The Job Barometer, a joint research effort between Cornell University's Baker Program in Real Estate and the SelectLeaders Real Estate Job Network, has tracked job opportunities and career trends in commercial real estate since 2006. In 2014, office and multifamily positions received more than their fair share of interest, while retail and single family openings were much less competitive. It also found that for 2014, applications to asset and portfolio management positions overshadowed their availability, yet property management and development roles were easier for applicants to attain.
"The dramatic increase in jobs, in all sectors and at all levels in 2014, is already bringing back qualified talent who could not wait for our industry to fully recover to take a job, and in the process leaving those jobs behind," said Susan Phillips, CEO of SelectLeaders. "Real estate is poised to be an employment engine in 2015."
The office sector was the most popular among applicants in 2014, 13.7% of all applications. Multifamily jobs came in second with 11.8%. Lagging behind in popularity, retail (6.6%), industrial (4.3%), and single family openings were nevertheless toward the top of the charts in terms of applications received.
At the other end of the spectrum, a number of socially significant areas of the real estate industry, in which there often exists an opportunity to "do well by doing good," received relatively few applications. The senior/congregate care category registered only 0.5% of all applications in 2014, while other healthcare real estate positions received 0.9%. Similarly small shares of the applicant pool were drawn to positions in green/sustainable real estate (0.8%), affordable housing (2.3%), and government-related real estate (2.4%). "The relatively low level of pursuit of sustainability and healthcare opportunities is surprising, and perhaps illustrates the allure of compensation packages in the high demand job functions," said David Funk, director of the Baker Program in Real Estate at Cornell University.
It is perhaps appropriate that multifamily draws such interest from job seekers, as it is also a prominent sector for job postings. The sector was the second-most prevalent for job opportunities and the third-highest category for applications. Positions in the office sector appeared to be very competitive in 2014, as they accounted for 7.1% of all opportunities, but 13.7% of applications. Similarly, interest in industrial openings appears to be outpacing demand for candidates in the sector, as it received 4.3% of applications but represented 2.4% of job postings. At the opposite end of the spectrum, retail openings were the most numerous of any sector in 2014, yet the sector ranked fifth for applications, with just 6.6%. The job market in the single-family sector was applicant-friendly as well, as it represented 9.3% of openings but only 4.1% of applications.
By job function, asset/portfolio management and acquisitions/dispositions openings are very competitive for applicants because of an imbalance between applications and open positions. Asset/portfolio management was the primary job function in 5.0% of job postings, but received more than double its share of applications (11.3%). Though not as competitive, acquisitions/dispositions openings received 6.7% of applications but represented only 4.1% of jobs posted. Development/project management positions, however, are much more favorable to the applicant, as they represented 12.9% of openings and only 7.4% of applications. The balance between employer and candidate is shifted even further in favor of the applicant for property management positions, as the function saw more than twice as strong a representation in postings than in applications (14.8% of openings and 6.2% of applications). Retail experience is invaluable for mixed-use developers, and any owner/manager/developer relies on property management. "Job seekers should think hard about how even a little experience in these areas will set them apart," added Phillips. "Since 2009, multi-skilled talent continues to be preferred."
The Cornell/SelectLeaders Job Barometer found that 2014 was the "best of times" for commercial real estate hiring in sharp contrast to the five year malaise of following the global financial crisis. The Job Barometer, a joint research effort between Cornell University's Baker Program in Real Estate and the SelectLeaders Real Estate Job Network, has tracked job opportunities and career trends in commercial real estate since 2006. It found that for 2014, the number of real estate opportunities increased by 23.2% over the 2013 total. 2014 was also the first year in which the number of job openings surpassed those available in 2007. "Job opportunities in commercial real estate are the best since we started tracking in 2006," said David Funk, Director of the Cornell University Baker Program in Real Estate, adding "certain geographies and industry sectors are stronger than others but overall it is a vibrant hiring environment." Retail and multifamily opportunities were the most prevalent for the fourth consecutive year, yet their relative strength was diluted as other areas of the industry began to catch up. Single-family housing continued its charge back into the hiring picture with a 53% increase in job postings over 2013, registering its third straight year of growth in opportunities for job seekers.
Largest Gains and Losses
Over the year, the biggest gains by sector were seen in multifamily job openings, which increased from 7.2% of all jobs analyzed in January 2014 to 12.7% in December. There were no jobs in the healthcare sector that were included in the study last January, but by December the field registered 3.0% of the Job Barometer. Conversely, the office sector declined from 16.3% in January 2014 to 7.8% in December, while the industrial sector fell from 4.8% to 0.6% of job postings over the same period. "Some of this may be cyclical, suggested Phillips. Multifamily and Office highs and lows in hiring were opposite but similar comparing the beginning of the year to the end. Also, Industrial was quite strong earlier in 2014."
What job functions were employers looking to fill?
Accounting/Controller, corporate real estate generalist, and development/project management roles saw large increases. Opportunities for accountants were less than 2% of jobs analyzed for the Job Barometer in January 2014, but had jumped to 7% in December. Corporate real estate generalists are also growing in demand, increasing from 2.4% to 7.8% in just 12 months. Postings for developer roles were strong at 18% in January, but nevertheless improved to 20.5% in December. Developer opportunities were tied with property management for the most prevalent category in the month of December, and were second only to property management for the year as a whole. Only openings for property managers, developers, and accountants had double-digit yearly figures. On the other hand, the interest in hiring financial analysts and acquisitions/dispositions professionals lagged, with each posting declines over the year. Jobs for financial analysts represented 12.1% of openings in January 2014 but had fallen to 4.8% in December while acquisitions/dispositions jobs similarly fell – from 7.2% of postings in January to 1.8% in December. "Jobs often follow the development cycle, Phillips added. Analysts and Associates were in high demand at the beginning of 2014. Now many projects are moving into development and construction. However the trend that for generalists, who can wear more than one hat, continues."
The Year Ahead: Strong Start to 2015
January 2015 was the best January on record for overall real estate job postings, 10.7% above the number of opportunities listed in January 2014, which was the previous high water mark for postings in that month. It is typical to see an uptick in hiring in January after the holiday season comes to an end, but the level of activity that has been seen in the first month of 2015 is an encouraging sign for the year to come. "People often wait for their bonus before making a move, so we expect January to be up, but the level of posting is a significant indicator for the year ahead," Susan Phillips said. This is supported by the fact that the investments, finance, and advisory services/consulting fields, which are typically associated with the potential for year-end bonuses, saw significant increases in hiring from December to January.
Though 2015 is only one month old, it is already off to a strong start for the retail sector, which compiled its best January on record in terms of prevalence of job openings. Retail (21.9% of all jobs postings analyzed in January) eclipsed both its prior record of 19.9% of openings (set in 2014), and its overall long-term average of 9.4%. It was by far the most common sector represented in January job opportunities. Multifamily openings have experienced year-to-year volatility for the month of January, and the news is mixed this year. The sector was the second-most represented in the Job Barometer for January, with 8.7% of openings, yet is well below its long-term average of 15.6%. Nevertheless, it began last year with 7.2% of jobs in January, yet finished in second place for the year with 11.1% of all openings. The industrial sector was also down from last January, with 4.8% in the first month of 2014 and 1.6% for the same period in 2015. It remains, however, near its long-term average of 1.8%.
By business field, firms engaged in advisory services/consulting and investments (asset management), showed gains over last January. The increase in openings with investments (asset management) firms was especially impressive, with an increase from 11.5% in January 2014 to 22.4% in January 2015. Advisory services/consulting firms gained relative strength with 9.6% of openings in January 2014 compared with 13.1% this January. Corporate real estate positions also made a major charge toward the top of the charts in January. These openings, which are defined as real estate positions within firms that are principally engaged in another business, accounted for 12.0% of openings in January, which was the best January on record for the category. This figure is compared with 8.4% last January and a 6.6% long-term average. It was the third-most prevalent category of firm in this January's Job Barometer.
By job function, development/project management and property management remained the highest ranked types of positions in January. Each had a 14.8% share of job postings. Last year at this time, openings for developers/project managers led the way with 18.0%, followed closely by property manager positions, with 16.9%. They were also the top two job functions for the entirety of 2014, with property management opportunities accounting for 14.8% of the Job Barometer, and development for 12.9%. Though both areas had lower representation this January than last January, they remain strong compared to their long-term averages. Development, at 14.8% was nearly three times as prevalent as its long-term average of 5.4%. Property management was only slightly below its long-term average of 15.2%, which does not appear to be cause for concern. It appears as though the decline in relative prevalence is due more to a stronger hiring picture for other job functions, as opposed to slowing in hiring for developers and property managers.
With its strong start to the year, it appears as though commercial real estate hiring is poised to continue the positive momentum that was built in 2014. With postings already outpacing what was seen over the same time period last year, there is no telling how strong the hiring picture could be this year as the industry continues to experience the "best of times."
Cornell/SelectLeaders Industry Employment Matrix: The Cornell/SelectLeaders Commercial Real Estate Industry Employment Matrix was developed for the Job Barometer as a comprehensive model for organizing jobs within the industry. Organizing jobs within a three-part matrix by sector, business field, and job function not only provides a structure for understanding employment, but also serves as a model for understanding the structure, activity and roles within the commercial real estate industry as a whole.
The Matrix begins with the identification of the 13 broad sectors in the commercial real estate industry. Sector refers to the broader area of the commercial real estate industry within which the position operates. It typically is defined by the product focus of the role.
Once the sector has been identified, the position is classified by its business field. The 14 business fields represent the company's focus, their main line of business. It does not reflect the specific job duties, rather the broader context within which the position is placed.
Job functions truly capture the specificity and diversity of activities and jobs within the industry: A total of 40 distinct commercial real estate job functions are identified. The job function reflects the fundamental job duties that make up a substantial portion of the employment position.
The Cornell/ SelectLeaders Commercial Real Estate Industry Employment Matrix thus provides a structure for understanding activity in the industry and establishes a model for appropriately coding and organizing jobs within the industry.
Baker Program in Real Estate: Cornell's Baker Program in Real Estate offers a comprehensive, professional graduate level curriculum that educates the next generation of real estate industry leaders taught by the largest on-campus real estate field faculty in the country. Cornell is also home to the Cornell Real Estate Council, an extensive network of industry leaders, the Cornell Real Estate Review, conferences, research and industry news, and more. Further information regarding the Cornell Program in Real Estate and the 2012 Cornell Real Estate Conference can be found at www.realestate.cornell.edu. Visit often to discover real estate at Cornell.
About SelectLeaders Real Estate Job Network: SelectLeaders powers the Career Centers for 12 premier industry Associations (whose members control or direct 90% of commercial real estate). Jobs are from all sectors - all levels - 19% pay over $150,000. SelectLeaders Job Network offers unequalled access to the Real Estate community. To learn more visit http://www.selectleaders.com/