Transitioning to Development at VP/Director level
Hi, I will be a Director/VP in REPE in a year or so, and that's when I think I want to get the f out. a) because I think securing the VP title is important as a career milestone and b) I do think development itself is going to be very slow over that time so don't see the point in trying to switch now.
I know I will be facing a conundrum though in that I will be very unqualified in terms of the "building a building" part of the job for a mid-level guy. I thankfully work at a very hands on firm and know more than most pure finance guys about negotiating contracts and de-risking projects from a physical perspective in DD (basically solely been a development investor since I've been in the industry). But definitely not particularly savvy in reviewing plans and knowing how to manage the design process and later construction process. Furthermore, I don't feel like once I've made VP I'd be willing to be a Development Associate as I'm pretty sure I would be taking a comp cut just lateraling from REPE Director to Dev VP - Associate would make this pain much worse.
So any advice is appreciated to stay in mid-level title, and thoughts on how I can pull off this transition at a high caliber shop as I'm at a decently well respected one for REPE now.
The fact you've been at a primarily development-focused REPE shop is helpful for sure, but I don't see any way you move from VP/Director in an acquisitions/investing role to the same level in a full cycle development role. It's just not feasible.
You have two options in my eyes:
1. Transition to an acquisitions role at a development shop to get your foot in the door. A lot of these places let acquisitions guys get hands on with projects they source and stay involved throughout the process (although you won't be running the entitlements process or directly coordinating consultants/design).
2. Take a title hit.
Associate level is the ideal time to switch in my mind, you're still junior enough that having knowledge gaps is viewed as something to be trained vs. ruling you out because they could get someone more suited to the role at a more senior level.
As a bump to this- does anyone have any good resources/reading materials to learn about the gritty aspects of development? I’m talking like a genuine in depth perspective on entitlements, avoiding cost overruns, high level cost estimating, etc? If it’s valuable to help answer this question/provide help, I’m looking to do a personal development/heavy value add deal in the next year or two (I have one YOE doing affordable development/heavy finance structuring). I’ve been lucky enough to have shot the shit well enough with some better off family/friends/acquaintances and raised a few hundred grand in equity for something like this as. Now just gotta walk it…
ULI has a real estate development textbook that’s probably the best out there.
I've been meaning to get one of these for new juniors as a reference book. Do you know which of the ULI textbooks is better (the Peiser/Hamilton one or Miles/Netherton/Schmitz)?
Seems like there isn't a bias towards one or the other across the well known RE undergrad/masters programs. The table of contents for the Miles text sounds like it covers general principles more in depth while the Peiser one covers a lot of things high level, but without getting hands on its hard to know...
On the entitlements side, one thing you could do is just attend or watch a lot of public hearings. They're often recorded and posted online now. Pick some development projects of the type you want to learn about, and go onto the municipality's website or YouTube channel and watch the public hearings for those projects. Bigger ones usually stretch out over a number of sessions. Often all of the plans and other documents submitted for the entitlements are posted online, or, if they're not, they're still public record and the permitting body would give them to you if you contacted them.
I know folks at places like Tishman/TC and folks at smaller dev shops. There's a big difference. Let's use Hudson Pacific as an example - there you aren't as responsible for originating developments but let's pretend you are. You would find a deal you wanted to develop or rehab for whatever reason (tenant in tow, inv. thesis, whatever), You'd do a quick cursory UW to see if it's worth spending time on it, consult with a massive in-house construction department, maybe in-house architecture department, figure out what you could build & the costs, then go and pursue the deal just like you would at a REPE shop. So as you can see it's not all that different. Just way more in depth but the knowledge base is very similar.
An independent developer you would find some land or building, read through pages of city code and do some rough CAD work on Google Maps, call a few GCs and subs to get costs, figure out the costs yourself and hope you're right, then go and beg for equity (not for the past few years but probably now you have to beg for equity), and do virtually everything yourself with 3rd parties. Way steeper learning curve and different knowledge base.
So anyways, going to a big boy shop for a development role shouldn't be all that different from what you're doing now you should transition just fine. There are tweeners of course but I'd either go institutional or entrepreneurial, never really understood the middle ground.
What's a middle ground firm in general or in the NY market? I'm currently in a Masters program with 3 years of experience. Less than one of those in development and currently in an acquisitions role but also seeing the development side and engagement with 3rd parties.
I'm confused on where to go since the past firms for me are not a Tishman level firm, hoping for an opportunity at one of those but working for more entrepreneurial shops.
So, I can think of two people I know fairly well who went from investment mngt into development, and one was able to "lateral" (basically same general rank/title/seniority) and one who came in at associate (tbh, not sure if they had been promoted yet or not, but would have been close and def saw the dev assoc. as a backslide in title/rank)... So I guess either outcome is possible.
I'd think your best option of moving to development at equal rank is going to a shop that will value your skills/experience, and most importantly... you can sell that you have the wherewithal to perform at the VP/Director level. Meaning, you can run a team, execute deals, drive profits/revenues, advance capital raising, etc.... Thus, the biggest issue I see is your timing, like getting promoted then immediately bouncing.... that won't make the level sell easier (clearly, not impossible, but just think about it).
The real key is making this move via direct personal connection... i.e. the devco and the particular team must want you, see you as right person/leader, and be ready to take you on as such. General applications to places that don't know you may never give you chance to explain yourself, but a place you are "known" could work well. Does your firm co-invest in developments?? If so, try and network into one of those shops, or ones that have same scale/scope. That seems easiest move.
I think you could make the switch via networking. However, you need to be targeted in your search. Development firms have multiple staffing models. You may have a team where the same people are the project managers on both the construction side and business side. There are other developers where there is the construction project management team and the business side management team. The business side will deal with overseeing financing, design, dealing with the city, JV partners, etc. the construction team will just focus on construction, permitting, etc. you’ll be a good candidate to come in on the business side because your construction team will handle that side of the business, you just need to know enough to call BS and solve problems as the business team oversees the entire project and is the one making the final call on design, revenue, spending, etc.
From what I've seen you only need to be good at one aspect of development to get the job, then a good shop will provide support and help you learn the rest. If you're able to source new sites or get deals funded someone will give you a home.
True, but possibly somewhat less true at the level of VP or Director. At that level, you're typically running deals, not requiring support and being helped to learn things.
I made a similar switch a little while back and for the most part, it's been great. I think your instincts about wanting to hit VP and now being a slow time for development are both accurate. I probably didn't time my jump perfectly, but from a life perspective it worked.
I think whether it's feasible comes down to your market and your timing. It might take a little bit longer to find the right fit b/c you do need to find someone that is willing to punt on 12-18 months of salary before you're really producing. That said, you can add a lot of value to a smaller development shop, even while you're learning the nuts and bolts.
Feel free to DM me if you want to talk on the phone ever.
Why do you want to switch from REPE to development?
I have the same question. Having worked as a RE development manager for 2.5 years, I think I can help answer a lot of questions on the roles, responsibilities, processes of managing deal sourcing, due diligence, deal structuring, designing, budgeting, contract negotiation, closing, construction management, managing consultants, dealing with change orders and requisitions etc. However I’m thinking about a reverse career shift to the investment side, as I’ve hearing the comp on REPE/fund/asset management is more lucrative. Even thinking about more hardcore investment/trading careers such as algorithm trading and quantitative investment. Just comparing the comp/salary at VP level, which role would stand out? Happy to discuss or answer anything on DMs/phone calls. But great post, which helps me to give a second thought on my career shift.
I went from Manager, Acquistions/Asset Management at a REIT to Director, Development at a boutique REPE. You will have a learning curve, especially if your not use to managing civil/architect/land use. That being said, best career choice I have made to date.
Hi there, what were you day-to-day responsibilities like when working the Acq/AM gig? Happy to DM you if that's easier.
In a similar position - currently AM at a large developer with a sizeable portfolio, looking at VP in the next year or so. Looking to make the move to development likely following that promotion, ideally in-house but who knows how things shape up, especially in this environment. My biggest concern is that I feel like I "wouldn't know anything" - re: the project management aspects of development, managing entitlements, etc.
Acq - Underwriting stabilized, ground up opportunities. Sat w/ development and would put the deal together from capital stack, JV, REAs, etc. Worked on dispos, easier part of the job.
AM - Mainly sat w/ development and did our underwriting for dev/redev (but never managed the entitlement process), portfolio management, condemnations, etc. Note I worked on top 25 MSA, east coast. 5 years of experience before I moved to development.
New Role - doesn’t move as fast but much more strategic thinking through deals, financing, entitlements, politics, construction. Still got a TON to learn - I would say your learning curve is ~6 months to figure out what the hell your doing and then 1-2 years before your comfortable. If you are good at project management, you will be fine. Align yourself with a mentor if you can.
Having made the transition from acquisitions to development, the hardest part I found was actually learning project management skills, how to keep people on task, and focused.
In acquisitions, you had 60 days, very defined deadlines, and very structured process. So everyone you were working with was moving fast and it made project managing the deal process much easier. You knew much sooner if you were going to miss a deadline. Managing people / consultants to a deadline 1+ year out and making sure they keep focused on your project, hit their deadlines, and everyone is aware of the process to reach the end goal, I found to be the hardest part of development to “learn.”
Any tips for managing people?
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