Switching from AM to Development

CRE Mamba

How active is your firm’s development group at the moment? What is their source of capital to do projects? Also what markets and product type are they in? Asking because the question you’re asking (which is a good one) has a different set of considerations that come with it today, than it would have a few years ago. Considerations today probably should focus on job protection and the group’s ability to withstand current market challenges; whereas a few years ago the focus would’ve been more on upside potential, ability to get opportunity and experience, etc. Point being- it’s not easy right now for a lot of developers. Consequently, there’s a bit of risk to being in development right now.

If I were you I’d be careful and thoroughly vet the health of your firm’s development operations at the moment. Managing a healthy asset portfolio at a decent company seems like a safer space to be than on a development team at the moment (of course, it depends on your development team’s location, source of capital, product type, etc.)

I know a few development folks who are not in their favorite role/company, but they are intentionally staying put for the foreseeable future because they know how risky it is right now to be working for a number of other developers.

I know several who have had to let people go, or who have a hiring ban for the next 9-12 months.

At the end of the day, if the group has strong operations, plenty of cash, capitalized deals, sounds like a great opportunity to go for development. But if you aren’t getting that clear of a signal (that it’s got plenty of cash, healthy situation), I’d stay in AM for a few months.

Also if you are going to take a pay cut at some point to make the move to development one way or another, then I wouldn’t let it stop you from proceeding with current promotions in AM today. Especially if you have better job security doing AM. Maybe you can save money doing that while you ride out the storm before making the move to development.

+1. What product types/areas and geographical locales in development do you think are healthiest right and most resistant to the types of risks that you have been seeing in the market and hearing about from your network?

The development team has enough folks given there are only so many deals to proceed with but I’m thinking maybe I can show an interest and help with some of the front end idea underwriting stuff in addition to my AM work. We already work with them pre IC and give our thoughts on their ideas — so I’m not in a silo over in AM. I’m curious about development and see myself over there long term but it’s not like I dislike AM as a learning space. I want to understand the whole business and do both. Ideally staying put with this firm because it’s an awesome place.