Commercial real estate firms may have to pay a pretty penny for top talent to fill roles in property management, landlord representation and other posts in 2024.
Demand for property management positions will remain robust in the coming year despite a slowdown in dealmaking, CoStar reports. To keep up with increased competition, employers project average merit increases of 4.9% this year, according to an annual survey commissioned by the Robert Charles Lesser & Co. consultancy and CEL Compensation Advisors.
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Companies surveyed are struggling to fill some positions with skilled talent — 85% of respondents said they were running into the issue. Still, roughly two-thirds of respondents said they plan to continue hiring despite strong headwinds like high interest rates and tough-to-navigate capital markets.
“The market for talent has been especially tight, both at the property level for our kind of onsite teams but then also at the corporate level,” RCLCO Managing Director Eric Willett told CoStar. “And even though the market has slowed down a bit in terms of the competition for labor, it certainly hasn't created real slack in the system.”
Companies have to weigh their needs to spend up for top talent while slashing costs in areas most directly impacted by a down market, such as development, acquisition and leasing activity. The survey’s findings align with federal government data, CoStar reports.
The number of people working as property, real estate and community association managers is projected to grow by 5% by 2032, faster than the 3% average growth rate for all occupations over the same period, according to the Bureau of Labor Statistics. The industry had about 430,000 workers in 2022, with a median annual pay of $60,670, per BLS.
CRE companies should expect to fork over pay increases above pre-pandemic levels for some time, Willet told CoStar.
“We're still operating in a bit of a new normal with respect to comp increases,” he told CoStar. “And until there's some sort of economic downturn or kind of economic event in that vein, we don't anticipate seeing it pull back.”
One way some smaller property management companies might look to cut costs is to ship certain tasks offshore.
One property management company, 33 Realty, has begun employing 25 workers out of its 150 total employees overseas in Mexico and the Philippines, principal Drew Millard said at a December Bisnow event. The offshore employees handle skilled roles such as accounts payable and receivable as well as simple tasks like calling utility companies to start and stop service.
“If you integrate them into your teams, they're very intelligent and very capable people and they can reduce costs greatly so that you can pay your U.S. resources more and have better customer service,” Millard said.
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