Should I be wary of development shops hiring right now?
I recently got a Development Associate offer for an institutional developer in LA - I'm really excited about the position but I know development is a tough place to be right now. I'm taking it as a good sign that they're hiring and that they have a strong pipeline. Should I be nervous about hopping to a development firm right now?
Nothing is without risk right now. We(company I work at) are the equity behind a development platform and are pencils down at our level leading to the investment platform being constrained to a certain degree.
With that being said development is a risky business but I would say associates who perform well are probably not the first on the chopping block. If the firm has committed capital and believes they are active most you can do it take that at face value.
I wouldn’t hesitate to go to a great platform if that’s the direction you want to go in.
they might also have experienced massive turnover and finally realized they need to backfill. seen that happen with a couple shops - 2 people leave initially, workload for remainders piles up & ownership does nothing for 2 months, 2 more people leave, finally hire someone to help.
People are definitely getting deals to work.
Take the damn job.
This lol. Dev is a 5 year+ business plan, what's happening today is irrelevant if you are capitalized to get thru the storm.
You're a junior person. You'll be fine.
People way overthink this stuff on this site. No developer is hiring anyone without work for that person to do; people in general but also on WSO have a really bad habit of somehow assuming both omnipotence and incompetence in regards to employers.
These guys know their business better than you do. Also, development shops tend to run pretty lean, especially in down markets like we're experiencing now. If they're hiring, I promise they have something for you to do. Will that be true in 10 years? Maybe not, but who cares? Go get your paycheck, get your experience, and worry about what the world looks like in 10 years, in 10 years.
DM and I can maybe shed some more specific light
Bro got the Tishman job.
That NMS portfolio was dog doodoo
They're all re-entitlement plays, the shit they put together was awful.
Someone taking a dev job in 2021-22 should have been more nervous. I'd feel generally good about it now. Firms who can get projects off the ground right now will hopefully have one of the healthier delivery periods we've seen for a bit. And as others have mentioned, they probably wouldn't be hiring and tying up their overhead if they didn't think they could get projects off the ground (although I have seen cases where I've seen job postings for local developers only for them to go under a few months later, albeit these were typically for shady reasons and not completely market driven).
To answer your question, though, I'd be wary of any job I take right now. Winners and losers will be made here. Make sure you understand their pipeline and how they capitalize their deals. Do you believe in the sector, markets, etc. and the ability for these to perform over the next few years?
In this market the company is probably looking o backfill due to large turnover.
people can say development has 5-year shelf life, but acquisition, hard costs, and soft costs are up across the board, and that’s before considering that perm financing rates are at 6-7.5% right now.
it’s brutal in RE. Especially development. You may have some deals to work on, you may have some jobs to do, but do not rely on your job security.
Bro, you think some development shop is on a hiring spree because they cannot bear to see mid 20-something year olds go a couple months without making six figure salaries? They're not running a charity - if a firm is hiring, the safe assumption is that they've got projects in the pipeline, because why the hell else would they be hiring?
As I said above, don't overthink this shit. You're not getting married, it's a job. You exchange labor for a salary, and can walk away any time. Why be wary of a job opportunity when you can always move to another when things pick up?
My point was that the person should take the job, but always be looking for the next opportunity long before things get tight.
Use the development position as a stepping stone, but many developers are in a crunch to deploy capital right now and thus are selling the dream that interest rates are going to decrease soon. Once december hits and rates don't decrease, it's likely that a large round of layoffs will occur.
It happened last year when rates started hiking and that's why the job market is so bad right now. Without rates coming down it will only get worse, and that's why I said "do not rely on your job security". Things can get really bad in 6 months (source: I was a VP and have seen it first hand.)
You should be asking the employer this not WSO.
I think oz is correct that they wouldn’t be hiring if they didn’t have pipeline. Guys that have a real strategy or that are long term hold developers are still active in down markets - it’s not crazy to think they can build in the near future with supply virtually drying up in all major markets. Honestly every developer would love to be buying land right now if they had the right capital. Most don’t though, but a few do.
Just do your homework and if it passes the sniff test take the job.
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