Architects often make excellent developers - if only they’d realise it, writes Roxana Mohammadian-Molin
As specialist development finance lenders, we often work with a wide range of property developers, mostly mid-sized housebuilders, carrying out anything from converting a dilapidated industrial building or old factory in need of caring into fresh new apartments to building ground-up houses. But there is something truly refreshing about working with architects as developers who put their money where their mouth is and who know how to navigate the winding journey of development.
For decades, innovation was considered a dirty word in housebuilding, a sector that was referred to by economists as ‘the backwards industry’ due to its reluctance to embrace technological innovation. Others described the industry as ‘conservative’ – some still do.
The reality is that for decades efforts to disrupt the industry have been consistently failing while many other sectors were embracing innovation. But things have been changing as of late.
We have witnessed a quiet, yet forceful transformation spearheaded by a new generation of younger, digitally-savvy, design-conscious, and socially engaged non-conforming property developers who are eager to leverage the power of tech innovation to help improve how we build, live, invest, and act sustainably. And architect-developers sit at the heart of this new generation of innovative property developers.
They also bring a fresh perspective to the development process
Property development is a lengthy, often challenging and multi-step process, certainly not one for the faint hearted. But one of the great advantages of living and breathing construction and knowing the true cost of sites, labour, materials and fees is that architects are among the best professionals to navigate the swirling waters of the property development process.
They also bring a fresh perspective to the development process, often seeing value in places that others would disregard as a dead space. So, it is no surprise that as development finance lenders, we love working with architects-developers and often find ourselves supporting them in their journey. They certainly are like a much-needed breath of fresh air, creativity and innovation into an industry that is beyond ripe for being disrupted.
London in particular has proved a fertile ground for architect-developers as the city offers plenty of opportunities for innovation and fresh thinking. Squeezing innovation into a challenging site is a valuable skill, and sky-high London prices mean architects in the capital have had to excel at doing just that.
Such was the case of architect-turned developer Tom who last year had his eyes set on a site in his neighbourhood of Tower Hamlets then occupied by a garage storage unit and a studio above. Tom and his business partner, fellow architect Matt, wanted to develop the promising site into four apartments – a mix of 1, 2 and 3 bedrooms.
Of course, the project came with its fare share of challenges and required the architects’ eye for what could be done on the site, seeing an angle that a non-architect developer will have certainly missed. But the key skill that played to Tom and Matt’s advantage in this case was their ability to be quick and nimble, a quality that we have often spotted when working with architect-developers.
Tom and Matt were able to view the site on a Monday and make an offer on the Friday, whereas a typical developer would have had to bring his consultants to check it over, which could take up to six weeks.
On the design side, Tom and Matt’s experience as architects meant they were able to achieve greater balance and maximise space through higher quality design and by removing unnecessary empty space. But the real game changer and highlight (quite literally) of their scheme was the introduction of strategically placed skylights throughout the kitchen and dining area to drench these spaces into natural light and transform them into something spectacular.
On the planning side, this particular site already benefitted from planning. But what we often see with architect-developers is that their ability to analyse emerging planning policy in an area is crucial, especially where density rules are being changed or relaxed to increase local development.
As lenders, we love to work with a team who we are confident will deliver from start to finish
As lenders, we have often been amazed to see some of our architect borrowers come to us with sites with what we call “latent potential”, such as a disused industrial shed in a site that is part of an area regeneration plan, and therefore development friendly. It is very rewarding to work with them on such sites.
As lenders, we love to work with a team who we are confident will deliver from start to finish and who we see as a credible and professional operation. Tom and Matt’s experience gave us that.
In a nutshell, we are witnessing a long-overdue transition in the real estate and housebuilding sector. Technology and innovation are at long last making their way into a sector once dubbed ‘the backwards industry’. And architects-developers are spearheading the change.
Development finance lenders, especially nimble and agile non-bank lenders, must support the change. For us as lenders, it is great to work with these emerging developers eager to adopt tech to change how the industry does business as a whole and across its different verticals, but they are also keen to introduce new concepts – from modern construction methods to low-carbon houses; from shared living models such as co-living to connected home solutions.
Roxana Mohammadian-Molina is chief strategy officer at Blend, a specialist development finance lender that funds mid-sized property developers across the UK