Closing The CRE Age Gap Will Require More Investment In Young Talent
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In the early 2000s, a change started to take place in commercial real estate, CBRE Executive Vice President and SIOR Global Vice President Patrick Sentner said.
The industry was getting older, and fewer young professionals were rising up to succeed the previous generation. Industry veterans needed to find new ways to engage students and pass on knowledge to the next generation of leaders. While industry gatekeepers looked to develop programs designed to attract new talent, the financial crisis in 2008 worsened the age gap, causing many young professionals to be laid off or have difficulty finding work. Few people were buying or selling real estate, and those young enough to pivot to new careers took that option.
“Many of those folks went in-house with corporate groups or left the industry entirely,” Sentner said. “In turn, this has created a bigger hole than you are finding in other industries.”
In the years after the Great Recession, CRE made a comeback, and assets like industrial properties are now thriving thanks to growing sectors like e-commerce. Jobs are also plentiful, with the Bureau of Labor Statistics predicting that real estate agent jobs will grow 6% from 2016 to 2026. But the industry still has an age gap, fueled by misinformation about what the industry offers young professionals and a lack of mentorship from senior brokers.
More CRE companies and professional organizations have realized the importance of engaging with students and prospective brokers regularly and as early as possible. An industry veteran with more than 20 years of experience, Sentner sees engaging young brokers as essential for the preservation of the industry and for improving how CRE professionals work with clients.
“People are realizing that you can serve your clients better than you have before when you bring some younger folks in,” Sentner said. “Once you get that, your company is going to be a step ahead of everybody else.”
Education And Internships
Attracting young professionals to the industry starts with educating students at the university level about the benefits of working in commercial real estate. While several universities offer real estate degrees, many don’t go into the nuances of asset classes and the differences between residential and commercial brokerages. Students might not be aware of the various careers that real estate offers. This could limit a pool of job applicants to those with a familiarity of the business gained through family or friends.
“We are trying to make sure that they are not sitting in their real estate courses saying, ‘Hey this is interesting, but I don’t want to be a residential broker, what else can I do with this major?’” Sentner said. “It's our job to reach out to the schools so that the students understand that this is an industry with job openings.”
SIOR has started supplementing this education by inviting college students to attend its conferences. The events not only help students learn more about the nuances of the industry but also network with leaders and gain valuable insights into working within commercial real estate. These are experiences that they would not necessarily receive in a classroom.
Careers Building Communities, of which SIOR is a partner, was formed to fill those gaps in a commercial real estate education and reach prospective industry professionals. CBC is a platform designed for students, educators and other individuals in the industry who want to explore CRE and learn more about what it takes to obtain education and employment within each sector. From the future of architecture to the growing need for affordable housing, the initiative connects the dots between professions in the industry and how they shape the world in which students live.
Using these resources, future industry leaders can discover what a construction manager does, or the day-to-day role of an industrial broker, for example.
Internships are another strategy for introducing students to the industry. Interns can experience firsthand the day-to-day responsibilities of brokerages while learning universal skills like office etiquette. These programs can also help identify potential high performers and fast-track them for a junior role at the company post-graduation. Many of those interns eventually end up working in the industry.
“If we have more people who are aware of the industry who in turn apply for internships, not only will we have more people to choose from, but also we will get better people in the industry,” Sentner said.
Building A Pipeline
At CBRE | Triad, market researcher Andrew Dixon is tasked with organizing and analyzing real estate information on the areas of Greensboro, Winston-Salem and High Point, North Carolina, known as the Piedmont Triad. A recent graduate of the University of Georgia, Dixon found an opportunity at CBRE to become familiar with the local market before taking on a more senior position.
“There are a lot of young people who want to get involved in commercial real estate but don’t know the entrance point, or they think there are too many barriers,” Dixon said.
Creating a more defined career pipeline for young professionals helps them acclimate to the challenges of being a commercial broker and learn from more senior team members with the safety net of a consistent salary, CBRE | Triad Senior Vice President and SIOR member David Hagan said. The typical period to close for a commercial real estate deal can range from three months to over a year. Throwing a recent graduate into a commission-only role with limited experience could quickly lead to frustration.
“There is a steep learning curve in the environment, so we’ve made a conscious decision in our North Carolina office that we are going to hire sharp up-and-comers and start them in a market research position,” Hagan said. “They start going to showings and presentation pitches with senior brokers and are allowed to learn the business in a year or two with the idea that they will eventually transition onto the brokerage side.”
By supporting the senior brokers with market analysis used for marketing, client needs and other brokerage activities, Dixon is gaining a foundation that will allow him to grow into the role and find continued challenges and job satisfaction.
Fostering Growth And Collaboration
Mentorship from senior brokers helps strengthen these initiatives. Programs like CBC connect students and young professionals to various professional organizations like SIOR, where they can network and learn from industry veterans.
Real estate companies have also started to emphasize teams that are a mix of junior and senior brokers, where the less-experienced brokers have the opportunity to learn from and help the senior brokers with their books of business.
“You need to, at a minimum, bring the person in on a team, even in a junior position, where they can learn from the other people on that team,” Sentner said. “Not just to be handed projects but go out and tour properties with the senior brokers.
By creating a support system for young professionals, companies increase the likelihood of success. Professional organizations have also taken on this responsibility. Hagan served on a SIOR task force to create a new initiative that offered such a support system.
SIOR launched a new Member Associate program to better engage with younger industry professionals who have yet to reach the levels of production required for SIOR designation. Prospective members can now begin the process for the SIOR designation after a year of active engagement in commercial real estate.
The biggest change has been the mentorship requirement. Member Associates must obtain a mentor who is an active member in their local SIOR chapter who will provide guidance and advice while the Member Associate is working toward earning the SIOR designation.
“We also implemented a mentor component to it because if you go back and look to when I was started, there was a lot of angst and fear of failure and that pressure has only increased,” Hagan said. “The mentor component will be one of the most important things we can have in encouraging young folks to continue pursuing a SIOR designation.”
Senior brokers might find that the benefits of collaborating with their younger colleagues apply to them, too. Creating spaces where multiple generations work together can lead to insights on everything from using data to more efficient business practices. CRE is notorious for its slow adoption of technology, and by bringing young professionals into the space, businesses can help discover these tools and improve efficiency. For Sentner, a Gen Xer, he learns something new every day by working with his partner, a “late” millennial and their recent young hire, a member of Generation Z.
Of course, this requires some senior brokers to check their egos at the door, he said. But it is necessary to keep the industry moving forward and inspiring the next generation of CRE leaders.
This feature was produced in collaboration between Bisnow Branded Content and SIOR. Bisnow news staff was not involved in the production of this content.