Development questions

Im getting a bachelors in RE development the coming june but I havent networked much and dont have any work experience in the RE sector so I would appreciate if u guys could clear up a few things for me. As I understand it a developer (as in, the employee and not the company itself) works mostly as a project manager plus taking on risks, finding investors, providing different involved parties with necessary info, bidding, probably some initial financial modeling as well as providing basic knowledge in laws(not the details and drafting ofc), geology, construction so u can make rough estimations and bring in experts and consultants when you have narrowed it down to one project (or a couple maybe?). Correct me if Im wrong or missing something.

I have a few questions

  1. What does the career ladder look like in development, what are the steps from entry level development analyst I believe to whatever is the highest. What are the different tasks for these positions and how fast do you climb?

  2. What other roles in real estate or in general can you branch out to from working in development. Basically, any common exit ops?

  3. Do you specialize in a certain property type in a certain area or can you easily work with residential, offices, casinos ;), etc and most importantly how easy is it to go over to another country and work for a developer there?

  4. How much is your job as a developer affected by economic cycles, compared to other roles in real estate?

  5. If there is anything else you think someone in my position should know feel free to let me know, every bit of advice and knowledge is deeply appreciated!

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Comments (11)

Most Helpful
Nov 16, 2021 - 11:38am

1. Typically - Development Analyst, Development Associate, Development Manager, VP/Director of Development, Managing Director or Partner.

2. Development IS an exit op in itself, typically if you want to do development you stay there. You could switch to most other areas of real estate if you don't like it, development is very comprehensive. Acquisitions might be tough depending on how finance-focused the dev role you work in is.

3. Development is almost always specific to a property type because you need to have such a broad base of knowledge. Over the course of your career you might become exposed to more asset classes, but I'd say development is the most specialized area of real estate in terms of the property types you work on.

4. Development is the highest risk type of investment and a million things can blow up a project, so arguably it is most affected by economic cycles. That being said, the specific cause of a downturn may have a greater impact on other areas of real estate.

Nov 16, 2021 - 11:38am

Developer_Daddy

Im getting a bachelors in RE development the coming june but I havent networked much and dont have any work experience in the RE sector so I would appreciate if u guys could clear up a few things for me. As I understand it a developer (as in, the employee and not the company itself) works mostly as a project manager plus taking on risks, finding investors, providing different involved parties with necessary info, bidding, probably some initial financial modeling as well as providing basic knowledge in laws(not the details and drafting ofc), geology, construction so u can make rough estimations and bring in experts and consultants when you have narrowed it down to one project (or a couple maybe?). Correct me if Im wrong or missing something.

Actually not a bad summary!  Silver at all trades, gold at none.

  1. What does the career ladder look like in development, what are the steps from entry level development analyst I believe to whatever is the highest. What are the different tasks for these positions and how fast do you climb?

With the obvious caveat that it depends on the firm and the role, I'd argue that as you prove you can take on more responsibility, you get promoted.  Your first deal is going to be a lot of hand holding - after all, you don't know internal processes or local regulations.  The key is showing you understand how all the pieces of the process fit together.  Then you get to do it on your own, and if you manage it without major screw ups, keep climbing.  Theoretically a Director of Development role is the highest you can go working for someone else, which I would argue does less of the day to day project management and more relationship building and problem solving for junior folks.

Obviously the goal is to source deals and open your own shop.

  1. What other roles in real estate or in general can you branch out to from working in development. Basically, any common exit ops?

I think development touches enough other facets of real estate that you can go anywhere that doesn't require a technical degree/certification (architect, engineer, lawyer, etc) pretty easily.  It really depends on what you want - I think most people would say that development is the exit opportunity.  If you want to be in acquisitions, I'd argue it's better to start out in a more underwriting/analysis heavy role.  Or start in brokerage if you want to be a broker.  Etc.

  1. Do you specialize in a certain property type in a certain area or can you easily work with residential, offices, casinos ;), etc and most importantly how easy is it to go over to another country and work for a developer there?

Development tends to be both asset and geography dependent.  As in, there is a lot of value to specializing in MF in Atlanta that isn't necessarily transferrable to doing MF in Los Angeles.  On the other hand, a huge part of development is being organized and proactive, and understanding where bottlenecks and issues are going to crop up, and managing accordingly.  A lot of that base skillset is transferrable.  It's just a question of local laws and regulations, which vary between municipalities and between asset/zoning classes.

  1. How much is your job as a developer affected by economic cycles, compared to other roles in real estate?

Depends on what you're building.  People who specialize in suburban strip malls might be feeling some pain right now.  People who specialize in converting them to other uses probably aren't.  But more generally, your average development deal (again, size depending) is going to take between 2-4 years to entitle, build, lease up, and convert.  That confers some job safety right off the bat, because losing your project manager means losing years of accumulated knowledge and expertise on a given deal.  And because it's all long term, you're likely to be working on a couple things at any given time, that have 12+ months left to run on them.

Nov 16, 2021 - 12:33pm

If you are graduating this school year and haven't networked much.... join the closest ULI and NAIOP chapters you can find (or those in your target city for work)... you will learn much of this quickly if you talk to people, attend meetings/events, and are proactive in seeking out the knowledge. Join now as the rates will jump up a ton once you graduate!!!

Nov 16, 2021 - 8:10pm

There is a discount on many groups and courses that I wish I utilized more when I was in school. I graduated with a degree in RE as well and during my senior year I would drive around my city and pick out buildings that had recently been delivered or were under construction that I thought were cool. Then I would find the ones being built by a local group and then just DM the development managers and sometimes the principals themselves on linkedin to get an informational interview. Ended up talking to a ton of people, made some positive connections, and got a job through those calls. 

  • Analyst 1 in RE - Comm
Nov 18, 2021 - 2:54am

At a developer as an associate now:

1) From what I've seen there are two ways you can get into a developer early on, either in acquisitions or development. On the acquisitions side you could start out as an analyst, this would include a lot of modeling, probably market research when you decide to move forward with a deal, due diligence like what you can actually build with certain zoning in certain areas of a city. The other is more on the project/deal side and not as much modeling. What I currently do is help with initial DD (look up tax comps, zoning analysis, help put together packages for zoning board meetings).

2) Like others have said this is usually an end goal, it's usually very hard to break in out of undergrad. Common paths are from brokerage and you do that for 1-2 years then switch.

3) Depends on what the developer you work for focuses on, they could just build residential condos and others could do resi, office, mixed use, hotel, etc.

4) Very cycle dependent, but I don't think there are massive layoffs unless the developer bets big and it goes terribly wrong (look up HFZ in New York).

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Nov 18, 2021 - 9:31pm

4) Very cycle dependent, but I don't think there are massive layoffs unless the developer bets big and it goes terribly wrong (look up HFZ in New York).

I think you'd be surprised how many places are like this.  A lot of the big names in NYC development for the last ten years (read: condo builders) are way overleveraged and are reliant on doing a small number of hugely expensive deals to feed their teams.  Which means they continually make bigger and bigger bets, regardless of macro conditions, because they have to churn in order to generate that revenue.  Which means they're always one bust away from it all collapsing.  And mind you, that mindset drives some shady behavior, as we saw with HFZ; once you understand that it's all a house of cards, what's the difference if your stiffing your investors or employees?

  • Analyst 1 in RE - Comm
Nov 22, 2021 - 1:40am

I agree, saw an article with Extell building their newest billion dollar tower on 57th Street that they had like $30-40mm in cash reserves at one point (I think from Wikipedia). That seemed insane to me given the carrying costs involved. An example of highly overleveraged and they're a huge name in the city, not sure if they could get additional loans to plug their carrying costs if they needed to but just seemed insane to me the amount of money they had on hand for the project.

Nov 23, 2021 - 11:23am

Grain of salt as I've only been active for a short period of time:

  1. What does the career ladder look like in development, what are the steps from entry-level development analyst I believe to whatever is the highest. What are the different tasks for these positions and how fast do you climb?

    1. Very firm dependent (also titles are very malleable) smaller the shop generally the quicker you can move up to a point where you are running your own deals. In terms of tasks, it can be pretty broad depending on firm need and depending on, once again, how large the firm is regarding the development staff. Land acquisition, financial modeling, entitlement work, meeting with engineers, meeting with architects, meeting with contractors, etc. there's no typical day.

  2. What other roles in real estate or in general can you branch out to from working in development. Basically, any common exit ops?

    1. Dev usually is considered to be an exit op with most people having their holy grail being running their own shop. Realistically you could exit to most positions with the caveat that it depends on your product type and scope of duties at your firm.

  3. Do you specialize in a certain property type in a certain area or can you easily work with residential, offices, casinos ;), etc and most importantly how easy is it to go over to another country and work for a developer there?

    1. Generally, development is pretty regional (hence why there is no "ranking" of developers excluding some of the larger ones) and you will normally focus on a specific product type because you want to be able to develop a skillset and knowledge base for that industry. I can't really speak to transferring between countries but it seems like it would be more of a hurdle to overcome as you'll have to get acquainted with differing restrictions politically, financially, etc.

  4. How much is your job as a developer affected by economic cycles, compared to other roles in real estate?

    1. Can't speak to this as I'm still early in my position but since the question is fairly broad I'll take a stab at it. Realistically it depends on product type but due to the fact development generally garners a higher appetite for risk, there is a higher potential to be negatively affected during economic cycles, but, in conjunction, a higher potential for return long term.

  5. If there is anything else you think someone in my position should know feel free to let me know, every bit of advice and knowledge is deeply appreciated!

    1. Just be willing to learn as much as possible as it will take time to fully understand the process until you have seen one of your devs go full cycle (i.e. land under contract ---> closing). Also don't comp chase because you'll have to get some experience under your belt before being fully valuable to a dev firm.

In terms of recruitment, it's best to just network a lot (common advice but it is true). Job postings for development jobs are far and few between (the market is pretty hot right now for experienced hires but not to the point where you can just blind apply) so having some kind of in is necessary to move forward.

Feel free to PM me as I'm around the same point in my career as I assume you are. 

You're not really a born and bred, traditional aristocrat if you work hard enough to get into Harvard.- Prospie

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Nov 23, 2021 - 12:13pm

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