The Inside Track to Careers in Real Estate

Stan Ross, James Carberry

• Publisher: Urban Land Institute
• Year: 2006
• ISBN:
  9780874201833
• Edition: 1
• Topic: Business
• Subtopic: Real Estate
• Index: Business

Addressing the lucrative real estate industry, this book helps determine whether a career in real estate is the right choice and reveals how to get started in the field.

Chapter 1

A Real Estate Career: The Big Picture

Like many people, you may not realize that real estate is so J much a part of your life. Think about it. You live in a house or an apartment. You shop at malls, buy food in supermarkets, and have your teeth cleaned in a professional building. You work in an office building. You stay in hotels or at a resort. You eat in restaurants, attend the theater, have season tickets to a sporting event, work out in the gym, belong to a tennis club. Maybe you keep some of your paraphernalia in a public storage facility.

You are a constant user and perhaps even an owner of real estate. But have you ever considered real estate as a career?

This book is designed to help you answer that question. It is intended to help you decide whether you want to pursue a career in real estate, as well as to help you learn about the many career opportunities available—so that you can consider the available choices and decide on a suitable career path. You can find a very meaningful and fruitful career in real estate if you start by determining how your skill sets, strengths, goals, and desires match the various career opportunities that are available. Career planning is essential, whether you are in school, fresh out of school, or at midcareer. Some people—not only students, but also people with 20 years of professional experience—do not give sufficient thought to career planning.

While The Inside Track to Careers in Real Estate is intended mainly for students and professionals in the United States and students and professionals from other countries who are interested in studying or working in the United States, the increasing globalization of real estate suggests that more career opportunities in real estate are becoming available to students and professionals worldwide. Thus, this book also looks at opportunities for American students and professionals to work outside the United States.

This book is about careers in the private sector. It does not cover government sector careers, although the public sector at the city, county, state, or federal level offers interesting and rewarding career opportunities related to real estate development. To be sure, many private sector real estate career paths can be enriched by public sector experience with, for example, a city planning and zoning department. Such public sector experience can increase your value to private sector employers by giving you, for example, firsthand knowledge of how the project approval process works.

What Is Real Estate?

What is real estate? According to the investorwords.com glossary, it is land, including the air above it and the ground below it, and any buildings or structure on it. But real estate in a broad sense is not merely property. It is also an industry made up of thousands of companies producing products and providing financial and property services, an investment class, and a highly regulated enterprise.

An Industry

Development is the part of the real estate industry that produces a multiplicity of products, the most common of which include office towers and business parks, shopping centers, warehouses, hotels, single-family houses, townhouses, and apartment buildings. These products are created by developers and construction contractors working with architects, investors, and consultants in a variety of specialties. They may be built and held for long-term investment, or they may be sold to investors or ultimate users. Decisions to create these products are primarily driven by the market—the households, the businesses, and the other entities that buy or rent space.

A Mix of Businesses Centered on the Use of Land

Thousands of companies large and small develop, build, buy, own, rent, lease, manage, and sell properties. Their scope of business may be local, regional, national, or global. The development and management of properties is a complex undertaking that involves a host of service-providing businesses as well, including brokers, asset managers, facilities managers, project managers, lawyers, and many others. Like developers and operators, these service providers may operate on many levels, from local to global.

An Investment

Real estate is, like stocks or bonds, an important asset class for investors. Pension funds and other institutions as well as small partnerships and individuals invest billions of dollars in real estate every year, either through direct investments in properties or through indirect investment vehicles like mutual funds or real estate investment trusts (REITs).

A Highly Regulated Enterprise

In most places, the development of property is subject to building codes, zoning and subdivision codes, environmental laws, planning laws, and citizen participation requirements. The zoning and entitlement process for a large residential subdivision or a commercial project is often complex and protracted.

Why Choose Real Estate?

People have gone into real estate by accident, design, or necessity. Some real estate professionals have started fresh out of school, others at midcareer. Some have come from liberal arts undergraduate programs, others from graduate programs in real estate, and others from a variety of careers, such as teaching or high technology.

To help finance his studies for a doctorate in psychology, James Chaffin worked as a real estate broker in Hilton Head, South Carolina. Today, as president of Chaffin/Light Associates, he builds resort and recreation communities, using his grounding in psychology to assure that they meet the quality-of-life needs of his market.

Some planning classes at USC’s School of Public Administration had sparked Richard DeBeikes’s interest in real estate development, when, in his senior year, he flew to the USC/Notre Dame game. On the plane he was seated next to Jerry Jamgotchian, an executive at Ernest W. Hahn Inc., a shopping center developer and owner (which was sold in 1980 to Trizec Properties). As a fellow Trojan, Jamgotchian offered DeBeikes an opportunity to intern at Hahn, and thus started him on a career in real estate. Later, DeBeikes became a junior partner, in the Halferty Development Company (Jim Halferty is another USC graduate), running its Irvine, California, office; and eventually he opened his own firm, DeBeikes Investment Company.

A history major in college, Larry Webb became a teacher for a few years, and then decided that he wanted a different career. He began his real estate career with a consulting, marketing, and research firm that gave him an opportunity to learn about real estate. He went on to work for various homebuilding companies, and today is CEO of John Laing Homes, one of the largest private homebuilders in the United States.

Why do people choose to go into real estate? The reasons are numerous. To some people its appeal lies in the challenges and opportunities for entrepreneurship that it offers. To others, the idea of building something and the durability of buildings are important. Still others look forward to the opportunity to help shape the urban environment or to engage in public issues. Its monetary rewards (commensurate with the risks) are not unimportant.

Q&A: Donald J. Trump

Wharton School graduate. World-famous developer. Office, hotel, residential, casino, and golf course owner. Best-sellingauthor. Philanthropist. Star and coproducer of NBCs The Apprentice.

“Tenacity is absolutely necessary. If you don’t have it, don’t go into real estate.”

What’s the biggest challenge graduates face in pursuing a career in real estate?

Academic credentials can serve real estate professionals well, but there is no substitute for the skills and acumen that come from exposure to the industry. Acquiring that experience—and learning from it—will be the biggest challenge for every graduate.

What counsel would you give new graduates pursuing a career in real estate?

Decide where your true passion lies. Don’t try to please someone else in making a career choice. Make sure it’s your own choice. Then focus on it and simply don’t give up. Tenacity is absolutely necessary. If you don’t have it, don’t go into real estate.

If a gradate is interested in development, what’s the best way to get experience?

Work for a real estate developer and learn everything you can. Like a great photographer who translates a vision into reality through photographs, a developer has a strong vision that he realizes through his projects.

What are companies looking for from new graduates?

I look for people who are committed and loyal, people who take their work seriously and are disciplined. I don’t have time for people who aren’t responsible to themselves, to me, and to the positions they hold. Look at it this way: What kind of person would you like to have working for you? Be that kind of person.

What will make people tomorrow’s leaders in the real estate industry?

Those who have vision and discipline will succeed. One is useless without the other. With both, you have a likely chance of becoming a leader, provided you’ve learned and sharpened your instincts through your experiences.

There follows a list of common reasons that real estate professionals give for their choice of career.

To Build

Developers like to build. In fact, they tend to have a passion for building, for applying their imagination, talents, and resources to the creation of buildings. They like building something of value, whether it is a massive mixed-use project like London’s Docklands; a large-scale planned community like Irvine, California, or Columbia, Maryland; a standout skyscraper like Chicago’s Sears Tower; a small-scale office building, shopping center, or apartment project; or single-family housing.

Alan Merson was fascinated by buildings and construction from a very early age. That interest led to a career in construction, and today he is a vice president of Morley Builders, a private, employee-owned construction company in Santa Monica, California.

Darryl Brown also had an early interest in development. When he was in college, he and a friend were driving through a neighborhood when they saw a piece of land they thought would be perfect for development. However, they had no money and no development experience. But their instincts were right. Brown checked out the site several years later and found that it had been completely developed. Today he’s housing director at West Angeles Community Development Corporation, a church-affiliated community development corporation in Los Angeles.

To Feel a Sense of Accomplishment

Developers who are passionate about their work take great satisfaction in seeing what they have created. Wade Cable, president and CEO of William Lyon Homes, a home-builder, likes homebuilding “because you have a sense of visible accomplishment. You start with a raw piece of land and in the end you have produced a home for a family.” Smedes York, president of York Properties, a family-owned, full-service real estate business in Raleigh, North Carolina, says that he takes pride in driving by projects his company has developed. Bret M. Nielsen, vice president for leasing and acquisitions at Caruso Affiliated, a Los Angeles-based developer, is fascinated by how developers can turn empty land into tangible assets, much like an artist can turn a blank canvas into a painting.

Q&A: Donald Bren

Chairman of the Irvine Company (beginning 1981) and majority shareholder(from early1990s). Homebuilderin Orange County, California, 1958 to 1963. Founder o( the Mission Viejo Company (1963), developer of the 10,000-acre new community of Mission Viejo. With a group of investors, purchaser of the Irvine Company from the Irvine Foundation (1977).

The Irvine Company

Developer of the nations premier master-planned community on the 93,000-acre Irvine Ranch in central Orange County, California. Most of the company’s land and property holdings are in Orange County, but it also owns investment properties in Los Angeles, San Diego, and Silicon Valley. Its portfolio includes approximately 400 office buildings, 35 retail centers, 80 apartment communities, two hotels, five marinas, and three golf courses.

“I believe few careers can compete with real estate development for personal satisfaction.”

Would you recommend real estate as a career path, and why?

Absolutely, and for several reasons. First, unlike some industries, it’s not going away. Real estate will be here in perpetuity. As our country and world grow, so does the demand for real estate of all kinds—homes, apartments, offices, industrial space, and retail centers. It is a significant and comparatively stable segment of our economy. And, as an investment, it continues to create wealth for many, many people. I believe few careers can compete with real estate development for personal satisfaction. First, developers create spaces that people need and want—places to live, work, shop, and play. We have the satisfaction of filling basic human needs. Further, each project is different and challenges our creativity, imagination, and good sense as businesspeople. We have the opportunity to start with a dream or an idea, and guide its evolution into a completed project. Nothing is more satisfying than seeing ultimate users enjoying real estate projects that we have created.

What are the most important characteristics for success for an entrepreneur or a professional working for a company?

Success starts with proper academic training and on-the-job experience. A background in business and finance— marked perhaps by a law degree, an accounting degree, or an MBA—makes an excellent foundation. I have found exposure to art, architecture, landscape architecture, design, and politics to be invaluable. Success comes to those who can exert leadership, think big, and take reasonable and well-reasoned risk, who have the courage to make decisions, and who are disciplined. Real estate can be a very difficult and challenging business. Successful professionals must have the determination to invest the extra time and energy necessary to pursue creative, out-of-the-box solutions to the enormous challenges—whether an architectural issue, a community concern, or a complex business decision—that present themselves.

What’s your perspective on opportunities in the real estate industry for young people?

As far down the road as I can see, I see unlimited opportunities. Even if opportunities for large-scale master planning and development in areas like Southern California diminish, our region and the nation as a whole are experiencing massive redevelopment and infill development. It is an exciting and challenging industry that will test our abilit...