Diversity in CRE: So You Want To Be A Developer?

NEW YORK CITY—What’s it like to be a developer? “There are so many different components that have to come together all on the same track,” Lisa Gomez, partner and COO, L & M Development Partners, told a room filled with people attending Avant-Garde’s Diversity in CRE event. “If you’re a person who isn’t comfortable jumping into the deep end of the pool without floaties, it’s probably not for you.”

Founded in 2011 by Adeola Adejobi, a graduate of Spelman College and Cornell Law School, the Avant-Garde Network promotes diversity and inclusion. She says people of color make up under 1% of the C-suite in real estate. To change that, her organization provides its 3,000 members business and professional opportunities that foster a strong network. One of the sessions from the two-day conference focused on being a developer.

“If you’re somebody who likes talking to management one minute, then finding where the construction guys are another minute, then dealing with a stack of legal documents the next minute, development might be for you,” Gomez said.

Who is the developer?

Margaret Anadu, a partner at Goldman Sachs, head of the urban investment group, succinctly answered that question: “The person who signs the guarantees.”

Daniel Chatters, VP, JPMorgan asset & wealth management, moderated the discussion. He then asked the panelists what factors they look for when selecting an investment.

“A deal that works,” answered Anadu. “We’re looking for transactions that make sense and are sponsored by individuals who have the expertise to do what they say they’re going to do.” If Goldman is looking at a transaction in a new geography or a new asset class, they want to make sure the developer and his or her teams have the necessary experience. Also, their vision of what they want to execute must make sense.

They have to know the exact “on the ground” needs. This includes understanding the decades and layers of challenges in the communities.

“When we’re evaluating a new developer to work on a new project, we’re very focused on who the partners are,” she added. Goldman evaluates the project’s context in the community, the zoning and the financial realities of what’s possible.

Dan Bythewood, Jr., president of La Cité Development, stressed support is important. He phrased it that going into meetings and facing pitchforks is a lot more difficult for any developer. Plus development is an expensive business requiring enormous amounts of money. They need to pay fees for consultants and lawyers. And with all of this, “There must be some certainty that you’re going to get over the finish line,” he said.

Developers must still be responsive to the community’s specific wants and needs. “It’s understanding and having that community trust you, that you’re going to deliver what they actually ‘need’ but what they ‘want’ might not be able to be accomplished right now. People have that trust that we’re going to deliver and we’re not going to tell anything but the truth,” said Bythewood.

When he first started his career, he learned, “Real estate is a relationship-based business.” Bythewood added, “And that still holds true today.”