Commercial real estate compensation has entered a recalibration phase. After a decade defined by liquidity, appreciation, and consistent promote realization, sectors of the market began to reset in 2023 and shifted how CRE professionals evaluate total compensation — particularly as a function of the value and timing of promote.
Recent compensation research from NAIOP and RCLCO indicates that base salaries across CRE have grown only modestly, generally in the low- to mid-single digits. Even at the senior level, compensation growth has been uneven with firms prioritizing balance sheet stability over expanding fixed pay. As a result, base salary has regained importance as a stabilizing component of compensation — and it is no longer overshadowed by the wealth-building promote payouts as it was during the prior cycle.
This mirrors what we’re hearing directly from clients throughout the CRE industry: firms are protecting liquidity, managing overhead carefully, and recalibrating incentive expectations in light of slower transaction velocity.
We see a more meaningful shift in long-term incentives, particularly promote. Between 2023 and 2025, a significant number of assets originally underwritten for sale were expected to monetize. Instead, valuation compression across many sectors including office, industrial, life science, multifamily and more — led many companies to delay dispositions rather than transact at discounted pricing.
Accordingly, this altered executive compensation timing. In addition to being drastically reduced, promote that was modeled for realization during 2023–2025 has been deferred or has vanished altogether. For some, this is not a structural breakdown of promote — but a timing disruption. For others, it’s much worse. Their promote is just gone.
Looking forward, new promote structures may ultimately prove more valuable than late-cycle promote. As acquisition bases have reset and underwriting has become more conservative, deals originated in 2024–2026 may generate stronger long-term spreads if capital markets normalize. Lower entry pricing creates healthier future promote potential which proves beneficial for future compensation.
Some companies now anticipate that as valuations stabilize and debt markets improve, a backlog of delayed sales could create a wave of monetization beginning in 2026. If realized, this would compress several years of deferred liquidity into a shorter window and restore promote’s wealth-creation function. The question is whether promote still has the power to retain employees in the interim.
At the senior level, the answer is largely yes. Accrued but unrealized carry remains a meaningful retention anchor. Executives with significant promote participation remain economically aligned to stay with their firms through the recovery cycle. However, promote’s retention power is more limited for mid-level professionals without substantial legacy participation. In those cases, base salary stability and clearer annual incentive visibility have taken on greater importance — a trend RETS continues to observe in executive search conversations.
Within impacted sectors, promote has been most visibly impaired due to declining lease rates, above market investment basis, slower recovery timelines and uncertain exit pricing. To compensate, some firms have supplemented traditional carry with additional equity participation, milestone-based retention incentives, or revised promote structures to maintain alignment during extended hold periods.
Overall, the last few years have reinforced the phrase “cash is king,” with the CRE compensation mix becoming more balanced:
- Base salary provides stability.
- Annual bonuses reward operational performance.
- Promote remains the long-term golden parachute and wealth driver.
Promote has not lost its relevance. It has lost immediacy.
If capital markets normalize and deferred dispositions do accelerate in 2026, promote will likely reassert itself as a powerful executive incentive. Until then, its value lies in long-term alignment and recovery participation rather than predictable liquidity.
