Pros and cons of working for a large public real estate company compared to a 5 man development shop

I've been working for a large public real estate investment trust, and have been very taken back in just how much this place doesn't have their shit together. Basically what I am wondering is it par for the course where in the commercial real estate arena things just take forever and thus there's just a lot of down time. Between me and the other analyst that they brought on we both are taken back at the fact that we haven't done shit since we've been here. Pay is great, but I'm just not doing dick. I mean I've only been out of college for a year now, and I'm wondering if this is just part of the process, and eventually my workload will increase and ill miss these days. On the second hand, I've realized that I am much more interested in working for a small entrepreneurial development company that specializes in just one city. I feel as if people who are at the top of public companies just don't have that true entrepreneur in them and thus are just milking the place dry, compared to a small development shop whose developers put their own money at risk. Anyhow I'd love to hear if anyone has gone from a large REIT to a small 5 man development shop and whether or not things got better or worse once you switched. At this point I just want to prepare myself the best I possibly can to eventually venture out on my own and do some land assemblages and developments. Is there still a good bit of down time at smaller firms, or are these guys so nimble that if they hire you, their going to be working your ass off, and there's not as much of a chance of you just sitting by sidelines waiting for things to happen.

 
Best Response

It's hard to generalize because all companies are different, but in my experience larger companies in real estate have far more defined roles and are more silo'd in general.

I currently work for a 13-man shop and my job description is essentially "accomplish things." Some days that's making multi-million dollar decisions without consulting any one. Some days that's picking up trash at a property or driving 5 hours to drop something off because it would take too long to get it delivered. Essentially, no job is below me and no job is above my pay grade. Moving the ball forward is the most important thing, whether that's a 1-yard run or a 80-yard touchdown.

I worked for a "brand name" development company before this that's on the multifamily top 25 list and things were definitely different there. There was an established chain of command, a ton of difference to superiors, and clearly defined roles, tasks, and objectives. It was a completely different culture and atmosphere.

At the end of the day, both that company and my current company are successful, so clearly there are multiple ways to drive a job toward completion. It's really what fits your personality - if your current company doesn't, find one that does.

Commercial Real Estate Developer
 

Agree with this. Have also worked at both a smaller private developer and large public shop. Additional thoughts:

Private Company 1. You are forced to learn more related disciplines more quickly. Development guys at private shops are generally responsible from everything from site acquisitions/underwriting to entitlements and design to construction management. IMO, much better learning experience for someone just starting in development. 2. Processes can suck or be inefficient. Expect to just spend more time figuring things out. Your accounting systems may be inferior; you will be analyzing different scenarios for the first time with no precedent information. 3. Hours are longer. Generally more swamped. 4. Responsibilities more varied. Basically what CRE said. One day you may be modeling, the next in a design meeting, the next running a permit application down to the City. 5. Hairier, more interesting deals. Higher tolerance for risk. 6, So much BS investor reporting. Horrible amounts.

Big Public Shop 1. Bigger, sexier deals. Typically more core product. Well-established process for design, unit plan layouts, finish selection, materials, pricing methodology/process, etc. 2. Way more support. Big shops usually have dedicated construction estimators/PMs, dedicated design professionals, etc. who focus on one specific discipline. Allows you to deal with way less busy-work, but your responsibilities decrease/are more silo'ed (silod? siloed?) 3. Ability to do deals in more markets. 4. Little to no BS reporting (coming from private shop, this part is the bomb). 5. Much better work/life balance.

Long story short: if you are new to development, I would recommend getting reps at a private shop first. You will get exposure to many more disciplines than at a public firm.

 

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