Annual Survey: Real Estate Financial Analyst Compensation Holds Steady During COVID-19; Specialized Degrees Linked to Highest Salary Jumps
December 1, 2020
Average compensation for today’s commercial real estate financial analysts has remained essentially unchanged from the previous year, except for those analysts with specialized degrees, according to new data from leading real estate executive search firm RETS Associates.
The firm, which has successfully placed more than 3,000 candidates in key real estate positions, has announced the results of its annual Financial Analyst Survey, revealing a slight decrease in total average compensation from $139,407 to $138,941, which is considered to be statistically insignificant. While average bonuses fell from $30,748 to $29,947, a 2.6% decrease – a fact that could account for the scant decline in total compensation – salaries actually rose for most financial analyst categories even during the global health and economic crisis.
This year’s survey revealed a 16.3% increase in compensation for those with an MRED or MSRE degree, while those with a bachelor’s degree saw a 0.7% rise in total compensation over the previous year. Those respondents holding an MBA or master’s degree, on the other hand, saw a decrease in compensation of -3.6%.
“Insight into financial analysts’ compensation trends is indicative of overall trends in the CRE industry as a whole, and therefore very compelling,” says Jana Turner, Principal of RETS Associates. “Companies are seeking employees with specialized degrees in order to gain an edge in a highly competitive market – one where hiring and retaining top talent are paramount.”
Money wasn’t the only consideration for candidates considering a move. Respondents ranked growth potential as the second most important factor influencing their decision on whether or not to accept a job offer. Meanwhile, flex time, job title, and the firm’s brand name were the least important factors in weighing a career change.
“For candidates embarking on a career in the real estate industry, the financial analyst position is often the starting point; it makes sense that in addition to appropriate compensation, these candidates are also seeking a path to growth in the field,” says RETS’ Principal Kent Elliott.
Top-line results from RETS’ 2020 Survey, which were analyzed by Chief Economist/Strategies/Researcher Jeffrey Havsy of Eigen 10 Advisors, include:
- Base Salaries Increase 0.3% Year-Over-Year
- Base salaries increased 0.3%, rising from $108,659 in 2019 to $108,994 in 2020. This increase is not as high as the year-over-year 7.2% increase in base salaries experienced between 2018 and 2019, largely due to the economic disruption caused by COVID-19.
- Base salaries continue to account for 78% of total compensation, consistent with 2019 data. Overall, average total compensation decreased 0.3% from $139,407 to $138,941 due to the average bonus falling from $30,748 to $29,947, a 2.6% decrease.
Specialized Degrees Support a 16.3% Year-Over-Year Increase
- While education levels support higher salary growth, specific degrees garnered the strongest increases. Those with an MRED or MSRE degree saw average compensation increases of 16.3% to $163,494, while those with a bachelor’s degree received an average increase of 0.7% to $132,756. An MBA or other master’s degree was worth less than an MRED or MSRE, garnering a 3.6% decrease to $154,265.
- This year’s survey saw a rise in the number of respondents with no higher than a bachelor’s degree, from 159 in 2019 to 179 in 2020. This difference in survey respondents may account for the slight decline in total average compensation as well as the decrease in master’s degree compensation.
Compensation Growth Highest Among Senior Associates
- While most experience categories saw an increase in compensation – similar to 2019 – the biggest jump was for senior associates, whose compensation rose 5.0% to $174,295. This group also experienced the largest increase in salary in 2019; in fact, senior associate compensation has risen 23% over the past two years.
- Financial analysts with 0-2 years’ experience saw a rise in compensation of 4.4% to $86,881, a 12% increase over the past two years.
- Conversely – and surprisingly – associate compensation fell 4.7% from $140,370 to $133,726. This decrease could be attributed to location, as the number of respondents from the Northeast (where salaries are typically higher than many other regions) was down compared to 2019.
Compensation and Growth Potential Still Lead Candidate Decisions
- Similar to 2019, compensation was the most important factor for survey respondents when considering a job offer, followed closely by growth potential and the nature of the work.
- Flex time, job title, and brand name of the firm were least important to respondents.
- In the last year, less than half (49%) of respondents pursued a new job, either with their current employer or a new one, a slight decrease from 2019 when 51% looked around.
- Two-thirds of respondents are open to relocating for a new job.
- Over 60% of respondents have been with their firm 1-3 years, and an additional 20% had been at their current employer for less than a year.
RETS Associates is one of the nation’s leading real estate executive search firms, specializing in connecting today’s companies with valuable talent to deliver long-term profitability. With a proprietary database of more than 50,000 experienced candidates, RETS helps global, national, and regional real estate and construction companies strategically recruit and hire both permanent and interim employees. Learn more at www.retsusa.com.