Developers find undeveloped property, or what they believe to be improperly developed property, and build on it or convert it to its optimal use. The day moves at a frenzied stride. Successful developers love the pace and feel that without it, the job would be “just another paper shuffle.” To get a deal together, developers need to quickly coordinate the financial side, the production side, and the end-sales side. Few properties are developed these days without tenants already lined up for post-construction, placing an added burden on the developer, who must give the tenants a date they can move in.
Developers’ responsibilities depend on which of three areas they specialize in: finance, construction or recruitment. Those involved in the finance end are busiest at the initial stages of projects, when they research, explore and negotiate the terms of new deals. They work with banks, government agencies, and financial consultants calculating the feasibility of projects, reviewing sites, and planning for contingencies. Deals are very risky-they seem to earn either a continuing 18 to 22 percent return or a 35 to 44 percent loss. Financial developers oversee all payments, rates of production, and negotiations with banks during and after the development of a site.
Construction liaisons work with construction managers and local agencies to ensure that the structure is up to local building codes, that all necessary permits are obtained, and that production moves along on schedule. An understanding of basic engineering and construction principles is helpful, as are strong communication skills. Within development, professionals in this area seemed least satisfied with their positions. Eighty percent of respondents cited the role of “policeman” on the job as the least enjoyable, and several said they felt isolated. Developers who supervise construction can be caught between financial oversights of the financial developer and the mistrust of the general contractor. However, this position records the highest intellectual satisfaction among the three.
A recruiter puts together statistics, models, and plans for the site and then sells rental space to tenants. Recruiters must have strong selling skills, excellent negotiating instincts, and a grasp of construction scheduling. They must be comfortable working with numbers. Construction delays, labor hold-ups, or permit problems are not considered valid excuses for delays of occupancy, so many clients insist on penalties for missing the date of completion. Successful recruiters trade to a large extent on their expertise in construction scheduling.
While some thrive on the pace, the pressure gets to others. A staggering 18 percent of developers in their first five years in the profession leave each year. Most aspiring developers have to travel to be able to work on a variety of projects or risk long periods of time when their expertise is of little or no use. The ultimate goal for most people in development is working on their own projects. To do this one must have expertise, access to capital, and a strong stomach for high-risk stakes against unfavorable odds.
The aspiring developer needs an academic background emphasizing real estate, finance, managerial skills, psychology, or accounting. Many developers work for a few years and then return to school for an MBA, the degree of choice. Work experience in real estate or finance is important, too. Some employers require new employees to have real estate licenses or accounting accreditations prior to starting work. As specialization occurs within the industry, such accreditations as CPA and CFA become significant. Unlike many other fields where applicants are exposed to the entire process then slotted to their specific skill set, employees are hired for a specialization within a development company and immersed in the details of the occupation right away. Many spend extra hours and free time learning about the other parts of the process.
Developers who leave the field often move on to banking, investment banking, construction financing and real estate sales, all less potentially lucrative professions, but ones that carry much less potential downside and more regular income.