By Dennis Kaiser
Newport Beach, CA-based RETS Associates revealed the findings of its 5th Annual Survey of Real Estate Financial Analysts, in association with the Colvin Institute of Real Estate Development at the University of Maryland. More than 230 financial analysts with entry-level to 5-7 years of experience from across the nation were polled on their salary, education, willingness to relocate and more. Connect Media asked RETS’ Kent Elliott to share insights from this year’s survey, including what’s driving income disparity, as well as what elevates one position above another.
Q: Why is it that a master’s degree is valued so much more in the industry than a bachelor’s degree?
A: Young professionals that have gone back to earn a master’s degree are displaying a higher expectation on compensation packages compared to those with a bachelor’s degree. The CRE industry generally pays for experience more than it pays for education; however, we are in a very healthy cycle, and master’s graduates are negotiating salaries that justify the cost of earning an MBA or MRED. Augment that with employers doing well, making money and wanting to hire the best and the brightest young talent, and you find companies that are more willing to pay for talent now than they were in the Great Recession.
Q: What does the continued growth in compensation packages tell us about the market?
A: Broadly speaking, it continues to be a nice sign for the overall health of the market that these companies continue to hire for financial-analyst roles. Financial analysis is one entry point into CRE, and the continued demand, paired with salary growth, is giving us great confidence in the market. The demand for these positions is there to soak up the talent, which leaves very little left standing on the side of the road. We placed 42 financial analysts in 2015, and are on track to meet that by the end of 2016. This has been a great year for financial analysts, and we expect it to continue well into 2017.
Q: What are the factors causing candidates to focus more on growth opportunities when looking for a new position?
A: The CRE industry is strong and very active, especially in the development sector. Overall, the economy has stabilized, and we believe that financial analysts are comfortable in the industry for the long term. There’s strong hiring demand and a lot of opportunities across the West. Over the past few years, candidates have been able to roll from one position into the next because of a voracious hiring appetite – sometimes staying with a company for only nine months. This movement resulted in base salary growth for the majority of candidates.
Over the last year, we’ve seen the focus on growth potential greatly increase compared to a marginal increase in the focus on compensation packages, indicating a relative satisfaction with money earned. This means that financial analysts are almost equally driven by growth opportunities (#2 focus) as they are compensation (#1 focus). If a hiring company can offer both an increased base salary and promotion, there is a much higher likelihood that they can successfully secure the candidate – even if the candidate is content in his or her current position.