Get close to your developer clients and learn from them

For all of us, this is a tricky time. As well as having to deal with our personal financial situations – mortgage interest rises, cost of living increase – all these things, of course, impact on our work in the built environment. It’s a particularly tough time for those running their own architecture practices, reliant as you are on your clients’ businesses staying stable and robust through the tough times.

I’ve lost count of the conversations I’ve had over the last couple of months about clients putting significant projects on indefinite hold, leaving practices with large teams suddenly without work and salaries needing to be paid.

On the other side of the table, developers seem much better equipped to deal with the ebb and flow of the market. Of course, it’s easier when you’re in control of the purse strings and the nature of contracts makes it seem easy to switch the taps on and off at a moment’s notice. But remember that developers have teams working on projects too and when the market outlook is tough, or when the money dries up, it can be just as immediate and expensive a problem to have a team dangling with a project on go-slow.

So, why do developers seem still to be better insulated? It’s because baked into our business models is an understanding that the market moves in cycles - that sure as eggs is eggs a boom will be followed by a dip. The smart developers are the ones who can see the dips coming and the really smart ones not only see the dips coming but invest and sell to perfectly catch the wave. Invest when the market is low, sell when it’s high.

The other tool used by developers is an ability to adapt to changing market needs. Will the rise in mortgage interest rates be a sustained one? Will that impact on the market for build-to-sell property? Is there an automatic uplift in rental demand in these conditions? Does that mean we switch to build-to-rent?

Of course, the answers to these questions depend on an analysis of how long market conditions are likely to last – property is not the fastest-to-market product. But what comes with money is usually smart advice and clever long-term thinking. And this is where the difference lies between the two sides of the developer/architect table – where there’s money, there’s funded research and opportunity to understand the changing world.

So, what lessons can be drawn from this for those of you running practices looking at a bleak order book for the coming months? First, I’d say get as close to your clients as possible.

I’ve argued many times on these pages for a better understanding between architects and their client developers. The closer you can get to your regular clients, the more you can talk about their business, the more you can understand how it can affect your own. Shift your horizon out – the further your horizon, the more time you have to plan.

That has to be coupled with the ability to be nimble in the service you provide. Also, in these pages I have argued hard that the best way to develop long-term rich relationships with your client developers is to specialize and become expert in a subject. I am always disappointed by architects who pitch me their work and insist they can do anything – at worst I don’t believe them.?At best I think that jack of all trades and master of none is just not that interesting.

I want to feel like the architects I work with know much more than me about the property we’re designing together. I want to feel inspired and challenged. Of course, in an economic situation like the current one I can understand that it might feel limiting to be so specialist – particularly if the sector you’re expert in is the one under pressure. But no sector is so specific that you can’t adapt somewhat, and this is where the clever play needs to be – how do you adapt your specialism to take account of the shifts in the market.

Is your specialism in residential development focused almost exclusively on social housing and relationships with local authorities? How do you adapt that to private sector build-to-rent developers? It’s more complicated than just imagining you can transfer skills if only you were given the chance – transferring your understanding of how local authorities work to the needs of private sector developers is chalk and cheese.

So, imagine how your deep understanding of local authority planners could be of great use to private sector developers, less smart than you are about wrangling the increasingly mercurial planning system. And pitch it that way.

I don’t envy small design practices trying desperately to survive in tough times. But, built into developer business models is an understanding that business will change in regular, reliable cycles. An understanding of how this could work for a design practice might provide a small bit of light at the end of that cyclical tunnel.

This article was originally published by Building Design. You can find it here.