In a recent survey of 290 financial analysts working in the U.S. commercial real estate industry, RETS Associates identified several employment trends. The market for real estate financial analysts is at or near a high point in the cycle…
With a new administration and a “pro-growth” strategy in place, the CRE industry is anticipated to continue expansion and growth in 2017. This is evident already in the first quarter of 2017, as RETS Associates sees robust hiring similar to that of 2016. Firms are searching for development, acquisition, asset management and project/construction management roles. […]
DOWNLOAD PDF In a recent survey of 239 financial analysts working in the U.S. commercial real estate industry, RETS Associates identified several employment trends. The fifth annual survey results, factored with 27 analyst searches conducted by RETS year-to-date, revealed these key points: • The greatest salary growth went to analysts with master’s degrees, longer tenure […]
Just as property investments have continued to increase, the cost of acquiring and retaining talent has skyrocketed. Kent Elliott, a RETS founding principal, notes that it has resulted in sticker shock for some companies. In one instance, a West Coast firm seeking an asset manager expected to pay a salary in line with its current employees, but discovered that competitive salaries had grown by $30,000 to $40,000 beyond that level. “They had to bring in someone at a much higher compensation – and of course that created its own problem.” Kent says, “Ultimately, they gave raises to all their star performers.”
Several factors driving the remarkable increases:
• Low unemployment at all positions in the commercial real estate field. A or B players are fully employed and bring bargaining strength to the table.
• Less new talent is entering the commercial real estate industry.
• Interim or temporary positions are slow to fill because most CRE professionals are employed; often the temporary staff are booked 30 to 60 days ahead.
• The current, most active positions are in Asset Management, Construction/Project Management, Financial Analysis and, of course, the field property level positions.
In a recent survey of 344 financial analysts in the U.S. commercial real estate industry, RETS Associates has identified several significant employment trends. Combined with the 50+ analyst searches conducted by RETS in the last year, RETS’ fourth annual study showed that:
• 75% are open to relocating for a new position
• 49% are seeking advancement in acquisitions
• A clear majority (55%) of financial analysts preferred to work as generalists with mixed portfolios
• By comparison, only 16% preferred multi-family, while office and hotel/hospitality followed at 9% each, retail at 6% and industrial at 2%
• 24% currently earn a base salary of $75,000-$89,999; 21% did not receive an incentive compensation for their role in 2014 (mainly due to short tenure)
• 83% of the polled financial analysts are male
Although the U.S. unemployment rate is fairly low at 5.5%, RETS estimates that the commercial real estate industry is currently posting unemployment at half that level. Business is expanding, hiring is brisk, and well-qualified candidates can be selective in their professional options. The most successful organizations will have a hiring plan in place and will be ready to act quickly when a leading candidate is identified.
Speed is essential, but companies must also reach out to impress candidates with fresh opportunities and assure them of a good fit in their organization. Most candidates are currently employed, often with very good compensation package and benefits, so firms must be ready to step up with offers designed to attract top talent. Candidates are seeking positions with a career path from both short and long term perspectives. A difference in healthcare coverage, and/or a flexible work schedule and paid time off can make or break an agreement. As a REIT Vice President recently told RETS, “Two weeks of annual vacation time won’t bring quality, Millennial generation talent on board in this market.”
The strong surge in the U.S. economy during the final months of 2014 continues to fuel the growth in RETS’ business as 2015 begins. Even the traditionally slower December-January time frame remained active, and RETS finished the year with a record-breaking total of more than 450 searches. The strong economic recovery, which began gaining visible traction in 2011, has opened fresh opportunities for both job seekers and the organizations in need of top talent. A look at the five-year patterns shows that specific search segments within the industry have varied, but overall demand in most markets has grown at a healthy rate.
The robust job market has had two dramatic effects as firms compete to hire the best candidates: compensation packages have increased dramatically, and the selection process must be speedy and efficient. Top candidates are receiving multiple offers, so companies must define and refine their candidate selection process and be prepared to move quickly.
RETS Associates recently completed a survey of 270 financial analysts across the U.S. in the commercial real estate industry. The data compiled from this survey coupled with the 50 financial analyst searches handled by RETS over the past 12 months has provided RETS with keen insights into this segment of the industry.
As the overall health of the real estate industry continues to improve and reach levels that have not been realized since 2008, employers continue to hire financial analysts in droves. For the 12-month period ending in July 2014, RETS has seen an 80% increase in the number of financial analyst searches handled compared to 2012. The financial analyst segment is a great entry point into commercial real estate and the growth in demand for these professionals bodes well for the industry.
Through the first five months of 2014, RETS has surpassed all previous hiring metric records in our 13 year history! In the past, the number of job searches were typically lighter during the first and last quarter of the year, but since 2010, RETS has seen a 248% increase in its Q1 job searches – that is an additional 87 searches in one quarter. Our record also indicates that our overall number of searches have almost doubled from 2010 to 2011 and then increased an additional 21% from 2012 to 2013. This confirms that the economy is continuing to grow and business opportunities are flourishing. A few highlights:
DIRECT AND EXECUTIVE RECRUITING
Going into 2014, RETS has continued seeing a rise in direct (permanent/full time) recruiting; in fact, in comparison to this time last year, there has been a 32% increase in the total number of direct hire positions being filled. “It is clear that the market for talent is extremely active and those clients that have a defined and efficient hiring process are the ones that are securing the best talent,” says Kent Elliott, a principal of RETS. “A perfect example of this is a CFO search that RETS completed in the Bay Area (May 2014). The client interviewed 5 candidates over a three day period, narrowed it down to two candidates, and then the selected candidate accepted the offer within a couple of days.”
RETS ended 2013 with a bang as it was one of their busiest years yet! Throughout the companies’ 12 year history RETS has consistently seen a decrease in searches starting after Thanksgiving and lasting through the end of the year. This was the first year that no drop-off in hiring was witnessed and business continued without skipping a beat. RETS ended 2013 at an all-time high and closed out the year with 434 searches compared to 360 in 2012…an increase of 21 percent! Hiring has continued to increase for the past two years and the company has tracked the uptick in searches dating back to April of 2011. This past year RETS concluded Q.4 13 with 91 searches, compared to 73 in Q.4 12, showing that the economy is continuing to improve.
DIRECT AND EXECUTIVE RECRUITING
Going into 2014 RETS has continued to see a trend in hiring financial analysts and VP level positions. In 2013 RETS completed 47 financial analyst searches, marking a 50 percent increase from 2012. RETS’ 2nd annual Financial Analyst Survey also concluded with twice the number of participants from 2012, giving the company a deeper understanding of the expectations financial analysts have for their careers. Along with financial analyst positions, RETS has also seen a rise in hiring VP level candidates in construction and development.