Unemployment today is at lows last experienced in the 2006 to early 2008 period, a period when the competitive real estate job market caused compensation to skyrocket with equity offers on top of salary and bonuses, says the SelectLeaders Job Barometer. Compensation has fully returned to that earlier period in real dollar terms, but the current challenges in attracting talent argue that real estate compensation is due for significant increases.
One gauge of competition in real estate hiring tracked by the Job Barometer is how picky job seekers are during their search. In 2006 nearly 50 real estate professionals would view a job opportunity for every one application. In 2017 the ratio hovered around 30 professionals per application. Compare these to 2013, when financing and full real estate hiring still had not recovered from the global financial crisis, and an application occurred after 10 professionals clicked on a job.
The talent pipeline into commercial real estate simply isn’t that large, and we have experienced seven years of constant CRE job growth that absorbed the real estate professionals displaced by the global financial crisis with relatively few new entrants,” said Dr. David Funk, SelectLeaders chief economist. Applications to commercial real estate openings beginning in 2015 have fallen near to lows last seen in – you guessed it – 2007. The demand-supply gap in commercial real estate signals good news for job seekers and an increasingly heated battle for talent for commercial real estate employers.
Hiring in selected real estate fields has followed the SelectLeaders Real Estate Employment Cycle since 2007 as opportunities in development and acquisitions all but disappeared in 2008-2010 only to rebound by 2012 and now are in decline again as transaction volume has slowed down. Certain fields that did not even register in 2007, meanwhile, such as Real Estate Technology, have exploded as a real estate field and job opportunity.
Property management hiring activity presents an inverse correlation to transaction activity in commercial real estate. As companies focus on development and acquisitions during the growth cycle property management takes a back seat, but once the pace slows property management hiring coincides with stabilization and can be a harbinger of correction.
The sellers’ market is even more pronounced in selected real estate job fields such as property management, brokerage, accounting and control, and corporate real estate where the most significant mismatch between job and applicant exists. “Real estate fields broadly related to management of the underlying real estate still struggle to build the traditional pipelines, such as university programs, into their career paths,” said Funk, pointing out that job seekers are in an enviable position.
So what jobs are on the uptick? There has been a noticeable increase in opportunities that combine property and asset management responsibilities into one position, and the challenge in hiring for property management roles has led some employers to upgrade the position and focus on recruiting a new skill set.
Dramatic increases in real estate technology has allowed property and asset managers to expand their activity. Roles that used to be exclusively the domain of asset managers, such as performance metrics, feasibility analysis, and acquisitions due diligence, to name a few, are increasingly merging what were formerly property management roles. It has always been the challenge to find property and asset managers that could work well together, and now we are starting to see a ratcheting up of roles into a single, more highly skilled and compensated position.
California and New York remain the top magnets seeking real estate talent, with both states posting a higher percentage of overall jobs than a decade ago. Texas, meanwhile, will continue to grow as a destination for real estate talent while Florida is poised to surpass Illinois into fourth place.
This is part two of a two-part series on the SelectLeaders Job Barometer. Part one covered hiring trends.The SelectLeaders Job Barometer, published since 2006, is the foremost survey of employment opportunities, trends, and hiring practices in the commercial real estate industry.