The hiring market for commercial real estate professionals is red hot again following last year’s deep freeze, when the pandemic brought executive moves to an abrupt halt.
The demand for talent spans ranks and expertise, from senior to mid-level roles. Pros with experience in popular asset classes such as industrial and life-science properties and specialties like distressed investing are particularly sought after
Nearly all activity came to a standstill last March when quarantine and social distancing measures meant to curb the spread of the coronavirus tempered the appetite for new hires and complicated ongoing searches. “The pandemic created a disturbing but temporary pause on activity,” said Deb Barbanel, who leads the global real estate practice at Russell Reynolds Associates.
The market started to thaw in the fall, and by January had picked up substantially. Recruiters are reporting a rebound in assignments that matches, and in some cases even exceeds, pre-pandemic levels. Real Estate Alert’s annual survey identified 55 recruiters active in the field. “This year … we are probably ahead of 2019 mandates by 30%. We are seeing globally in the real estate sector and beyond unprecedented demand for executives across a very broad range of firms,” Barbanel said.
The resurgence corresponds with an uptick in capital flowing into the sector — a driving force in hiring. “At the end of 2020, you saw more of a light at the end of the tunnel in terms of what Covid was and wasn’t … and the flow of capital started increasing and deals started increasing,” said Steven Littman, president and managing partner at Rhodes Associates.
While demand has returned, the requirements for those deploying capital have shifted. Investment shops are focused on hot sectors such as warehouses and life-science properties, and some are targeting distressed situations. “The world is in a different place,” Littman said.
Particularly notable is an increase in senior-level and leader- ship roles. This is driven by many factors, said Anthony LoPinto, managing director and global sector leader for real estate at Korn Ferry. More senior-level executives are choosing to retire early or go in new directions, such as board-director roles, he said.
In other cases, firms are pursuing new initiatives and changing their structures, and that requires new and different leadership. Boards also are more focused on succession planning. “It’s not one trend, it’s a variety of trends,” LoPinto said. “That adds up to a significant increase in strategic searches.”
Firms are taking the long view when it comes to hiring at all levels. “This will be the next cycle. What is the skill set we really need within these functions going forward,” said Gemma Burgess, president of Ferguson Partners. “They are thinking through roles to be more strategic and even for traditional roles to be more innovative.”
The demand also is driven by growth, as more firms look to expand or add product lines. “I think businesses are looking to diversify themselves, whether it’s asset class or geography,” said Jennifer Novack, a managing director and co-head of global real estate at Sheffield Haworth. “This may be a time when [firms] are open to taking risk and trying new things, making bets on where things are heading.”
At the same time, candidates are more willing to make a move. “We’ve seen candidates letting go of the risk aversion many had earlier in the pandemic and actively seeking new opportunities,” said Emily Von Kohorn, also a managing director and co-head of real estate at Sheffield Haworth.
Recruiting itself also has changed. Adaptations made during the pandemic to avoid travel and maintain social-distancing protocols are likely to be permanent. “There has been a fundamental shift in the recruitment process. The incorporation of video conferencing is here to stay on a forward-going basis,” said Kent Elliott, a principal at RETS Associates. Face-to-face meetings likely would come later when a handful of finalists remain, he added.
Recruiters said video conferencing early in the process allows them to vet a larger number of candidates, including those who aren’t looking to change jobs. “Passive candidates are more apt to take the interview because it takes less effort and commitment on their end,” said Chris Papa, managing partner at Jackson Lucas.
Also changing are the terms employers need to offer prospective hires. Remote working, which became the norm over the past year, isn’t likely to go away. “Five days a week at home or the office … neither one of those is the right program. Both sides are going to have to give a little bit,” said Elliott of RETS. His advice to firms looking to hire is to be flexible, “or you won’t be able to attract the right talent.”
For those positions that can be fully remote, firms are starting to rethink compensation for hires who plan to live in less expensive areas. “There are conversations being had,” said Gregory Shultz, founder and managing partner at Newbridge Search. “How do you peg compensation when it is not tied to geography?”
Kent Elliot is a Principal at RETS Associates, 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 industry leaders find powerful executive positions, while also helping global, national, and regional real estate companies strategically recruit and hire both permanent and interim employees. For more information, contact email@example.com