In The Changing World Of Commercial Real Estate, A Degree Is Becoming A Requirement
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For Casey Flannery, an administrative job out of college at a commercial real estate firm in Memphis, Tennessee, soon sparked an interest in trying her hand at brokerage.
But it was only after Flannery, 29, took that position that she realized the complexity of brokerage and wished she would have taken some finance and real estate courses when she was in college.
“If I was made aware that pursuing a real estate degree or classes was an option, I might have pursued it,” said Flannery, who has a bachelor’s degree in mass communications and a master’s degree in journalism.
“It would have helped me prepare,” she said.
For decades, most employees in certain commercial real estate sectors, especially in brokerage, development, research, analysis and finance, have found their way into the industry like Flannery, by manner of chance.
“Most people fall into it through family and friends,” Gibson said. “Historically, many young people have learned on the job. There was not a tailored career path.”
But times are changing and the demand for employees with commercial real estate degrees or a business degree with an emphasis on real estate is growing.
As the industry has evolved, so have its requirements.
“You don’t necessarily need a real estate degree,” Dallas-based Whitebox Real Estate President and Managing Director Grant Pruitt said. Pruitt was studying medicine before switching his major to real estate at SMU in the mid-2000s. His father and uncle are commercial real estate brokers.
“However, we look for someone who could be able to handle accounting and finance that are necessary for the commercial world,” Pruitt said. “It’s a steep learning curve if they didn’t have that background in accounting and financing.”
The barrier to entry for commercial real estate is about two inches from the floor, said Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University. Companies sometimes accept someone with a real estate license and a strong résumé, he said.
“You do not have to have a degree to get into this business,” Stapp said. “But the industry should want it. It increases the level of critical thinking skills necessary for the business to provide the benefits of the entire community.”
“It shows initiative, discipline and commitment," Turner said. "Clients are looking for people with financial acumen.”
Companies that are hiring out of school want people who are invested in real estate from day one, said Johnny Renaudo, chief operating officer for nationally recognized commercial real estate recruiting firm RealREPP.
"The moment that kid sets foot on campus, companies want them to study commercial real estate and do internships their sophomore to senior year at real estate companies,” he said.
In the last 15 years, universities offering real estate courses and degree programs have begun popping up, Gibson said, noting there are more than 100 universities offering a bachelor’s in real estate and about 65 graduate programs nationwide.
Portland State began offering a graduate certificate program in 2002. Eleven years later, the university started a master’s program and will launch an undergraduate program in the near future.
“In the last cycle, in the 2000s, before the recession, employers found an increase in need for specific commercial real estate education in finance and fundamentals,” Gibson said.
The University of Houston began offering a master’s degree in real estate in 2011 and a bachelor’s degree in 2016.
“There was a demand from the student population — both in the graduate and undergraduate level — and there’s been a lot of industry demand,” said Keith A. Richards, executive director of the real estate program at the University of Houston’s Bauer Real Estate Program. “We’re in Houston, it didn’t make sense for us not to have a real estate program.”
With programs starting to meet the demands of employers, the question remains whether there is demand from students.
But Are Students Interested?
James Kane is often surprised by the lack of interest from his fellow students about a possible career in commercial real estate.
The 21-year-old recently graduated with a real estate and international business degree from the University of Central Florida. He often speaks to young undergrads about pursuing a major in the university’s real estate program, but he always gets the same response: “Why don’t you just get your real estate license?” Kane said. Or “I don’t want to sell homes.”
Kane and Ross Wightman, a 24-year-old recent UCF real estate graduate, often find themselves fighting the real estate industry’s negative perception — that it is only for home transactions.
Since most people’s first experience with real estate is seeing a headshot photo of a real estate agent on a sign staked in front of a home for sale, Kane, Wightman and others have to educate them.
“I have to explain to them what commercial real estate is and the business of commercial real estate,” Kane said. Kane and Wightman said they are probably two of 40 or so students at UCF who majored in real estate among a 60,000 student body.
“It is relatively unknown,” Wightman said about the field among students. “There is a demand from employers for the real estate student but there is not a lot of demand for students to go into the real estate program. It’s not viewed as [being as] prestigious as finance or an accounting degree so people see it as a fallback degree.”
Tim Becker, the director of the Kelley A. Bergstrom Real Estate Center at the University of Florida, said it is a challenge to get students interested in real estate, which can jeopardize a program.
“Part of it is if you ask a normal person not in our industry, ‘What is a career path in real estate?' [they think] 'Oh, you’re going to be a Realtor.’ I think that’s the stigma that a lot of kids have when they come in. They think we’re training people to sell homes,” Becker said.
“Once they learn about what the industry is and what they can do in it, then they get excited about it,” he said. “But it’s still not going to be as popular as finance or the allure of going to Wall Street.”
As the membership chair for the local North Texas chapter of SIOR, the Society of Industrial and Office Realtors, Whitebox Real Estate’s Pruitt said the organization has been looking to give away a $12K one-year scholarship to a student interested in pursuing a career in commercial real estate brokerage.
Yet, for the past three years, the organization has yet to identify a college student for the scholarship, he said.
“We found that there’s just not a whole lot of students wanting to go into brokerage,” Pruitt said. “The academic world is not typically a proponent of teaching their students brokerage. They are pushing the finance or analyst positions.”
If universities are able to draw students into these degree programs, they have an opportunity to reshape the makeup of the industry.
Pursuing Diversity Through The New Generation
On his 19th birthday, Cristian Goodson received a gift from a girlfriend. It was a book on how to build a $100M real estate portfolio from the ground up.
The book changed his life, Goodson said. A few months later, he got his real estate license and finished his associate of arts degree at a local community college before transferring to the real estate education program at San Diego State University.
“That was it for me,” said Goodson, now a 23-year-old senior at SDSU who serves as an advisory and transactions intern at CBRE. He is also the executive director of sponsorship at the Real Estate Society of San Diego State University.
Goodson, who is African-American and Hispanic, is part of the new generation of students pursuing a commercial real estate degree. He is a minority, educated and hungry to network. In May, he was one of six college students nationwide to receive the NAIOP diversity student scholarship.
“I want to make a difference,” Goodson said. “We can repurpose property for the benefit of the human species. If you want to make a lasting change, this is it.”
Portland State’s Gibson said with more commercial firms now looking for a real estate-specific educated workforce, colleges need to step up and recruit diverse undergrads.
“When you think about commercial real estate, it has always been a white male-dominated industry,” Gibson said. “I think before a lot of it is the industry hired their friends and family. How do you change that diversity if you continue hiring your friends and family?
“Universities could be a big key in real estate education,” she said.
Stapp of Arizona State said trying to recruit a diverse student body to the real estate program is much easier said than done. Legally, universities are prohibited from marketing the program to one ethnic group or gender over another. Instead, ASU partners with CREW or local ethnic organizations to get the word out to the student body.
“We establish good collaborative partnerships with groups so they could provide awareness for our student base,” Stapp said.
But he said more needs to be done.
Flannery, the broker from Memphis, said colleges need to do more to recruit women and minorities. As the only woman in her office, she has joined CREW and works to mentor other young women about the industry.
Though she may not have pursued commercial real estate if she had known about it in college, it would have been great if she was aware of the option.
“I didn’t even know what it was or it being an option,” she said. “I think a lot of people don’t realize it’s a big business. You drive by retail spaces, office buildings and don’t process how those buildings came to be or who owns them or even how goods are transported from a warehouse to your homes.”