Turns out commercial real estate is a hot and lucrative career for new MBAs. While that's good for them, it presents a challenge for commercial real estate executives, according to Stan Ross, chairman of the board of the University of Southern California's Lusk Center for Real Estate and co-author of the book, The Inside Track to Careers in Real Estate.
First, the data: A recent survey by SelectLeaders, an online job board for the commercial real estate industry, found that industry job postings increased 35% in the first quarter of 2007 and most employers and senior executives expect hiring and compensation to continue to increase at least through the remainder of 2007. Recent graduates of the Lusk Center, for example, had average salaries of $76,700 in 2006.
Ross says the high demand for talented people to work in commercial real estate is a byproduct of both the boom of the 2000s and the downturn of the early and mid-1990s. In the downturn, Ross says, many MBAs and other young professionals went into other industries, such as technology and high finance.
"Along the way, the commercial property industry lost almost an entire decade of talent," Ross says. "Just look around most any large real estate company today."
As a result, the industry is getting ready to hang a big Help Wanted poster, especially considering many companies nationwide are growing. Wall Street private equity firms are getting in on the good times, too, another signal of boom times. In promoting the book, Ross and Anthony LoPinto, chief executive officer of Equinox Partners, a New York City-based executive recruitment firm for the real estate industry, offer five tips for commercial real estate executives seeking new hires. Here's an overview of their suggestions:
• Focus your search inside the industry. With the exception of a few positions, such as chief financial officer, real estate functions are so industry-specific that it's best to recruit from other firms;
• Prioritize human resources. Make the head of the human resources department a strategic position. Commercial real estate firms have traditionally focused more on the transactions side — doing deals — than on managing human capital, say Ross and LoPinto. But having HR managers report directly to the chief executive and expanding the departments' responsibilities to include issues such as succession planning goes a long way in the hiring game;
• Seek out seasoned industry players. "More than most industries," LoPinto says, "real estate is entrepreneurially driven, provides opportunities to build wealth, and offers meaningful career opportunities."
• Build relationships with local colleges. Set up an intern program and regularly visit schools to meet with students and professors — and not just on career days. "Beyond internships, develop a plan for recruiting and bringing new graduates into your organization, training them, and promoting them," Ross says. "They are your future managers and successors, and you need to invest as much time and effort in them as in running your business."
• Don't settle for warm bodies or one's ability to simply fog a mirror. Adds LoPinto: "Don't fall prey to the temptation to fill positions with mediocre employees."