Why Architects make the best Property Developers

As mentioned previously in articles such as Why I chose to become an Architect-Developer and The Project That Changed My Career, I believe the insights and skills architects develop throughout their careers are of transferable value for property developers. However there are some crucial differences that need to be recognised to prevent putting capital at risk..

During this article we will explore the critical architectural skills that are perfect for property development, but crucially, the typical architect habit that can actually work against property developers, and potentially hurt the effectiveness of this profession. I believe once we have understood this then the transition from architecture to property developer will be of great value to site owners and investors.

First however, let’s go through the disadvantages that architects have that simply do not work as a property developer!

The disadvantages of an architect becoming a property developer.

Insufferable Perfectionists

Let’s face it, architects can be insufferable perfectionists, and there is a good reason for that. Architects often zoom in and out of the building, and are extremely attentive to fine details whilst taking into account the large picture, to achieve, well…perfection.

Whereas the developer knows that during the early stages of property development especially, such as sourcing land and gathering leads, perfection can lead to analysis paralysis. The developer must keep the ball moving and focus on iteration, rather than being idealistic and perfectionist.

If an architect is to make the transition to property developer, this is the first quality they must to let go of to some extent, and instead, prioritise rapid iteration and real world feedback as a means of reaching the most perfect outcome.

Financially Illiterate

Now I know these titles are designed to grab attention but it’s safe to say you don’t go through five years of university racking up a huge student finance debt to become an architect and can come out the other side financially literate.

When we talk about financial literacy we are referring to cash flow and financing strategies to get projects off the ground. Unfortunately architects simply are not taught that anywhere in their student and professional careers.

Even a mediocre developer with superb financial skills is far better off than a highly skilled designer with poor financial understanding, because things like having margin for error and ability to create detailed appraisals is what defines a professional developer.

Limited Risk Tolerance

Although the role of architect is set up to mitigate risks and problem solving, in the end they still work for a fee, rather than working for capital.

This means that architects can be far more risky in their designs, and can really stretch what is possible through their imaginations.

This isn’t a bad thing, however property developers understand the downsides to investing, and are constantly weighing their profits and contingencies to ensure the strategy is going to return their investment.

Lack of Sales Experience

Even though architects are great problem solvers, they typically don’t like selling. I know many architects that get quite embarrassed or shy when with the prospect of selling a product or themselves.

I believe this comes from the fact that architects spend a lot of their time and energy into the visual elements to communicate their message, so their verbal skills do not get sharpened.

Whereas developers are constantly selling to get buy sites, negotiate prices and convince people that they and their scheme are to be taken seriously. Property development is as much about persuasion as it is about design and construction.

Cost

And finally, architects in general have a very poor understanding of how much the project will cost. Although architects provide viability studies, they don’t usually appraise sites to ensure that it is financially viable. This is where the difference between the architect and the property developer is the widest.

Property developers are constantly thinking about where the biggest leverage is. Instead of working out just simple construction costs, property developers analyse taxes, planning risks and any fee that needs to be paid during the lifecycle of the development from planning to construction.

The advantages of an architect becoming a property developer.

Planning Expertise

It’s true that Architects see many types of buildings go in and out of planning over the years, and in doing so they usually develop a deep understanding of the planning system and can navigate the UK’s complex legislation.

This is one of the best reasons architects make fantastic property developers because if you can’t present a proposal to a planning officer in the way they would like, then you are going to have a hard time getting the scheme approved.

The UK planning system can be quite a tough and gruelling process for large projects especially, so having more experience and expertise in this area is of major benefit.

Technical Knowledge

Understanding construction and spotting technical issues early is definitely a super power that can save a hell of a lot of money along the construction process. Having technical knowledge is incredibly valuable because it allows the developer to ask better questions and get the solutions to apparent technical risks early.

The type of technical knowledge that architects possess can mitigate major design errors and construction clashes sooner due to their ability to think in 3D experience in working on various details and building elements.

Moreover with this technical knowledge, architects are able to communicate and detail their brief much more effectively than would otherwise be possible, this makes the entire process of design and construction incredibly smooth and clear for all parties.

Problem solving and management

The practised architectural skills developed throughout tens and hundreds of projects makes architects uniquely skilled at problem solving both verbally and visually. They can draw up a solution to the problem in minutes, or redesign a detail on the fly to ensure that the scheme works for everyone.

Property development requires balancing the budget whilst maintaining quality and aesthetics, not to mention coordinating consultants, contractors and suppliers. These present mult-variable problems that need to be balanced with commercial objectives, and having that problem solving mindset like architects do, will prove of great utility.

Value engineering

Architects should know what materials cost less, and they can often reduce the cost of construction without affecting the perceived appearance and quality of the end product. At the start of a project there are many different viable solutions to the same problem, and if the viable solution requires less cost to build then designing that in becomes very attractive.

As a property developer, having a value engineering intuition allows you as the developer to understand how to get the most out of the build without overspending on materials and labour. For example, pre-fabrication of building elements can be a great way to save money and labour to really fast tract the building process, and is why most projects use a combination of pre-fab and on-site construction.

Design quality

Let’s face it, design quality does lead to faster sales and a stronger commercial interest. Good design should be part of the business strategy because it directly leads to better valuations, it’s not just a subjective element, the proof is in the pie.

Architects spend a huge amount of time designing and improving the quality of the end result through many technical and design mitigation touches, which makes it such a valuable skill to have for property developers.

If property developers have this skill in understanding design quality, they can ensure that they do not make the mistake of overlooking the value of good design. It is quite often that architects and design fees are squashed down to try and make a project seem viable, however this is a mistake. It’s far better to pay the money and spot the clashes early, than have to pay time plus costs later down the line, where quality takes a hit.

The Architect-Developer

So for the architect becoming a developer, ensuring they have a solid financial understanding and ability to appraise a scheme's viability is paramount, rather than focusing on perfection, which can oftentimes cause analysis paralysis. Property developers need to often think more like entrepreneurs, who iterate, and think outcomes based.

Moreover once they get a solid foundation on costs, it's also their ability to negotiate that they become a priority, in order to convince investors and engage in deals. Because at the end of the day there is a level of risk tolerance that is needed, and if you can prove to people that you are not a risky investment, then the results speak for themselves.

However I believe architects make the best property developers because they have unique problem solving skills and pay attention to details that allow risks to be identified very early in the development process. These problem solving and team management skills allow for the project to be designed well to leverage the highest quality whilst engineering value at every stage for the best possible gains.

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