Construction Management?

I'm thinking on taking a couple CM courses or even getting a certificate in it as I really want to learn more about the industry as I am currently in a Construction type environment at my current RE firm. Also, I feel it can be incredibly useful for investing in small multifamily on my own.

Do you think this would hold any weight if I want to go into development?

 

Literally started talking about this last week. I currently do MF investments on the principle side but my end goal is to have my own portfolio of apartments buildings/small MF developments. I know nothing about construction but found a couple of construction management courses at my local universities. I would suggest starting there.

 
Best Response

Here is my two cents. I graduated college with a degree in Construction Engineering Management, had one summer internship, and over 4 years of experience with a large general contractor as a project manager, prior to getting into development. Now this experience has helped me vastly, not only in general construction knowledge, but general management, organizational and professional skills. My 4 years of doing an undergrad in CM, I can still say I was not prepared for my entry level position. My summer internship I learned more about the industry than my whole undergrad, and that did a better job of preparing me than school.

I have a feeling that the courses you would take are not hands on enough to really gain a lot from them, and if it's your own money I would be weary. Construction Management really boils down to leveraging the professionals (either the general contractor or sub contractors) to give you the information and expertise you need to be successful on a project. Also knowing what are the motivations for each contractor and what their motivations are. Building strong relationships with general contractors or subcontractors, where you can call them without any commitments to them, will get you pretty far. Of course, you will eventually need to throw them a bone or have them on a retainer or pre-construction contract for them to keep giving you good information.

With all that being said, I think you could self teach yourself on the internet a lot of what you are looking for information wise. And there are many aspects of construction so it depends what you want to learn. Is it about estimating, or building materials and methods, scheduling, working in the field or a plethora of other aspects of construction.

You guys can PM me if you want more information from me.

 

I agree hands on experience is probably the best (can be said about most areas in RE) however I have a business degree so it would tough to break into any construction focused position as I don't have a technical background which why I was looking at course/certificate. I didn't mention an MS because I'd like to keep away from that for now until I 100% know what I want. I am around PMs all day so I can try to get out to a project site at some point.

I would like to learn more about the project management phases, pre Construction to close out, awarding bids and mostly the overall project budgeting. I am getting more interesting in the field and for future maybe becoming a PM as it seems interesting. A lot of the guys in my office are probably 50/50 in office vs job site which I would like. A couple guys I've networked with also mentioned having a good understanding of CM is underrated in regards to owning a portfolio and depending on firm you work at.

 

I agree having a good understanding of CM is a huge plus for having your own portfolio (especially if you're developing new or ground up), or if you are looking at partners, having a partner with a strong construction background would help out quite a bit. The areas you are looking for better understanding in, I can't imagine the classes would dive deep enough for you to really be able to do it on the job.

It sounds like you work for a firm that does their own contracting? To get more experience on awarding bids I would recommend trying to have a PM include you on their bid team. You could take a certain scope that is pretty simple and bid it out then analyze the bids when you get them back. Any PM should be able to help you learn that. It'll also teach you what questions you need to be asking your bidders to avoid scope gaps. Usually there is a reason some one is way low, and until you are comparing apples to apples, you will never know. When you become part of a bid you can see how it fits into the overall project budget, and how that develops as the drawings are developed. Spending time with field staff, either superintendents or foreman, can be very beneficial as well.

I have a friend in the Cornell MSRED program and he said the construction classes they took were pretty much useless.

 

First bump to the CM crew on WSO faking it till we make it. I think working at a shop that has hands on PM roles would be more beneficial and will help on development side if that's what you want to do. It takes so long..years and years to really know what you are doing in construction that a certificate may not be worth it. Just try to find a spot where you can dive in head first. I did 6-7 years in CM role out of UG before transitioning to development and yet am still leveraging expertise of the consultants and contractors - and honestly that will continue my whole career.

 

I've found CM knowledge incredibly helpful in development. Half of putting together a development deal in the midst of tight market conditions is trying to squeeze the model from every angle to make the yields work. If you understand the impact that hard cost variables have on your project--nuances of subsurface parking, soil issues, sheeting & shoring design, key material costs--you can effectively skinny the model around a variable that can comprise 50%+ of your total costs (in some markets).

That's not to mention CM knowledge can help you realize when a site that looks OK on paper will actually get you in major trouble due to site logistics issues (construction staging and relative schedule impacts), urban infill problems (underpinning, etc.), cost inflation problems in the market, etc. It's fine to be a development deal guy, but hard costs are a major budget line item and understanding how you get to that all in number makes you just as dangerous as the capital markets guy or the dude who knows land comps like the back of his hand.

 

I only skimmed the above comments but it sounds like your best opportunity to get more CM experience would be to find someone in your company with that knowledge and ask to shadow them when they go to OAC meetings, or scope coordination meetings with the design team and/or contractor(s). Taking courses and putting it on your resume will show initiative, but not much knowledge will be gained that will let you jump into a CM type role (and companies know this). You should expect to start at the bottom if that's the direction you want to take. I don't think it would help much for managing construction in your own portfolio either.

Array
 

Definitely try to get someone to take you under their wing so you can tag along on multiple occasions. Maybe offer to take meeting minutes. At the least, take notes while in meetings and look up all the acronyms you didn't understand, or you can come ask me later. Try to grasp what the issues were and follow how they progress over a few weeks, then use those for "experience" stories if you get interviews for potential places you want to work. But, only use topics you fully understand as your interviewer, out of natural interest in the subject, may ask detailed follow-up questions that you might not be able to answer or comment on - use a topic that was fully resolved.

Array
 

depends on what direction you want to go. construction knowledge is the bread and butter of a developer, and has (relatively) little value for an acquisitions person. your small multi portfolio could go in either direction, so it depends on what you think you would enjoy more. ground up new development or value add? then yeah, learn as much CM as possible. if you want to buy cash-flowing assets, then who cares? you can always hire a contractor for upgrades and maintenance.

 

I'm a cref guy and let's face it there is something badass about construction. However, unless you want to start your career over and become a construction manager eventually (earning what you earn now but often outside in the elements) then I think the best way is to start small and do it yourself. I plan on buying a three unit that needs a little work and then moving up the learning curve from there. In the mean time I'll read books and shadow the subs I hire. Just my two cents.

 

Great thread gents. Does anyone have suggestions for online materials, textbooks, etc. to close the knowledge gap for those of us who are not in development/construction but would like to learn more?

I'm looking at a 10 Unit MF purchase that would require a significant renovation component. Knowing what costs for the renovation would be is vital to effectively underwriting the deal properly.

 

Yes, I did it after about 6-7 years in the industry. No MBA. I'd say you don't 100% need an MBA if you go development or leasing route, but if you want to go finance/investment route, an MBA would help. Look for PM roles at places like CBRE - that would be a good lateral into the industry at least, then feel it out. Personally I went development route and current role includes sourcing/acquisition/manage DD process and PSA's/close on site/entitlement/construction and helping with TI's when they go to lease.

 

Depends on what you want to do for the REIT/REPE. If you want to be a construction guy there, you might need a couple more years of experience before making a move. If you want to be involved in investing (in a traditional sense), the best MBA you can get will be necessary. I finished a T20 program and had offers to join a REIT to give you an idea, and I started in a position similar to yours. I also would recommend working/interning part time while you're in a full time program if you can handle the load.

 

Working for a construction company in a role above someone swinging hammers is going to be your best option. A grad degree is nice on paper but I can't imagine it helps anywhere near as much as being in the trenches and seeing how big time construction firms operate. Every building and project are different, you need real tangible experience to be able to learn how to navigate all of the nuances associated with commercial construction. For a graduate degree in construction management to be the least bit useful the student should have a few years in the business before attending school and expecting a good job as a result of the degree.

giddy up
 

A lot of MRED programs will have a class or two in construction management. Honestly though, construction management is mostly common sense. Make sure the warehouse gives you the right inventory, make sure the right materials and methods are being used, make sure the job gets completed on time, etc. I did it for a summer for a Holiday Inn renovation. Learned some hilarious Spanish phrases, but more than anything it really skeeved me out about hotels. Now I know exactly what is behind the wallpaper.

Commercial Real Estate Developer
 

Its common sense if you're not the one running a project and simply following orders but if someone is running the show it is a very complicated process, especially working in major/union cities.

giddy up
 

I would think that you could spin that major as something relevant. Also, my dad majored in this as well. He owns a commercial contracting company now. (Where I am posting from actually)

"There are only two opinions in this world: Mine and the wrong one." -Jeremy Clarkson
 

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