchase and sale agreements.
If you never later become a development manager at a development company (other than your family’s), then this type of experience is important to get at the fund. You can learn the development blocking and tackling at your family’s company and learn from the senior folks there.
Eventually you’ll unsurprisingly rise up the ranks and eventually run the show.
Work for the big boy capital and bring something new to the table. Work for several years there and then go back to the family company and be a student again. Then, show you can lead and have good judgement.
The growth part is important and a wildcard. That’s why getting a sense of “relative comparison” is important to then have the conviction to enter different asset classes later.
Now for you monkeys who don’t come from RE families, the lesson learned from this is Focus. Have a long term vision for yourself.
Thank you very much for sharing your experience and insights.
I appreciate the advice on having a long-term vision and focusing on both development and growth skills. Your points about working for an investor that does a lot of deals, invests in multiple asset types, geographical areas, and with various JV partners are particularly valuable.
I've networked with heads of institutional developers and boutique HNW developers responsible for notable projects in Sydney, Australia, but none are hiring at the moment. How would you suggest I maintain these relationships and ensure mentorship remains valuable?
Regarding working for "The Money," are there specific roles or titles I should aim for to maximize my learning and growth before transitioning back to my family's business? Are there particular types of projects or asset classes that are most beneficial to gain experience in?
Lastly, what key strategies have you seen in successful family businesses that I should consider adopting?
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