Hiring Demand Surges
In Real-Estate Sectors

By PERRI CAPELL

From the National Business Employment Weekly

A booming real-estate market is creating a myriad of job opportunities for industry executives and managers in every nonresidential segment -- commercial, industrial, corporate and office. Industry conditions haven't been this favorable since the glory days of the mid-1980s and, for the first time since then, demand is excellent for candidates to fill "positions across the board and in every discipline," says David Saxner, president of DSA Inc., a Chicago recruiting firm.

The surging economy is encouraging companies to expand, creating an abundance of tenants seeking office space and prompting consumers to shop at more stores than ever. In the past two years, vacancy rates declined in every category except retail "power" and service centers. Vacancies for downtown class-A office space were at 12% in 1996, while suburban office class-A space vacancy rates were at 9%, reports New America International, a Hightstown, N.J., real-estate services company.

Also driving demand is a wave of industry mergers and the strong REIT market. Investment returns from REITs exceeded those of the Standard & Poor's 500 last year and are expected to remain high in 1997. As capital continues to roll in, REITs are seeking to grow and acquire more properties for their portfolios. In turn, they're hiring more sophisticated managers and executives to run operations. "The REIT business is obviously explosive at this point," says Mr. Saxner. "Their [hiring] demands are incredible."

By merging, real-estate companies increase the range of services they can offer and gain economies of scale that make them more profitable and competitive than smaller concerns. Executives speculate that the continuing shakeout in the industry will leave far fewer, much larger players to dominate the market.

"There is tremendous, continuing consolidation," says recruiter Christopher Sprehe, president of The Christopher Group in Raleigh, N.C. "The belief is that if there's enough square-footage under management, they can make the numbers work."

The mergers have caused layoffs at senior levels, but "a lot of people who are being spun out aren't your quality players," says Mr. Saxner. "When you get these larger entities, demands for performance get that much tougher. Some people drown from the increased responsibility, even though they were successful at a smaller company."

Finding the Best

Hiring is brisk for asset managers who can maintain or increase the value of property portfolios at all types of companies. Also in demand are property managers who can attract and service tenants in office, industrial and residential buildings, keeping occupancy rates high. Such managers will always be in demand no matter how large companies become, since every property must be well-managed, says Glenn Hoffman, senior vice president of Huntress Corp., a Kansas City, Mo., search firm.

Among property managers, positions are available at the single property, district, regional and corporate level, say recruiters. "The biggest hot button is people at the regional level with multi-state experience," says Mr. Sprehe. Although pay can run into the six figures, such managers have a high "burnout factor" because of constant travel, which raises turnover levels, he says.

At many organizations, savvy financial executives are needed to manage transactions, sell off portfolios, raise private equity and take companies public. For such directors and managing directors of capital markets, pay is generous, usually well over a half-million dollars annually in cash compensation and significantly more when stock options and other long-term incentives are included, says Mr. Saxner.

Earning Their Pay

But such managers earn their pay, since they're "working harder than ever," he says. "It's generally long hours, a lot of travel and a tremendous amount of focus. You could be working on 10 transactions and have 20 more the next day."

Necessary skills for success include leadership, along with the ability to prioritize and delegate. "Otherwise they can't get the jobs done, since they're so big," says Mr. Saxner. Also required is a strong commitment to career, even if it means personal sacrifice, due to the travel demands.

Banks, insurance companies, pension funds and other financial organizations are hiring real-estate appraisal, property and asset-management specialists to help them evaluate large portfolios of assets and turn them around for resale, says Mr. Sprehe. Such specialists earn up to $120,000 annually and receive bonuses ranging from 30% to 100% of base salary.

Decimated corporate real-estate departments also are bouncing back, say recruiters. Major chains and growing smaller companies are hiring junior site-selection professionals and real-estate managers who can wear several hats, says Mr. Sprehe.These companies may have outsourced their real-estate functions to cut costs and are now bringing them back in-house, although on a smaller scale than a decade ago.

Rougher in Retail

Hiring is weakest in the retail segment, given the oversupply of shopping-center space, which has forced landlords to concede free rent periods, short-term leases and build-out allowances, reports New America Network. Many malls are adding services, such as entertainment, health-care, play centers and interactive amusements, to generate traffic and sales.

"The buzzword is that we're 'overstored,' " says Mr. Hoffman. "This is the flattest of all the areas."

When evaluating candidates, employers place a premium on such certifications as the Certified Property Manager (CPM) or Certified Shopping Center Manager (CSM) bestowed by independent organizations. Having a CPM designation can raise base pay as much as 10%, says Mr. Hoffman.

"It isn't easy to get them," says Stan Stanton, president of Huntress Corp. "It's a real test of what you know about the industry."

Overall, though, competition is stiff for candidates, which has led to golden handcuffs, such as deferred bonuses, pay increases and other incentives. "This is the best economy and best hiring market I've ever seen," says Mr. Saxner. "There is tremendous competition for people in general."

-- Ms. Capell is managing editor of the National Business Employment Weekly.

Compensation for Real-Estate Professionals

Source: "Data Bank of Real-Estate Professionals," Huntress Corp., Kansas City, Mo.