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WHAT DEVELOPERS THINK

Another great write up provided by Leonard Steinberg of COMPASS. Steinberg is a real estate agent in NYC but his comments below equally apply to the developers I have worked with in South Boston.

What Developers Think


Last week I participated in a panel discussion about entering the new development arena as an agent. Two of the panelists - some rather successful and experienced developers - shared with us some insights about what they as a developers seek in the markets and from us as real estate professionals:

1. Developers love individual agents with highly specific knowledge of hyper-local markets. They love WORKING with well-oiled teams that are capable of covering all aspects of development without a learning curve.

2. Developers love DEALS. If you want to gain the love of a developer, finding them a good deal to develop is the best inroad by far. This requires lots of hard work and a deep understanding of markets and potential future valuation.

3. Developer seek OPPORTUNITY at appealing pricing. One broke it down into the "FOUR D's": Death, Divorce, Desperation and Dumb. In death and divorce (or separation of partners)lie heirs who may want to liquidate or must liquidate. Desperation is all about financial burden providing buying opportunity. Dumb is all about people who may be sitting on an opportunity but don't know how to bring it to life, or simply don't know anything about development. They could be JV partners, or bought out.

4. Due Diligence: Developers do lots of it and thrive on data. In the New York area, many are turning away from closed sale data to signed contract data as the markets have shifted downwards. Intense due diligence can reveal both opportunity and potential hurdles.

5. Developers love a good TEAM: not just for marketing, which includes a comprehensive set of professional positioning and valuation advisors as well as public relations, creative, media placement, etc, but also a good zoning attorney, a general lawyer, bankers, an architect, a reliable builder, an interior designer, etc.

6. Developers love PROFIT. Developing and building is hard work with enormous risk. The greater and more guaranteed the profit potential, the more it is worthy of the time and the more buffering exists for surprises, mistakes and shifting markets.....all of which are almost guaranteed.

7. Developers have Big Ego's. Not all of them though. The smaller the ego, the more realistic they will be about expectations.

8. Developers are GREAT SALESPEOPLE: they have to sell their vision and ideas to bankers and financiers and family members. A developer without a vision is a disaster waiting to happen.

9. Developers are FEARLESS. At least they want us to believe that. In reality they are taking on enormous risk and they ARE fearful and scared a lot of the time. Most exude confidence. They must believe in what they are doing. The biggest fears of most developers is the cost of time: financing interest can eat up profit and markets change. Timing is everything.

10. Developers love/hate to hear the truth. ALWAYS be 100% truthful with your opinions and advice and feedback. While the roughest developer may respond angrily to the truth, deep down they will appreciate it more than a sugar-coated version of reality. You may get fired for telling the truth, btw....

The above should give you some insight into the mindset of developers. All new projects take a lot of time. NONE are the path to overnight riches.

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