Industry Insights

How to Begin a Career in CRE: A Roadmap for Navigating the Commercial Real Estate Industry

If you’re trying to begin a career in CRE, this roadmap is for you. The fact is, the commercial real estate (or CRE) industry is a vast and varied field. And it offers numerous options for anyone seeking a rewarding career path. Currently, there are many career opportunities, and compensation in this field has been rising for years. With more than 3.7 million jobs in the United States tied to CRE and accounting for approximately 13% of the GDP, this is an industry that is ripe with potential, both for growth and for success.

But here’s the problem. It’s not always easy to navigate such a dynamic and diverse landscape. It can be downright daunting for both newcomers and industry insiders alike. But in this guide, we’ll take a look at the various career options available in CRE and provide invaluable insights to help you begin a career in CRE and get your search started on the right foot.

Exploring CRE Career Paths

When it comes to starting a career in CRE, the first step is understanding the multitude of career paths available within the industry. Contrary to popular belief, CRE encompasses much more than just brokerage and development. From acquisitions to asset management, appraisal to consulting, the field offers a plethora of roles catering to diverse skill sets and interests.

  1. Real Estate Career Roles: It doesn’t matter if you aspire to oversee the development process, or if you want to manage existing properties, or if you’re interested in specializing in acquisitions and asset management. There are many different career roles to consider within CRE. Each role plays a crucial part in the investment cycle of real estate, offering unique challenges and opportunities for professional growth.
  2. Real Estate Property Types: It’s essential for you to understanding the nuances of different property types if you want to navigate the CRE landscape effectively. There’s multifamily residential, retail, office, industrial, hotel properties, and more. And each property type presents its own set of challenges and considerations. But when you develop expertise in a particular property type, it can enhance your marketability and proficiency within the industry.
  3. Real Estate Firm Types: Which type of firm interests you? Whether you choose to work with a limited partner, general partner, or advisory/service firm, understanding the distinct characteristics and investment philosophies of different firm types is vital for aligning with your career goals and aspirations.

Key Steps to Begin a Career in CRE

It’s important to take the necessary steps to start your CRE career on the right foot. There are some crucial elements you just can’t overlook along this journey.

  1. Education and Training: Don’t skip education. You can equip yourself with the knowledge and skills necessary to excel in CRE simply by investing in quality education and training programs. There are institutions like the CCIM Institute and others that offer a wide range of educational resources. Some offer online courses and self-study programs, too, covering essential topics like finance, law, and transactions.
  2. Gain Practical Experience: Hands-on experience is invaluable in the world of CRE. So, be sure to consider opportunities to intern or assist at a CRE firm, volunteer for relevant projects, or engage with industry professionals to broaden your skill set and deepen your understanding of the field.
  3. Build Your Network: There’s just no way around this. Networking is the lifeblood of the CRE industry. If you want to succeed, you need to connect. Take advantage of networking opportunities to connect with fellow professionals, brokers, lenders, and appraisers. Attend
    local, regional, and national events to expand your network and forge valuable relationships within the industry.

Following these insights and best practices can help you get on the right track and ensure career success.

Now is the Right Time

Embarking on a career in commercial real estate offers limitless possibilities for growth, success, and fulfillment. By exploring the diverse career paths, gaining practical experience, and building a robust network within the industry, you can pave the way for a rewarding career journey in CRE. Remember, the key to success lies in continuous learning, proactive engagement, and a genuine passion for the dynamic world of commercial real estate. So, seize the opportunity. Begin a career in CRE today!

Hopefully, this guide will serve as your roadmap to unlocking the doors of opportunity in the ever-evolving world of commercial real estate. Jump right in and discover the endless possibilities awaiting you in this exciting and fulfilling industry.

Sources:

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employment value proposition

Actionable Steps to Establish an Employment Value Proposition

There’s a hot new term in HR that employers are focusing on to hep give them an edge over competitors in the hiring war. In commercial real estate, hiring and retaining superstar talent can be essential to long-term success. So, it makes sense that businesses in this field are asking about how to improve their employment value proposition to attract better candidates.

Just What Is an Employee Value Proposition?

This term is relatively new, but the concept is as old as time. So, just what is an EVP or Employment Value Proposition, and what does this mean exactly? In short, this term envelops the sum total of the value your organization can provide to potential employees. From the salary to the benefits to the workplace culture and employee development opportunities, your company benefits your employees. In exchange, they provide you with their skills, knowledge, and time.

But why should they?

What sets your company apart from all the other organizations in the commercial real estate space? That’s where your EVP comes in. It’s essentially your brand, but measured in the value you provide employees in exchange for the value they provide to the company.

How to Craft an EVP

It’s not as simple as setting a high salary and calling it quits. The fact is, CRE compensation is still on the rise. So, if that’s your only focus, you could be burning through a lot of capital to keep up. There are several key components that make up a vibrant employment value proposition, including:

  • Compensation
  • Benefits
  • Stability
  • Respect
  • Location

These form the core of your employer brand and represent a promise to your workforce. To attract high-value candidates to fill your openings, it’s essential to craft an attractive EVP. Here’s how to go about it:

  1. First, identify what sets your company apart. What are your unique selling points? Why would a potential employee want to work for you over another group?
  2. Second, brainstorm to get a grasp on employee needs. What do employees want from a job in your field? How can your company empower people to meet these aspirations?
  3. Next, incorporate your company’s mission and goals. Your employment value proposition should be closely aligned with your values and culture to show potential hires with similar values the benefit of plugging in there.
  4. Then, review for integrity and authenticity. Is your company’s work schedule flexible? If not, don’t say it is.
  5. Next, be tangible where possible. Put your value in their hands. Have you included everything that is relevant to their desired value, like PTO, learning opportunities, bonus structures, etc.?
  6. Lastly, it’s important that your business communication effectively showcases your employment value proposition. Is it relatable? Is it compelling? Bring it to life with testimonials and specific examples.

Review for Success

Now that you have your EVP established and crafted, what next? Well, an employment value proposition isn’t a static thing. It needs to be reviewed and updated often for ongoing hiring success. Measure results and get feedback. This enables you to rethink your EVP and adjust for changing times and needs.

As you follow these actionable steps, you may find your proposition focuses too much on collective benefits and not enough on individual value. Or you may find too much emphasis on material value instead of the non-tangible benefits. Keep adjusting.

This continual cycle of reviewing and improving can help you craft an attractive employment value proposition that gives you a competitive edge for many years.

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How to Weather a CRE Recession

It’s no secret that things haven’t been great for commercial real estate for over a year. Since at least 2022, a cooldown has been in the forecast. Higher interest rates and other developing factors have led many to ask if a recession is coming for the CRE industry and the US economy at large.

In the world of CRE, recession could mean anything from a collapse to minor correction. Understanding the trends and how to stay ahead of them could be critical. Here’s what we think you should be paying attention to.

Is Commercial Real Estate Facing a Recession?

The US commercial real estate market is valued at around $21 trillion USD, but it faces challenges amidst rising financing costs and increased vacancies. Historical patterns suggest the market may be moving through denial, migration, and potentially panic phases.

Transaction volumes have decreased over 2023, and spreads between buyer and seller expectations have widened. Notably, the office market, estimated at $3.2 trillion, faces a significant shift due to remote work trends, with approximately half of office buildings currently occupied.

The 2020 crisis changed the way we work, introducing new patterns into real estate demand. This was exacerbated by changes in retail demands, leaving vast office spaces underutilized. Of course, this poses a risk of foreclosures, layoffs, and economic downturns, impacting property values.

However, while these factors are certainly not good, they don’t mean the sector is crashing. Is a recession on the horizon? Quite possibly.

Nevertheless, some point to positive signs like the robust millennial population, the global economic influence of the US market, and the potential for lifestyle revolutions through remote work, technology shifts, and others. These all indicate potential resilience in a downturn.

How Would CRE Be Impacted?

Recognizing fundamental shifts is crucial for navigating the CRE landscape. There is much reason to believe a recession is developing in the near future. It may be severe, mild, or it might even be years away. But whatever challenges exist, systemic strengths and optimistic prospects for the future suggest the risk lies more in missing strategic moves than in an imminent recession or market collapse.

If a recession does come due to increased interest rates, it will likely come in the form of a moderate downturn driven by weakened fundamentals and higher capital costs. But it will have far reaching ramifications. Lower asset values may also play a role.

The impact on the office sector could be significant, as hybrid working trends reshape demand, requiring adaptation in cities and the real estate industry. However, certain sectors, like data centers and industrial real estate, may show real resilience.

While a recession could mean reduced real estate investment and leasing activity, there are also positive signals. The market is not over leveraged, there is a strong balance sheet, and growth drivers such as the digital economy and reshoring of manufacturing can minimize damage. That said, it will likely continue to be a buyer’s market – something CRE professionals have not seen for a decade.

Geopolitical improvements, such as the end of the Ukraine-Russia war, could ease the recession’s impact, with falling commodity and food prices and increased stimulus in the Asia-Pacific region. Still, there is risk going forward, and CRE firms should be cautious. A 2024 recession could reshape the CRE landscape, impacting asset values, demand patterns, and investment dynamics.

Resilience Measures You Can Take

Whatever the future holds for commercial real estate, there are some common-sense steps to help you weather a storm.

1. Keep Cash Flowing

Make sure you’ve got some cash on hand or easy access through credit lines when banks tighten up during tougher times. Having a financial safety net to cover gaps and grab opportunities that may pop up can set you up for success in a CRE recession.

2. Lighten the Load

Don’t let high debt levels knock you out during a downturn. Deleverage, even if it means selling assets.  This creates resilience and increases flexibility.

3. Smart Loan Moves

Refinance any existing debt to give yourself more runway. Push those big payments five to ten years down the road so you can handle any bumps along the way. Try to negotiate upfront on what happens if things don’t go as planned.

4. Hold Off on Big Projects

Don’t dive into major projects that need lots of cash. When banks stop lending and owners can’t refinance debts that come due, it’s smart to have wrapped up big projects in advance to minimize risk exposure. You don’t want to be delivering a big project in the middle of a crisis.

5. Bet on the Winners

Focus on investments that can weather the storm. Stay away from properties that might become obsolete, like old industrial spaces and offices with less-than-ideal features. Keep an eye on developing industry trends and changes happening in the industrial, retail, and office spaces.

In short, take steps now to minimize the blow of a downturn or recession.

How to Weather a CRE Recession Read More »

How Technology is Reshaping CRE

Currently, the commercial real estate (CRE) sector is undergoing a profound transformation fueled by a technological revolution moving at breakneck speeds. In recent years, these innovations have not only streamlined operations but have fundamentally reshaped the way professionals navigate the industry.

From optimizing processes to making more informed decisions, CRE technology is playing a pivotal role in the evolution of the industry. This article explores key insights and perspectives on the role of new technology and how it is shaping an reshaping the present and future of CRE.

The Rise of AI

Artificial Intelligence (AI) is emerging as a transformative force in the commercial real estate (CRE) industry, reshaping traditional practices and revolutionizing decision-making processes. And the adoption of AI in the CRE sector is becoming increasingly prevalent, with notable impacts on operational efficiency and strategic growth. AI’s role in data analytics stands out as a game-changer, providing professionals with valuable insights into market trends, tenant behaviors, and investment opportunities.

But what’s really interesting is that the infusion of AI is not merely a supportive tool. It goes deeper, representing a true paradigm shift and offering nuanced perspectives that empower professionals to make informed decisions in a rapidly evolving market.

AI has profound ramifications for property and facilities management, helping with analyzing building functions and layouts, systems management, and other organizational tasks. Property managers are directly impacted by this cutting-edge technology, allowing them to streamline their tasks from security to efficiency to tenant engagement. Even commercial brokers can leverage AI to help with lead generation and prospecting.

The integration of AI in predictive analytics is key as well. This and other CRE technology advances are allowing investors to navigate market trends, assess risks, and strategically position themselves for success in the competitive landscape of commercial real estate. And in spite of skepticism among some, others are realizing that the strategic growth harnessed through AI is proof positive that AI is steering the CRE industry towards a tech-driven and data-centric future.

Proptech

Proptech, or property technology, is a buzzword you may have heard recently. And no wonder, because proptech is playing a transformative role in reshaping the commercial real estate industry. Proptech refers to the use of technology-driven solutions and innovations to enhance and streamline various aspects of the real estate industry, spanning property development, management, leasing, and investment.

One notable area experiencing this transformative shift is property management, where the integration of proptech is streamlining processes and improving overall efficiency. Professionals can effectively showcase properties and reach a broader audience, marking a shift from traditional practices to more tech-savvy and strategic approaches.

Proptech’s impact extends beyond operational efficiency to sustainability. Smart building technologies, a subset of proptech, is contributing to energy efficiency and environmentally conscious practices within the industry. The focus is on data-driven decision-making and providing accurate and real-time information to enhance the decision-making processes. This in turn aligns CRE practices with broader environmental considerations.

This dual impact on efficiency and sustainability positions proptech as a pivotal force in driving the future evolution of the commercial real estate sector, offering innovative solutions to meet the demands of an ever-changing market.

A Perspective on CRE Technology

What’s interesting about current CRE technology breakthroughs is that these are not mere assists. The technological evolution within the commercial real estate industry is dynamic and transformative. From proptech solutions to the integration of AI and data-driven decision-making, technology is propelling the industry forward. Greater transparency, efficiency, and collaboration are now possible on a broader scale.

And it goes without saying that CRE professionals must embrace these innovations to stay competitive and navigate the ever-changing landscape effectively. Looking ahead, the synergy between technology and commercial real estate promises exciting possibilities, driving efficiency, sustainability, and strategic growth in the sector.

These technologies are forever reshaping the industry, making new things possible and old things easier. It’s really an exciting time to be in CRE!

Sources:

How AI And New Technologies Are Revolutionizing CRE Investing (forbes.com)
How Technology is Changing the Commercial Real Estate Industry – Lumicre Group
How Proptech is Reshaping the CRE Industry (matthews.com)
Sustainable Building Design Trends Shaping the Future of CRE – Building Careers (buildingrecareers.com)
(12) The Role of Technology in Commercial Real Estate | LinkedIn
CRE Future: PropTech and Smart Building Innovations (partnersrealestate.com)

How Technology is Reshaping CRE Read More »

Uncertain CRE Job Market ‘Like A Middle School Dance’ — And No One Is Making The First Move


In a recent feature, Carly Glova, founder of Building Careers, provided insights into the 2024 Commercial Real Estate (CRE) job market. Initially poised for a rebound, the industry now grapples with uncertainty as both job seekers and employers exhibit hesitancy amid financial and transactional ambiguity. Despite expectations of a subdued year with limited hiring and lower raises, the sector hasn’t witnessed the anticipated massive layoffs, despite a 50% decrease in transaction volume. Firms seem to be adopting a cautious approach, choosing to weather the storm and maintain a holding pattern instead of implementing significant headcount changes or expansion plans. The prevailing tight labor market and concerns about rising costs in an inflationary environment contribute to an overall reluctance to adhere to traditional hiring practices, creating an atmosphere reminiscent of the aftermath of the Great Financial Crisis.

For more details, check out the article here.

Uncertain CRE Job Market ‘Like A Middle School Dance’ — And No One Is Making The First Move Read More »

upskilling

Upskilling: What Is It and How It Can Help You

Upskilling is the process of adding new competencies to an existing skill set. Employers may upskill staff through corporate training programs in order to gain a more proficient workforce. Workers may upskill themselves via continuing education, certification, and private training.

How To Upskill

Upskilling builds on your current proficiencies through training, education, or on-the-job learning. Unlike reskilling, which involves learning an entirely new skill set, upskilling adds to the knowledge you already possess.

Major employers including Walmart, Verizon, and Marriott make heavy investments in upskilling and reskilling programs. Many employer-sponsored programs focus on hard skills like coding, cloud computing, and digital marketing. But soft skills are also in demand—Verizon’s Skill Forward program focuses on communication and teamwork, as well as technical skills. In a ZipRecruiter survey, 93% of employers said that soft skills play a critical role in their hiring decisions.

You can also upskill yourself on your own, taking continuing education classes, participating in internships, or completing a certification. Upskilling can help you become better at your job, earn a promotion, or adapt to new challenges in your industry. It can also help you future-proof your career!

Rapidly evolving industries mean that even workers who stay in their current jobs will need to add to their skill sets in order to stay current.

Upskilling Example

Let’s say that you’re a software developer. You have a bachelor’s degree in computer and information technology and several years of experience designing and developing software to suit users’ needs.

You like your job, which allows you to use your creativity and problem-solving skills to help design new solutions to challenging issues. But your ultimate career goal is to become a chief technology officer, which may require you to earn an MBA and gain experience as a computer and information systems manager.

Read More: https://www.thebalancemoney.com/upskilling-6752070

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Sustainable Building Design Trends Shaping the Future of CRE

In today’s rapidly evolving world, new, sustainable building design trends are reshaping CRE. These construction methods and sustainable building techniques are rising in popularity and taking center stage in the commercial real estate (CRE) industry.

CRE professionals want to stay ahead of the curve and fully understand the emerging trends that are shaping the future of sustainable buildings and CRE. And it actually pays to stay informed about these industry developments. So, let’s delve into the exciting innovations revolutionizing the CRE landscape and how to better prepare for these trends.

Net-Zero Energy Buildings

One of the most prominent trends in sustainable building design is the rise of net-zero energy buildings. These architectural marvels generate as much energy as they consume, resulting in a minimal carbon footprint.

With advancements in renewable energy sources like solar panels and geothermal systems, net-zero buildings are becoming increasingly feasible and cost-effective. They not only reduce environmental impact but also lead to substantial energy savings for building owners, making them highly attractive from both ecological and economic standpoints.

One building that perfectly demonstrates this sustainable building design trend is The Edge in Amsterdam. This structure is known as the world’s most sustainable office building and incorporates innovative technologies such as solar panels, rainwater harvesting, and intelligent lighting systems to achieve net-zero energy consumption.

Green Roofs

Lately, green roofs have transformed the concrete jungle into urban oases. These eco-friendly rooftop gardens not only provide aesthetic appeal, but also offer a host of other environmental benefits. Green roofs improve air quality, reduce stormwater runoff, enhance insulation, and mitigate the urban heat island effect. And even more exciting, they create inviting spaces for relaxation and socialization, boosting the overall well-being of building occupants.

For example, the Salesforce Tower in San Francisco boasts a stunning green roof that spans an impressive 5.4 acres, contributing to the city’s commitment to sustainability while providing a tranquil retreat for employees. That’s over five acres of growing space crowning just one office building!

Smart Building Technologies

With the advent of the Internet of Things (IoT), smart building technologies are revolutionizing the way commercial properties operate. Part of this move toward sustainable building design trends is the rise of intelligent buildings.

From energy management systems and occupancy sensors to automated climate control and intelligent lighting, these technologies optimize resource utilization, enhance occupant comfort, and streamline building maintenance. By collecting and analyzing data in real-time, smart buildings provide valuable insights for efficient decision-making, leading to significant cost savings and environmental benefits.

Again, The Edge in Amsterdam showcases this principle of smart building, utilizing an array of sensors to monitor and adjust lighting, temperature, and ventilation in real-time, creating a personalized and energy-efficient workspace for its occupants.

Circular Economy Principles

Embracing circular economy principles is another of these emerging sustainable building design trends. Rather than following the traditional linear model of “take-make-dispose,” the circular economy promotes the reuse, recycling, and repurposing of materials.

In other words, buildings designed with circularity in mind are constructed using renewable or recycled materials, incorporating modular and construction techniques that allow for easy disassembly and reconfiguration. This approach not only reduces waste and minimizes resource consumption, but actually fosters a more sustainable and resilient built environment.

The Reversible Experience Center in Eindhoven, Netherlands, is an inspiring example of circular construction. Its modular design allows for components to actually be disassembled and reused in future projects. This creates essentially a closed-loop system that minimizes waste and maximizes resource efficiency.

Competitive Advantages in the CRE Industry

The adoption of these sustainable building design trends provides significant competitive advantages for professionals in the CRE industry.

Companies that prioritize sustainability attract environmentally conscious tenants and investors, positioning themselves as leaders in the market. Furthermore, sustainable buildings often command higher rental rates and lower vacancy rates, translating into better financial performance and improved long-term asset value. Additionally, sustainable practices contribute to a positive corporate image and can attract top talent who are increasingly mindful of environmental responsibility.

CRE professionals must stay informed about the emerging trends in sustainable building design and construction. From net-zero energy buildings and green roofs to smart building technologies and circular economy principles, these emerging innovations are reshaping the future of commercial real estate.

By embracing sustainability, professionals can gain a competitive edge, attract high-value tenants and investors, and contribute to a more environmentally responsible and economically viable built environment.

Remember, the future of commercial real estate lies in creating sustainable spaces that not only meet the needs of today but also safeguard the planet for generations to come. So, let’s embrace these emerging trends, drive positive change, and shape a brighter future for the CRE industry.

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Is Commercial Real Estate Cooling?

With Fed rate hikes continuing indefinitely, many are asking what the future holds for CRE. Are we finally at the end of the bull market? While it seems a recession is more and more likely, just how will this impact CRE?

Perhaps the biggest question in the minds of professionals is whether or not commercial real estate is cooling down. Has a slowdown already begun? Just how will capital markets affect real estate? Let’s wade into these waters to get a better handle on what the rest of this year and 2023 will look like.

Interest Rates

It’s no secret that commercial real estate is a highly leveraged industry. Interest rate hikes are not our friend. And it would seem that recent rate hikes will continue for a while. Because the cost of capital is rising, investors are more hesitant. Higher interest rates mean smaller margins and greater risk. It’s quite likely that over the next year or more, success in CRE will require more capital and more effort than the previous few years.

However, there is currently somewhat of a disparity between capital markets and property markets. While rising interest rates are making it more difficult to fund new projects, we still see strong fundamentals. Most commercial properties are still outperforming expectations. Commercial real estate may be cooling, but it seems quite gradual.

Other factors are holding up. For example, job growth is still strong. CRE compensation is still rising, as demand remains strong. And liquidity is still profound at this juncture, leading some to theorize that an inevitable downturn will not be nearly as severe as the 2008 recession. Not all recessions are the same, and if we are entering one, it might be a mixed bag.

Market Sectors

2022 has not been a bad year for CRE. Though it all depends on which asset class you are looking at, commercial real estate in general looks rather strong considering the headwinds it is facing. Indeed, the remainder of 2022 looks promising, in spite of some commercial real estate cooling in the forecast.

Retail Properties

In densely populated areas, retail spaces like strip malls are performing well. Class B and C malls are struggling, but that’s nothing new. These buildings may present an opportunity for adaptive reuse as fulfillment centers or industrial space.

Multifamily Properties

Current vacancy rates are lower than they were in 2019 for multifamily, with rents at near-record highs. Nationally, the US is facing a housing shortage estimated to be between 2 million and 5 million units. Add to this the advent of Gen Z renters entering the market, and there is a strong argument to be made for modernizing and updating apartment space even during these uncertain times. Even Baby Boomers are selling their homes and renting in apartment spaces at increasing levels.

Office Properties

Offices are evolving, and companies may need to rethink how much office space they need. In an age of hybrid work and work from home, it is likely that demand for office space will decrease and change. How companies use their spaces will likely change, too.

Industrial Properties

Industrial space is still experiencing a boom, thanks to growth in ecommerce. Warehouses and fulfillment centers continue to be in high demand. Even though most commercial properties will likely see some level of slowing during a recession, if consumers continue to purchase online, odds are industrial space will remain in demand.

What’s Next?

There’s no denying that CRE deals are slowing down. Commercial real estate is cooling down like everything as interest rates climb. But as the balance shifts from a sellers’ market to a buyers’ market, there is immense opportunity to capitalize on new deals. The strength of multifamily and industrial are very promising.

Cheap debt is a thing of the past for the foreseeable future. As such, more-speculative deals aren’t as attractive. But with the shift, sellers are more likely to make favorable concessions to retain potential buyers. Bargains will once again enter the marketplace.

Office space will need some time to adjust to new formats and uses. Commercial real estate cooling will likely continue for a time as the overall economy reacts to rising inflation and rate hikes. But analysts are optimistic about new opportunities and long-term viability.

Is Commercial Real Estate Cooling? Read More »

CRE Job Market, Facing Cooldown, ‘Like 2 A.M. In A Club’

Taking the temperature of the labor market anytime between Memorial Day and Labor Day presents challenges, considering huge strategic decisions tend to get pushed to the fall. But the general sentiment of analysts, brokers and recruiters interviewed for this story suggested that anxiety had already curtailed opportunities, firms were taking steps to slow down new hiring, and any significant slowdown could have significant impact on the long-term recruitment of younger talent, especially brokers.

These shifts in the job market have taken place against a backdrop of declining CRE deal volume, which dropped more than 50% from a recent record of $347B in Q4 of 2021 to $172B in Q1 of this year. Many experts predict rising interest rates will dampen enthusiasm for deals going forward.

The foreshadowing of a more difficult job market on the horizon contrasts sharply with the optimism felt at the end of 2021 and early 2022. A Bisnow/SelectLeaders survey of 130 industry HR execs from February found many expected the year to bring more jobs, higher compensation, even additional benefits; more than half expected to hire more in 2022 than 2021. And in late 2021, industry experts argued that firms, stung by labor shortages, were gearing up to pay more.

Those predictions have generally held through the first half of 2022, especially in many of the hotter sectors in CRE, such as industrial, life sciences and multifamily.

But the job market is increasingly taking a conservative turn, said Kaitlin Kincaid, Keller Augusta senior managing director, with companies becoming more thoughtful about budgets, more choosy about roles and taking more time, especially when deciding on management and executive roles and specialty positions.

Jackson Lucas Managing Partner Chris Papa, who runs a CRE-focused recruiting firm, said that there’s increasing interest in debt and equity-focused roles, as well as a demand for asset managers: It’s vital to be important with your assets during a downturn.

“I feel the changes have been in the amount of hiring,” Building Careers President Carly Glova said. “Teams are looking at whether they really need to hire someone.”

To read the full article, visit the link below.

https://www.bisnow.com/national/news/top-talent/real-estates-red-hot-job-market-on-precipice-of-slowdown-113787

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CRE Compensation Still Rising

The past two years have seen unprecedented growth and change for the CRE hiring scene. And sustained shortages in commercial real estate roles have created a talent war, leading to rising CRE compensation expectations. Candidates are expecting more. And firms are being forced to get creative in order to land top talent with the right qualifications.

Lingering Effects of the “Great Resignation”

In 2020, when literally one in four firms froze hiring and most jobs were either put on hiatus or changed to work-from-home status, the prospect of a labor shortage might have seemed silly. Yet within a year, what has come to be described as the “Great Resignation” rocked the workforce. As many preferred to go into early retirement or work a side hustle or just stay home, firms began noticing how challenging it was to find new hires.

Pair this was with a period of significant economic growth in the rebound from the COVID crisis, and you’ve got a major talent war. In 2021, a large segment of firms in commercial real estate began reporting difficulty in meeting their hiring needs. Since then, however, the problem has only worsened. And now, in 2022, firms are still feeling the lingering effects of this stark drop-off in talent.

Around 60-70% of all CRE firms are still challenged by the lack of supply. As a result, the cost of filling a new opening is mounting. This is especially true for roles in high-demand fields where competition is fierce. Anything requiring specialized or technical know-how are commanding top dollar right now. Analysts are in very high demand. This is also true of professionals with a more general proficiency in a variety of skills.

And because the cost of turnover or replacing existing staff is so high – as much as twice their annual salary in many cases – there is also an emphasis on retaining top talent as a cost-saving measure.

Facing the Rising Cost of CRE Talent

In response to these shortages, salaries and compensations packages are rising dramatically. Some executives are reporting upwards of 20% compensation increases when they switch companies. Most companies are hiring middle management in particular. And diversity candidates are among the most sought after. But firms are learning they will have to pay for them.

This has brought about a shift in compensation packages – a reset of sorts. The talent crunch has brought workplace issues back to the table for renegotiations. CRE professionals are expecting more flexibility and work-from-home options. In reality, there is still a gap between what they’re asking for and what firms are willing to pay. But many are offering telecommuting options up to four days a week. And bonus realizations based on performance goals were at about 90% last year.

In reality, there is a renewed push for reevaluating corporate culture as a whole. Today’s CRE professionals are empowered by these changes and can demand more for their investment in a firm. Thus, CRE businesses should carefully analyze what they offer these candidates and expect to significantly alter their compensation packages – not only the bottom line, but also in work-life considerations and cultural concessions.

With around 78% of CRE firms aiming to have an increased workforce in the near future, some are even offering equity to middle-to-lower management to sweeten the deal. CRE compensation is becoming especially negotiable around young and promising new talent capable of pivoting these companies into the “new norm.” As the commercial real estate landscape evolves, those leaders who can facilitate a transition are particularly valuable.

Looking Forward

With talk of a recession mounting, it would seem that the era of rapidly rising salaries and compensation packages for commercial real estate is nearly over. There have been recent talks of layoffs for the first time since 2020. In June of this year, layoffs in the tech-related sector were announced.

While once thought invincible, CRE jobs in the tech space are now in question. But some believe this is only part of the cycle and that the overall trend will be for higher and higher demand, even in this space. Of course, no one can predict what the next year will hold. But the strong demand in commercial real estate, coupled with the historically low supply of talent, seem to spell continued growth in CRE compensation.

Now is an exciting time to be working in CRE. Those seeking to grow in their career have ample room for it. And those firms seeking to evolve and improve have an opportunity to address workplace norms and culture in new and unprecedented ways.

CRE Compensation Still Rising Read More »