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The strategic choice of an Architect-Developer firm is to have the architecture firm develop its projects itself. This firm type illustrates the biggest problem in the industry: high supply and low demand for architects. There is an opportunity to develop residential and mixed-use building types because there is a growing demand for housing closer to urban centers. And, as design professionals architects are visionary and know better what a city needs than developers, who are more often strictly profit-oriented. In order to fulfill the strategic choice, the central varying choices are to hire architects who are interested in development and to connect with local officials. The unique choices are to get access to investment capital and to start a new project.
Hiring staff who are interested in development will have a consequence of them being ready and willing to do background project research like zoning, availability of land lots, market needs and so on. Considering the fact that most architects want to be designers, an architect without interest in business will most likely not want to do the due diligence that is required before initiating the project architecturally. It is a possibility to hire business-oriented staff with no architecture background to research, but in a small architecture office every staff member does all tasks required in a project, and it would be unusual to form a business department. Also, when an architect looks at an empty lot he/she already sees if it will be a good location for a particular building type based on the planning and conceptual design knowledge gained from education and experience. This is something an outsider will not be able to contribute, since it is easier to train an architect to do site research than to train a site researcher to be an architect.
Another central choice is to make strong connection with local officials. They are gatekeepers for the project to start through permitting purposes. They occasionally have funding for certain project types that enhance communities and they have influence on potential creditors. In summary, having an established relationship with the officials will lead to faster approvals and funding, and is better for this firm type.
The central unique choices are to get the investment capital and to start the project. Getting capital is not simple and could be a reason that not many architects become developers. In order to get capital the architect needs to prove the potential for return on investment and the legal possibility of building this project. The due diligence on site, initial design and permits need to be presented to the funders to get access to capital. This is already a lengthy and expensive process for a small firm. And getting the funding will allow starting the project which is, in itself, another unique choice that other firm types have to wait for client to do.
The reinforcing choices are to design and to build the project. This would lead to project completion. A complete project can then be monetized, creditors can get paid and the remaining balance will be firm’s profit. Another reinforcing choice is to provide the in-house construction document services. Once the firm is running smoothly this will be an advantage. Initially, while it is trying to get a few projects approved, it may be be better not to have full-service architects on staff to minimize the costs.
Now that all the choices have been discussed we can look at the virtuous cycle consequences that are the result. Compared with the other firm types, this firm is selling a final product instead of a service. The reputation and the success of this product will be important in getting permits and more funding for future projects. If the community in which the development took place is using the buildings to the fullest and enjoying them, then the firm will be able to continue developing the area until it are no more opportunities and earn profits based on market conditions. Once the area is built to the maximum, the developer may choose to enter a different community where he/she will have to make new connections with city officials and creditors. Despite being extremely risky this firm type will enable for the architect to have autonomy compared to a normal architect-client relationship, and allow making better choices for the communities.
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