Top 5 CRE Career Trends for 2019
Career trends in commercial real estate are shifting in 2019. And as the winds of change blow in, professionals in the CRE market must take note of developing patterns and new opportunities in order to stay competitive. New data indicates movement in the US economy and in hiring practices for real estate firms. Here’s what will be different and how to stay ahead of the curve.
CRE Career Trends: Cautious But Optimistic
Last month, Select Leaders, one of the country’s premier networking associations within the real estate industry, released their 2018 year-end survey results. The organization polled scores of real estate professionals – from HR executives to top management to average employees – to identify developing CRE career trends for the new year.
Simultaneously, the National Multifamily Housing Council (NMHC) in partnership with Willis Towers Watson prepared their own “2018 National Multifamily Industry Compensation Survey Report.” This report compiled responses from thousands of real estate professionals from 91 organizations across the US to identify compensation and employment trends for 2019.
The responses and data reported by both groups point to a cautious attitude about the real estate market. While most respondents believe 2019 will be a good year overall, there are several challenges on the horizon to be aware of. The market is changing. But with this change comes a mixed bag of potential hazards as well as significant opportunities.
The State of the Market, 2019
1. Opportunity Zones Investment
The recent Trump tax reform bill created an Opportunity Zones program. The program identifies low-income areas in need of investment and incentivizes investors who re-invest capital gains into building up these areas. These zones pose a substantial opportunity for real estate investment, and US Treasury Secretary Mnuchin predicted $100 billion will be funneled into these properties before long.
2. Abundance of Capital
Many survey respondents voiced concern with an abundance of capital in the CRE market. In 2019, this may likely have the effect of shrinking margins and increasing high-risk investments, weeding out inexperienced CRE professionals and rewarding more stable behavior.
3. Stable but Slowing Growth
The responses indicated increasing concerns that the pace of growth will slow in the real estate market. Prices and demand remain high, but some believe rising interest rates and geopolitical happenings may slow down the bull market. However, optimism remains high as compensation continues to climb moderately. Last year, approximately 65% of respondents reported an increase in compensation. About two thirds reported receiving a bonus. On average, real estate executives saw a 3.5% increase in pay, and companies are budgeting another 3.5% increase for 2019.
4. Shortage in Skilled Talent
A consistent CRE career trend for 2019 is opportunities for qualified talent. 58% of the Select Leaders survey respondents reported difficulty finding qualified professionals. 65% reported not taking their full vacation last year, and a possible explanation is the increased burden on current CRE professionals. Some report having to do the work of two due to the talent shortage. This affords both new and established talent opportunity to find exciting new positions.
5. Data Science Climbing
Data science is the next big CRE career trend. Leveraging data and predictive technology is changing the way CRE companies build, plan, and market. And this new wave is sure to be definitive for the 2019 market. This relatively unexplored niche poses a unique opportunity for those entering the new and changing world of commercial real estate in the next year.
Overall, the outlook seems positive for developing CRE career trends this year. Compensation is up, new areas of specialization are arising, and truly gifted RE professionals have room to grow. However, this optimism should be tempered by the knowledge that market increases will likely slow down in the next year or two. Now is not the time for overly risky investments, but for steady and sensible growth.
Learn more about Opportunity Zones at NAIOP San Diego's April Educational Breakfast