Nov 05 2008
Real Estate Employment- The Bottom Drops Out! Milan Properties Landlords Management Co.
Commercial real estate executives are bracing for the next landfall of the global financial crisis, cutting middle-management jobs and postponing hiring in late 2008, according to the 2008 SelectLeaders/Cornell Job Barometer, an annual assessment of the U.S. job market in real estate.
"It’s not looking good out there" said real estate executive search consultant, Anthony Lo Pinto, CEO, Equinox Partners and founder, SelectLeaders. "While hiring trends are down somewhat, the worst is yet to come. We won’t hit bottom, until the jobs disappear"
"Middle management jobs have been hit hardest with only minor impact thus far on executive level jobs, but probably not for long, with the deepening financial crisis likely to take a toll on the more senior ranks," Lo Pinto said.
The commercial real estate job market showed surprising resilience in the face of negative news across all sectors of the economy in the first half of 2008, yet has experienced a dramatic 46% decline in job postings since June, according to the study.
"The pace of the decline into August and September points to almost non-existent transaction activity and a shutdown of new development, that is finally showing up in the lack of job postings," said David Funk, Director of the Cornell University Program in Real Estate.
"In general there is a six to nine month lag between a fall in real estate market activity and resulting job layoffs and hiring freezes," said Anthony LoPinto, "On the other hand, with billions of dollars of commercial real estate loans maturing over the next 12 -36 months, there will be a growing demand for seasoned and proven talent that knows how to play the restructure game. It will be a mixed bag."
The Job Barometer forecasts pockets of opportunity in 2009.
- The apartment market was the one, and only sector that did not decline. In fact, nearly 40% of the total real estate jobs posted were in the multi family sector. In addition, there is an undeniable correlation between the states with the highest numbers of foreclosure filings, and states with the highest numbers of Multi-Family job postings, suggesting the end of the American dream of single family home ownership for many.
- The first and second city dominance of New York and Chicago metro areas are losing their hold to the economic strength of Texas oil and Florida’s senior citizens. Job losses in real estate finance and the homebuilding industry were disproportionately felt in New York and California respectively.
- The South is the place to be for the most hiring activity. For opportunity, look for jobs in accounting/controls, property management, and leasing.
- In 2008, 43% of all applicants sought commercial real estate jobs in New York with 74 resumes submitted for every posting, yet only 11% of all jobs are in New York - down precipitously from 18% the year before.. For the highest probability of success, applying for positions in the Midwest offers a much better chance of getting the job.
- Real estate’s talent gap is deepening as graduate students are already looking elsewhere as banking jobs dry up, historically the most attractive alternative for the best and the brightest looking to begin their careers. This will prove to be the singular most significant effect of the current crisis as it will impact our industry 10 and 20 years from now.
Experienced executives will also be in demand, according to Cornell’s Funk.
"The increasing need to squeeze every ounce of performance from commercial portfolios highlights the growing need for asset, portfolio, and property managers with a deep range of real estate experience coupled with sophisticated financial skills," Funk said.
Milan Properties Property Management Co. Los Angeles, CA 5369 W. Pico Blvd 2nd Floor 323-850-4900
