Best way to start a Development Shop? Leasing, IS, Capital Markets, or Development Analyst?
Hi everyone so, my dream is to start my own development shop in 10ish years. I've had an internship for Investment Sales brokerage and really loved it, however I would love to best figure out how to go into development, and then be able to leave and have enough connections, capital, and knowledge to crush it in my own shop 10 or so years down the line.
I've heard its best to work for a very large and respected bank, broker, or developer, however, I don't think I can work at a respected/large development shop out of college without an MBA.
Any thoughts on best next steps to be put in a position to successfully start a development firm? Is it worth working at a small development shop, or should I try to crush it on the brokerage or capital markets side, and then move to a Hines/Greystar/etc and learn there for a few years?
Any and all advice is appreciated!
Interested as well
Dude there’s like 1000 topics in this. Use the search bar.
Whatever position lets you maximize your ability to meet people, negotiate, and be a dealmaker. If you are really going to start your own firm, being able to raise capital and find deals are the critical success paths. That how you should think about this.
Frankly, people who have successfully started their own devco (or risen to top ranks at existing shop) have started at all the places you mention.
Like I often say on WSO... The best job is the one you get offered
I'm heavily considering a medium/large, quickly growing office leasing brokerage that also has a private equity and development arm, as well as property management team.
I love the sales side so I'm thinking of starting out in leasing and hopefully do really well, while consistently grabbing lunches and drinks with people on the development side, and then hopefully transition to the development side in 5ish years or so.
If I do well as a leasing agent, I'll have a ton in savings which should help me out when starting a shop, or at least that's my thinking.
My main concern with this path is that I'll be entering the market in June of this year as a office leasing analyst, and I feel like with all of the covid stuff happening, a lot of companies aren't looking for new offices. So I'm also considering getting a masters of finance to postpone getting out into the market while it's heading downwards.
Do y'all think this is a good path? My other option is that I have some interviews lined up for a multifamily development analyst with Greystar. I know I love the sales side but I feel like if I'm hoping to go into development, if I get an offer from them I probably should take that over a leasing role?
A lot to unpack here...
Going from office leasing to development is probably not the "easiest" path, but does happen for sure. You will likely be viewed/hired as the "leasing person" but still very much on the development team (a few people at my firm joined as such) if teams are organized to be interdisciplinary. Smaller the firm, more likely and common.
Generally IS or land brokerage is the more desired path to development, as opposed to landlord/tenant rep, but plenty do jump from that side.
If you do get an offer for a true development job, and you really really want to work in development, then you should take it. I mean why "two-hop" when you can go direct?
But, if you really like sales and want to do that, and clearly you do.... Then going the brokerage route may be ideal, just know you need to approach it from a highly committed viewpoint if you want to be successful. five years is a fine time horizon, hopefully any moves will come naturally.
The grad school thing gets debated plenty, so I'm not going to say much. If you have no job offer, grad school is not worst idea. If you can start now, I don't see it as a negative even if it is "slower". Really hard to predict where office markets will be in 12, 24, and 36 months. There is a good chance that 2023 will be a big year once all this is over, maybe even 2022. Even in down markets, brokers make fees on renewals and sublets, and frankly I think entering in bad times is great for learning (I had a major positive shift as a result of the 08 GFC), and a lot of friends who started in 08-10 are now mega successful and they are not stressing this period as bad as those who started in 2015 onward.
Long story, simple answer, take the best job offer you get (with grad school as fallback plan)
There are so many ways to being a developer. People have become developers after taking all the paths you listed above, it really isn’t as straightforward as it would seem, it’s a journey. As more experienced users here will tell you, make connections, learn the business and start taking practical steps that will pay off down the line.
Actually started a thread like this, look it up - the one guy gave a very detailed response that answers your questions.
I’m that guy, OP here is the thread: https://www.wallstreetoasis.com/forums/running-your-own-shop
As everyone has weighed in, the path to development is often unconventional and is not super defined. In terms of the best path or place to start one clarification worth pointing out is to consider what product type you are specializing in. If you are interested in office, retail or industrial development then a high volume brand name brokerage firm makes more sense as tenant relationships drive a lot of the value of a development.
That being said, the best starting place to learn how to run a development shop is in development. A large versus small firm comes with trade offs (which are well documented on this site) but I wouldn’t count yourself out on landing an analyst position without an MBA. It is certainly competitive (mainly because there aren’t many spots) but there are firms that will recruit directly out of undergrad.
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Okay thank you for that distinction. If that is the case a position at a high volume brokerage shop is still a great place to start but not as valuable if you wanted to go into the other product types.
Pretty much everyone starts as either an analyst or associate depending on your previous experience seniority.
Keep in mind acquisitions are just one element of development. One thing to consider is if you enjoy the process of development or just the acquisitions element. Filling your pipeline is really important to any shop but ultimately development is about execution so if you only like the buying process you’d need to partner with someone with heavy operations experience (likely with heavy background in the design, entitlement or construction phase).
IS to development associate is your best bet to learning the ropes in development within 10 years. Large shop, small shop, it doesn’t matter much in my opinion, just get yourself a job in the industry and you’re on your way. Development is not rocket science, there are just thousands of aspects to the job that you need to know.
No offense but unless you have at least $10mm in net worth and $1mm liquidity it will be very difficult to start a shop on your own. The knowledge is the easy part. Finding the balance sheet to sign the guarantee so the bank will lend to you is the hard part. Best advice is to find a rich partner who doesn’t want to do the leg work but will sign the docs. That or start in LIHTC
LIHTC is a pretty good way to get started, not very sexy but effective. If I'm not mistaken, there's this really famous firm most on this forum would have a hard on for, that got their start in LIHTC.
Not sure about the 10mm in net worth part, plenty of people, some of them are on this site, that have started with much less.
Whichever makes money. Highly recommend barging into development with no development exp but a good bit of personal cash and a few accomplishments on the CV. And I'm not kidding
Would you consider converting a single family into a multifamily (2-4 units) development? Because that's basically what I'm dealing with now on a personal deal.
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