I am a third year development associate at a 3rd generation private shop. We have about 6MM SF under management and I directly support the managing principal in new deals and development. It has been a great experience and I have learned a lot. I am decently compensated, 75k + 15% bonus. I am not exactly in an area I see myself in long term and would consider moving on to a big name developer such as Trammel or Mill Creek. Does anyone have any insight to pros and cons of larger developers like these? I am concerned that the longer I am with a private non institutional shop the less exit opportunities I may have down the road.
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It's difficult to say as there are no hard and fast rules here.
Generally though, at a smaller firm you're going to have a much wider range of experiences and responsibilities whereas at a larger firm your role is going to be much more defined and more narrow. At a smaller firm, you may be doing everything across the development spectrum - site selection, financial underwriting, land acquisition, design oversight, construction management, lease up/asset management, disposition, etc. - whereas at a larger firm, with an acquisitions team, a finance team, a construction team, and an/or asset management team, some of these responsibilities may be in the hands of someone else.
I say may because it really varies. Some firms are big name or big in headcount but still run very lean with smaller development teams than "small firms." What responsibilities these firms assign to development personnel varies too - Hines seems to be very finance-heavy while CIM seems to be very construction-heavy. But hell, that may just be the offices I know and not even a reflection of the overall culture and someone else could come in here and say that isn't their experience.
On top of that, there's the generic big firm vs. small firm pro/con list. Big established firms generally have benefits like well thought out structures, processes, etc. that are time-tested and make your job easier. They also typically have paternal nonsense like formal PTO structures, weird HR policies, monitor what websites you go to, etc. and can be less likely to give you carry or pref at a lower level.
At the end of the day, your deal experience matters more than the firm name, but the firm name still matters some, so if it's something you care about start looking around. You may fall in love, or you may find the trade offs don't work for you.
CRE nails it here. I'm at a large shop and just started a thread about moving from an institutional developer to a smaller developer.
from my experience (worked for a couple and have friends at some) institutional shops vary, some are more entrepreneurial and you wear a lot of hats and some you are placed more or less in one vertical and that's where you are expected to stay.
I would ask what the expectations are of obtaining carry/GP interest in deals if you stay with your current firm and what your end goals are. To many people, the end game in real estate is to acquire ownership in the deals you work on; this would theoretically be easier to obtain at a smaller shop than a larger one. for others, the end game may be moving up the corporate ladder with a well capitalized and respected firm. no right or wrong answer.
Do you have any examples of well known institutional shops that would say are somewhat entrepreneurial?
How would you make the most for working at a regional developer (50m-150m total capitalization of buildings). Assuming they're a Smaller mom and pop shop, hiring more staff. Should One be outspoken from the beginning to take on many responsibilities? Thanks.
to me, the best benefit having worked at a large institutional dev shop was that your access to debt/equity is seemingly limitless - market conditions bearing.
at a family shop, typically you have the same 1-3 partners that support every deal. Sometimes their investment parameters change, or they simple are too saturated in deals with you, and have limits to the partnering they can do. In this case, finding sources for accretive deals can be hard. Even if the deal pencils out and you think it makes all the sense in the world...if your long-time partner cant fill this need, you then have to go to market for the funding. This can be tough as a small shop, especially if it's your first time doing a deal with said partner.
This is inclusive of all the other points made above as well.
I think that the best way to start this career is to work in smaller companies, such Agentology reviews or so. It'll give you more opportunities to examine yourself, to learn lots of thngs on your own and of course to get a crucial development experience
I echo a lot of what has been said (CRE is pretty spot on), it's pointless to generalize "institutional" vs. "regional". Sitting in the NY area, I feel like many of the "regionals" act or seem far more corporate/institutional than big firms working coast to coast. I think that has a lot to do with the nature of NY business/finance culture.
The only consistent observation I've been able to make is that devcos tend to have teams/offices that reflect the culture of where they work and what they do. Meaning, Cali based teams/firms act like Cali teams, and NE ones act very differently. Also, retail developers are very unique to that area, as are multifam groups. And this can be within the same firm (if one with mutli regional offices).
I guess the bottom line is to do your due diligence on any firm you would work for and make sure you like and fit into the general culture.
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I know someone who use to work for Related.
They say it’s almost as if you’re “just working for a developer” but not actually “learning” the true ins and out of development as there is a separate department that handles every specific thing and you end up getting siloed in one area.
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