Are Architectural Designers an Asset for Developers?

Question

Hello All,

I'm a young designer looking ahead at my career and wondering if there is a more profitable path for me outside of the traditional architectural practice. Currently I design architectural projects of many sizes across the country, but it seems that all of the value (and profit) from my efforts goes to the client. I'm left feeling deflated, and often disappointed at what the end product has been stripped down to. My ideal situation is to fund and design my own projects, seeking out the property, making the deal, and then using good design to generate a solid profit. My question to this community of professionals is this:   Is there a value for designers/architects in the real estate/property development arena? Where does "quality in design" fall on your list of priorities? Am I making a valid connection between architecture and real estate?

Dorothy Ma · Answer

@Tyler Hiatt I was in the same boat as you, working for a national firm here in Denver, feeling the same way about how design gets lost and how I have so little control over design of projects.  I am now developing a 6 unit townhome here in Denver and starting design on a 28-unit development.  I think more architects should combine the whole process - design/build/development.  It can be difficult when making VE decisions because you are the owner and the designer - so you want to profit as the developer but also carry out good design.  For me, I value design more so I'm willing to sacrifice some profit to product a better product, which I believe is why architects make better developers.  When you streamline the whole process, you can save money on the design/build side and on decision making - change orders happen less and mistakes get caught in the field faster when you wear all the hats because you are familiar with the project and the design intent.

Brandon Gowen · Answer

Tyler,

You bet there's value! However, I would recommend doing all you can do to understand how a developer thinks and acts. Your value ultimately will come when they trust that you know how deals and capital work through the entire process. As architects and designers, we have the ability to see and develop an entirely different value set of a deal, which is qualitative. Most investors and developers only focus on the numbers and "quantitative" value of a project, and could be missing some serious returns with value added by good, thoughtful, passive design! I'd say, too, if you haven't seen Jonathan Segal's "Architect as Developer" series you should check it out.

https://www.architectasdeveloper.com/home

All the best to you!

Matt Burr · Answer

Hi Tyler,

I am an architect from San Diego also interested in development and real estate investing in general. We (architects) bring added skills to the project, we provide the design, understand what can be built on the lot and have a good sense on construction cost.

We also provide instant sweat equity. Some banks will give you credit for a set of drawings that you have prepared (architecture, landscape, mechanical, electrical, etc) and any development costs (renderings, models, development fee). This credit can be used as part of the capital needed up front.

There are a lot of successful architect developers out there, especially in San Diego.  Do a little research  and you will find there is plenty of information out there for us architects.  Good luck to you!

Mike Wood · Answer

@Tyler Hiatt, I believe architects provide value, but there is a limit to it.  Being an engineer myself, I understand the value.  You mentioned that the profit goes to your client.  I think you need to put it into perspective, the developer is the one taking the risk.  Generally the Architect is getting paid regardless if the project goes ahead or not.  Generally they dont take on much risk.  Its about risk vs reward.

If you are willing to take the risk to be the developer, then you can reep the rewards.

As for feeling deflated, i would suggest putting things into perspective. This is not your project, you are working for a client. You are supporting that client and all of the workers used to build and develop that project.  In the end, you help to create something real, that people value, and serves a real purpose.  Developers need to make choices to make the project work, does that mean it got "stripped down"? Maybe, but it could be the without making those hard choices, the project would be nothing more than wasted paper, and never get built.

I suggest you focus on the fact that you are able to be involved at all.  Think about the people that get employed, and the end result.

Dorothy Ma · Answer

My development firm consists of me and a contractor (who happens to be my husband). We have mentors who are also our business partners with on the 28 unit project.  I have 8 years of experience in a traditional architecture firm, but none of it has been in residential - I worked in education/civic architecture.

Tyler Hiatt · Answer

@Dorothy Ma Are you doing this as a sole practitioner, or have you built a team? If so, what is your team dynamic like? Who did you bring over from "the other side" to help you be successful? Also, how much experience did you get practicing traditional architecture before you ventured into developing your own work?

Kevin Fox · Answer

Hey Matt.

I'm interested in hearing more about what you do. Shoot me a PM if you'd like to connect and network.

Thanks!

Are Architectural Designers an Asset for Developers?

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