Every industry has them. In PR, we have ‘spin’ (the thing people think we, the ‘spin doctors,’ do). Generally, the dirty words in any industry are the result of a little bit of truth and a whole lot of generalization. Pull back the layers of the onion a little, and you’ll see the reality is much more complicated. Context is everything.
The topic of hot-button words came up recently in a team meeting.
“They still think ‘developer’ is a dirty word.”
That got us thinking. What are the words that we’re conditioned to avoid in commercial real estate? And are their bad reputations warranted? Over the next few months, we’ll unpack some of those words, starting with today’s installment: Developer.
The most common stereotype regarding property developers today is that they’re in it for a quick buck. They descend on a neighborhood, squeeze every last dollar out of the available real estate, drive up prices, push out longtime residents and don’t much care about how their development changes the character of the neighborhood or its environmental impact.
Is the stereotype accurate? Unfortunately, sometimes. But certainly not always.
The truth is, it’s a bit of a ‘don’t hate the player, hate the game’ situation. At issue are the metrics that define success for the real estate market. Most often, success is not measured through factors like placemaking, contextual design, longevity or value to the community unless those factors will contribute rapidly to increasing the value of the property. Because just like most investments, the metric that drives real estate is the return, and people typically want to see that return as quickly as possible. So, there’s not a great incentive right now for developers to sensitively consider, manage and reinvest in their properties for the long-term good of communities or the environment.
That said, there is a growing class of developers and investors who recognize the unsustainable nature of the fast-paced real estate cycle and they’re trying to change the way success is measured, focusing on life cycle performance and community impact.
As we move through this next phase in the commercial real estate cycle, the term ‘developer’ is likely to continue its evolution. Hopefully with a growing number of examples of how doing the right thing is actually smarter business in the long run, we’ll see the word take on a more positive connotation.