Assessment of Commercial Real Estate Job Market Gives Cause for Celebration as Well as Concern for the Economy
War for top real estate Talent Rages in Superheated Market,
NEW YORK CITY, May 21, 2007 - Results from a Real Estate Job report, compiled by an online job board for the commercial real estate industry, in conjunction with Cornell University's Program in Real Estate, forecast solid hiring and compensation growth, but also reveal worrisome trends especially in the residential sector.
According to the report, hiring and compensation provide a barometer for trends in the commercial real estate industry, as well as for the U.S. economic outlook.
Among the notable findings are:
t Job postings for the commercial real estate industry have soared by 35 percent during the first quarter of 2007.
t 66 percent of senior executives expect compensation to increase in the next six months, and over 60 percent of industry employers expect to increase hiring over the same period.
t The Southeast region, led by the Atlanta and Charlotte markets, had the fastest job growth of any region, experiencing a 60 percent increase in job postings in the first quarter, and, surprisingly, the Midwest region, led by the Chicago market, experienced a 43 percent increase in job postings, making it second in job growth nationally.
t New York and California are the hottest areas for real estate finance jobs, but New York attracts twice as many applicants as California, which has led to a talent shortage on the West Coast.
t Despite the fact that demand is growing for asset and property managers, the majority of job candidates seek the highly desirable "deal-making" positions that involve acquisitions, development, capital raising and investment banking.
"Candidates should pay close attention to regional and sector opportunities," advises Dr. Funk, Director of Cornell University's Program in Real Estate. "If the candidates are willing to pursue prospects in other states and sectors, they will broaden their options as well as their resumes, and with multi-sector jobs accounting for 46 percent of all postings nationwide, cross-sector experience makes a candidate extremely appealing."
There are several reasons why the industry is currently experiencing a shortage of talent. One of the major reasons is 'The Brain Drain,' or lack of up-and-coming talent caused by few entering the real estate industry during the bust of the 90's, coupled with the baby boomers exiting the business and heading to the beach. Also, there has been an enormous influx of capital into real estate, fueling tremendous growth, and a corresponding demand for talent.
Dr. Funk adds, "With more companies going public, and greater institutionalization in the industry, the bar has been raised on the caliber and qualifications for real estate job candidates."
Notwithstanding the residential (new homes and master planned communities) sector's less optimistic viewpoint, which the study concludes is sector-specific, the industry is quite optimistic.
"The question remains as to whether the hiring and compensation bubble will get so big that it will burst, or if the current optimism is indicative of a lot more runway in the current economy," notes Dr. Funk.
This article utilized data collected from three sources: a comprehensive sample from 8 primary job boards of all online job postings for professional commercial real estate positions, surveys among senior C-Suite and middle management in commercial real estate companies, and 74,853 resumes from job applicants submitted to real estate job posting sites and 11 real estate professional organization career centers.