Would you consider the development skill set more niche compared to other RE jobs?
Hi, I currently work as a Development analyst (first year). I really love my job, and see myself doing development as a career. That being said whenever I talk to my friends in acq or asset management I can’t help but notice how different our day to days are. For example, on any day I’ll be preparing a development budget, working w designers/GCs, writing up change orders, preparing investment memos, or going on site for whatever reason. Whereas my friends in other jobs are underwriting and building models (honestly not sure what else they do).
Do you think development is a more specific skill set than other jobs in the industry? Are the skills transferable, if I did want to go into REPE?
To be completely honest I know very little about things like CMBS which my friends in asset management seem to spend most of their time on.
Is this in any way a disadvantage? I’m curious what other people’s thoughts on this are.
IMO it isn't. Underwriting acquisitions skills translate into other jobs that require financial modeling, asset management is asset management whether the asset is real estate or something else, and development, at the end of the day, is project management. If you manage projects in any career, you use the same general skillsets a developer does - delivering a product on time, at budget, and wearing as many different hats as it takes to get it done.
The granular skills - what a cap rate is, what a property should spend on turnover per unit, how to get architects and contractors to communicate - won't directly translate, but the general skills are universal.
It all comes down to what you want to do with yourself. If you want to be a developer, then it doesn't really matter if your friends are getting experience more explicitly applicable to acquisitions, because that's not what you're doing. If you don't want to be a developer, go do something more directly applicable to what you want to be doing.
I agree with CRE. I will add that the project management aspect of balancing multiple cross-sectional teams also has a lot of marketability.
Nothing wrong with being a development analyst or associate. A good development rep can go a long way if they understand how to negotiate agreements, manage construction process, value engineer, etc.
Essentially it’s a project management job where you will be in charge of schedules and will have to answer on why everything is late and overbudget. To be clear, it’s your fault when this occurs.
“How did you miss this in the budget? How are we 60 days behind schedule?”. It’s great until it’s not.
…To answer your question though it’s a very general skillset, whereas acquisitions is a more technical, specific skillset.
It’s usually the person who understands the numbers that’s the most dangerous person in the room.
+1 Why the most dangerous?
I don't think this how he meant it, but the person who understands the numbers is often the most dangerous person in the room because they don't understand how to make those numbers on a pro forma a reality, and have no idea of how to go about executing a real estate deal. They're dangerous because they live in a make believe world, where changing an assumption makes a deal better or worse, without knowing a darn thing about how to get collections from 95% to 96%, or what it costs, and why.
Real estate is not an industry in which the digits to the right of the decimal point matter. And that's a really hard thing for finance-oriented people to understand, because so much focus in business school and Wall Street goes into the exacting granular detail of Excel models and underwritings. That shit is meaningless in real estate. If a deal doesn't make sense on the back of an envelope, it won't make sense in ARGUS either, and visa versa - what is important is understanding the risk and understanding the hurdles to executing on a business plan, and in my experience many acquisitions people, especially at big shops or at LPs, don't understand either.
Sorry, posted the original comment in the middle of the workday. My comment regarding the "numbers" was in response to OP mentioning that he/she wasn't familiar with CMBS, so it was my very shorthand way of saying that while it's technically not the development manager/associate/director's responsibility to be familiar with the numbers of the deal (outside of the budget or proforma), or the capital stack of the deal, or the business plan of the deal....the best development managers are familiar and comfortable with each of these aspects of the deal and it would be a great advantage to their career to have an understanding of the levers involved.
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Agreed with the other poster. You can't just sneak that last line in at the end. Why is the numbers guy the most dangerous?
Most inconspicuous acquisitions employee
What do you mean by “nothing wrong being a development analyst or associate”..OP never said there was. Also by the looks of it you work in development too.
…To answer your question though it’s a very general skillset, whereas acquisitions is a more technical, specific skillset.
I could not disagree more. There is no more technical skillet in all of RE than dev.
Wanna elaborate? Curious
Development is a specific skill-set but there's still overlap with acquisition and asset management. Development has the most overlap with asset management with the difference being your managing an asset that is not yet income producing, you're readying it for that.
the person who "knows the numbers" is losing more of their value each day with the onset of AI. knowing how to manage people, having understanding of construction and timelines, being a QB for many different professionals to execute on a project, understanding the financing, entitlement process, zoning and design and problem solving puts you in a much better position in the future and cant be automated. who cares how good you are at excel.
Also, I think it depends what development shop you work at. The current shop I’m at provides a mixed bag of all different perspectives (AM + Dev + Acq). Thankfully, my current situation we are in charge of underwriting the project which, provides a little bit of insight into an acquisitions role. Our development team will also take the intensive value add deals along with the ground up projects. Also, we see the project through all the way until it reaches stabilization. This provides valuable insight into asset management. Perhaps the most valuable portion which is the lease up. Curious to see how other shops typically are, but I like it because I get a more rounded skill set.
Quite the opposite, development is a more generalist skill set than any other job in the industry. Developers need to know a little bit about every single other job; silver at all trades, gold at none.
The skills are absolutely transferable, though obviously someone with REPE experience will have a leg up on you, coming from a development shop. If you love what you do, don't get too caught up in a "grass is greener" mentality, just focus on being the best at what you are doing and you'll be fine.
And for the record, in my opinion at least, development will stay fresh and interesting for you long after your friends in acquisitions are bored of underwriting their three hundredth model of the year. You touch more aspects of each deal, each deal will be more unique, each deal will teach you something, in a way that just won't be true of acquisitions. As you note, acquisitions folks end up doing a relatively small amount of work for a huge number of deals that don't pan out - most of their time will be spent looking at the same-looking audited financials and updating the same rate tables, and it gets real boring real quick
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