Where Jobs Are Headed

Where You Can Find Today's--and Tomorrow's--Real Estate Jobs.

After hitting the shoals in the early 1990s, real estate employment is charting a new course through deeper but still uncertain waters. While a stronger economy has bolstered the job market as a whole, some employment trends of the early 1990s are permanently altering the shape of the real estate profession.

In broad strokes, today's market forces and new technologies are leading away from corporate real estate specialists, developers, and mid-sized firms. Instead, today's market favors in-house generalists, financial experts, and entrepreneurial ventures. The construction industry, which lost 192,000 jobs between 1988 and 1992, has begun rebuilding-but slowly. Commercial developers and investors can find hope if they look down the road to 1997-2000, when non-residential construction is expected to revive. Overall, Hugh Kelly of Landauer Associates in New York predicts the real estate industry as a whole will grow by 2 to 3 percent a year. (See "What's Hot and What's Not," page 26).

Securitization, Brokerage on the Rise
Perhaps in response to the financing woes resulting from, or contributing to, the last real estate collapse, new jobs are springing up on the securitization side of the commercial sector, says J. Thomas Black, urban development economist at the Urban Land Institute. "Investment houses will need more security analysts who specialize in real estate, and real estate companies will need specialists in financial markets," he adds.

Brokerage also is presenting new employment opportunities as several large brokerage companies well established in major cities are expanding into secondary markets, according to Stu Stanton, president of Huntress Real Estate Executive Search in Kansas City, Missouri. Conversely, firms that once focused on small markets are going national, reducing the significance of geographic boundaries, adds Jay Lucas, CCIM, president of the Commercial Investment Real Estate Institute and the Harry B. Lucas Company in Dallas.

Up the Down Corporation
For real estate professionals employed by corporations-or once employed by corporations-downsizing has proven as easy as falling off a cliff. As the saying goes, it isn't the fall that hurts; it's the landing. But has downsizing in corporate real estate departments actually hit bottom?

Yes, says Steve Moore, CCIM, manager of real estate for Union Carbide Corporation, in Southbury, Connecticut. "Several companies are starting to add to their real estate departments. I got calls in January from two headhunters looking for recommendations, and since then I have seen ads for other jobs with companies. Right now I can't think of a lot of people out of work, and I'm glad that's the case."

"We're reaching the tail end of the outsourcing trend. Everyone has done it," adds Rick Friedman, real estate director for Tribune Properties, Incorporated, in Chicago. "But the trend won't reverse. Companies will decide they only need a small number of people, and those people will concentrate on strategic activities. The execution of strategy will be performed through outside service providers." This new paradigm is standard practice at Tribune Properties, he adds, which has always maintained a corporate real estate department of two or three people supported by outside consultants.

No, the downsizing cycle has not ended, counters Jerry Anderson, CCIM, a real estate consultant based in Canton, Ohio, who works with corporate clients and real estate brokerage firms. "Not long ago I met with a company that has 27 people in the real estate department. The company is interviewing real estate firms because of a mandate to take its U.S. staff from 27 to nine people."

"Downsizing is still the buzzword of the '90s," Stanton concludes. "Companies are trying to do more with fewer people."

Survival Skills
Surviving in the downsized corporate jungle takes different skills than those needed in the fat years of the 1980s. Managing today's lean-and-mean corporate real estate department requires generalists who combine a broad range of business, interpersonal, and financial skills with a customer-service focus.

To act as effective consultants on the corporate team, these professionals need business savvy that extends outside the real estate field to encompass all of the company's business interests, Friedman says. In his case, he must understand the real estate needs of the 15 or more types of businesses represented in the Tribune family.

"We have businesses all over the country," Friedman says, "and we can't know all the markets in-house. We turn to consultants for that."

An attorney, Moore drafts his own documents; however, he taps outside consultants, including surveyors, space planners, architects, attorneys, and brokers. Many of these brokers are expanding their services to fill the gaps left by corporate staff reductions.

To manage the process, "You need a broad array of skills," Moore says. "You have to do it all, from start to finish. You can't just direct others to do it." Even if they use outside brokers, corporate real estate executives consider leasing and negotiating the two most important aspects of their job. To satisfy the needs of the internal customers, the corporate real estate executive must lease the best space available for the least amount of money. Some are reluctant to leave the deal-driving to the broker.

"I did training for KFC," Anderson says. "In the manual they have a company mandate: Once the broker introduces you to the principal, you deal with the principal. Don't trust the broker's skills."

Technically Speaking
"World Wide Web," Lucas muses. "How often did you hear about it a year ago? Three months ago? Now everybody's getting into it."

Fortunately for the career aspirations of non-techies, recent and upcoming developments in high-tech tools are making cyberspace a friendlier and more efficient place to do business, according to Jack Peckham III, CCIM, president of the Peckham Boston Advisory Company in Boston, who has written about computers in the real estate industry since 1968.

"Real estate people hate to hit a keyboard," he says. "Now most technology requires typing. The advent of voice technology and voice recognition will change that." Three years from now, he predicts, voice technology will enable residential salespeople to pick up a phone, tell the computer the features and amenities a client wants, and receive a printout of matching properties.

Virtual reality will add a new level, he continues. Prospective home buyers will call up a computerized walk-through that lets them preview properties room by room with a click of the mouse. A computer board, already in existence, will simulate enticing odors such as the homey scent of turkey in the oven and a fire in the fireplace. Even business cards will carry memory chips that, when scanned, will allow clients to see all of the available properties without leaving home. Although virtual reality may have the most impact first in the residential market, eventually it will have commercial market applications, particularly in leasing and sales.

These technological changes will have a profound impact on real estate employment over the next 25 years, Peckham projects. Salespeople will give way to information managers who supply data on properties and to specialists who complete transactions. At the same time the sale cycle will shrink from listing to signing, and in turn, the number of people employed in real estate will drop. By the year 2020, the industry will employ only 20 percent of the people now working in commercial real estate, and perhaps a third of the force on the residential side.

A Word to the Wise
If the prospect seems daunting, perhaps it should. "People in real estate should look over their left shoulder at the 23-year-old kids who understand technology coming up behind them," Peckham warns. "You have to stay abreast of the changes in technology. You don't have to understand how it works, just what it does."

"The learning curve is more important than ever," says Bill Mohr, CCIM, president and CEO of Mohr Financial in Oakland, California. "You have to rise up the curve quickly or fall off. The real estate industry is primarily information processing. Don't let your technology get old."

To keep up, let alone get ahead, real estate professionals must learn-and keep learning-faster than their competition, Lucas adds. He advises participating in professional organizations and taking courses to keep abreast of changes in the industry.

Nor does success depend on technology alone. "If you have people skills and technical skills, you'll do great," Mohr says. "If you have only people skills, you'll do okay. If you have only technical skills-no."

A Rush of Gazelles
In addition to new skills and technology, real estate professionals must be aware of new business trends as well. "The unemployment rate is very low," says Lucas. "How can this be when companies are jettisoning thousands of people? Entrepreneurial growth. New businesses are doing well and growing."

Between the downsizing of corporate America and the ready availability of advanced technology, small, "gazelle" companies are leaping to the forefront of the industry. These entrepreneurial enterprises now perform most of the same services as the industry giants, without the high overhead costs of large departments and expansive offices.

The gazelles sprang from the real estate cycle of the 1980s and early 1990s, Moore says. During the 1980s, corporate real estate was growing and growing more professional. Then in the early 1990s as the market suddenly shrank, companies found themselves in a quandary: They wanted the same high quality, but at a lower cost. Outsourcing provided the solution, and the gazelle companies took off running.

For these small, entrepreneurial organizations, Mohr says, the secret of success is identifying a niche business-a service that other companies would hesitate to hire a full-time employee to perform, a certain geographic area, or a product line.

As they carve out a more substantial slice of the market, these small, independent firms have changed the way the real estate professionals operate. Throughout the industry, consultants are beginning to play an integral role on the client's team. Rather than handling a single transaction and moving on, they work in an ongoing relationship with the internal staff.

"Companies are not looking for a consultant to do one deal and move on. They want to have someone handle all their real estate needs," Lucas says. "We're talking about an enormous amount of real estate."

A small or mid-size consulting firm might manage only one major client. In such a close relationship, the consultant ultimately develops a comprehensive understanding of the client's culture, goals, strategies, and needs, functioning as a "virtual" corporate real estate department, he adds.

Virtual organizations in general are reshaping the real estate scene. Mohr reports that he has started several virtual companies this year, putting together teams just as a Hollywood producer might assemble the director, writer, cast, and crew for a movie. He and his associates, all CCIMs, occasionally fly to a mutually convenient location, rent a suite, and hold a face-to-face meeting. The rest of the time they communicate by e-mail.

Finding a group of like-minded colleagues means keeping up the connections with a critical mass of people. In the 1980s, the industry regarded networking as a national pastime; in the 1990s, the real estate profession has moved on to the era of the strategic alliance, he says.

The Land of the Giants
Coinciding with the rush of gazelles and the ascent of alliances is a shift toward the growth of industry conglomerates at the expense of mid-size firms.

"The large real estate firms are getting even larger, so they can do everything under one roof," Lucas says. "They are buying companies, merging companies, reaching for critical mass" with the aim of offering corporate clients one-stop shopping. Conversely, many mid-size companies are shrinking into smaller shops offering the samewide range of services by using outside consultants. "Clients are looking for generalists who have access to specialists. You can't be a middle-of-the-road company. The overhead is too high to compete with independent specialists," Lucas says.

Sailing into the Future
Mohr races sailboats, and he knows how to play the wind shifts. Rather than fighting them, he uses their power to breeze past his competition. "The real world is full of wind shifts," he says. "You have to recognize that those shifts, those paradigm changes, offer an opportunity to move to the front of the pack." In real estate, those who seize the breeze and chart their course will go where the jobs are heading.

Patricia K. Lemmons

Patricia K. Lemmons is a real estate and public relations writer based in Chicago. Letty Bierschenk, CCIM, above left, began her career in commercial real estate 23 years ago at the Los Angeles office of Coldwell Banker Commercial. There, she rose to become the only woman vice president in commercial brokerage and manager of the Investment Marketing Services Division. After 16 years with the company, she joined Grubb & Ellis as an investment specialist, and was named a vice president in November 1991. In December 1993, she left the firm to direct the Consultation Services Division of The Bierschenk Group, owned by her two sons. She served as president of the Greater Southern California CCIM Chapter in 1991. Additionally, she belongs to the National Association of REALTORS® and is a charter member of Women in Commercial Real Estate. She holds a bachelor\'s degree from the University of California at Los Angeles and a master\'s degree in federal taxation from Northrop University School of Law. B.K. Allen, CCIM, GRI, above center, first vice president and 1996 president elect of the Commercial Investment Real Estate Institute, serves as general partner of B.K. Allen Real Estate Ltd. of Vienna, Virginia. She oversees eight partnerships involving land development and construction of commercial and industrial warehousing, office buildings, and retail. Previously, she acted as sales manager for Ryan Lorey & Associates Inc., and as director of commercial development for Wills Investments Inc., both in Virginia. She entered the commercial real estate field in 1977 as owner and manager of Allen/Fredlock Properties in West Virginia. She is past president of the Virginia and West Virginia CCIM chapters. Her professional memberships include the Mid-Atlantic Real Estate Marketing Association as well as the local, state, and national REALTORS® associations. Allen graduated from Kentucky Wesleyan College and continued her studies at West Virginia University. Cynthia Shelton, CCIM, GRI, above right, heads Tampa, Florida-based CS Realty, acting as a consultant to Kinder Care in the development of work-place child-care centers in a 12-state region. Shelton has served as president of the Tampa Board of REALTORS®, chairwoman of admissions for the Florida Association of REALTORS®, a director of the National Association of REALTORS® and its chairwoman of research, vice president of the Florida CCIM chapter, and, most recently, a member of CIREI\'s Governing Council. Patricia Pollitt, CCIM, far left, with 15 years in the real estate profession, is president of Realty Investments Corp. in Red Deer, Alberta, Canada. Since its founding in 1983, the full-service commercial investment real estate company has specialized in property marketing, management, and acquisition. In 1993 the firm expanded to include mortgage brokerage. A member of CIREI\'s Designation Promotion Committee, Pollitt also has served for eight years as a director of the Red Deer and District Real Estate Board, and as the board\'s president in 1991. Additionally, she chaired CI Canada for the 85,000-member Canadian Real Estate Association in 1992. Barbara Monahan, CCIM, CRB, GRI, middle left, joined McCulley Management and Realty, Essex, Connecticut, in 1983 as a residential manager, rose to vice president, and was named partner and executive vice president in 1990. Monahan teaches real estate licensing and law at Middlesex Community College. On the national level, her professional activities include chairing CIREI\'s Education Promotion Committee and serving on its Education Steering and Designation committees. She also serves as president of the Connecticut CCIM chapter. Her educational background also includes studies at the University of Maryland in Munich, Germany, and the Universaire de Sorbonne in Paris.Deborah S. Skeans, CCIM, CRS, MAI, middle right, member of a real estate family, entered the field in 1971 and now serves as vice president of Imperial Real Estate, Allentown, Pennsylvania. Her experience spans brokerage, appraisal, and court testimony on issues including tax assessment appeals. Skeans studied real estate at Penn State University. She has served on CIREI\'s Governing Council and Executive Committee, and currently serves on the Long-Range Planning and Education Steering committees, among others. Joyce Slone Broholm, CCIM, SIOR, far right, an industrial leasing and development specialist, joined Paine/Wetzel Associates, Chicago, as a senior associate more than two years ago, after making her mark as one of the top brokers with Arthur J. Rogers Co., also located in Chicago. Previously, she headed Cimar Corp., responsible for a management and leasing portfolio of more than 500,000 square feet. Joyce is a member of the Association of Industrial Real Estate Brokers. Marianne Christian-Griffith, CCIM, left, owns and operates a Kirkland, Washington-based real estate consulting firm that bears her name. As a retail site consultant, she works with Red Robin International, McDonald\'s Corp., BP Oil, Wendy\'s International Inc., Bridgestone-Firestone, and other national chains. Christian-Griffith is a past councilor of the Commercial Investment Real Estate Institute. She holds brokerage licenses in Oregon, Washington, and Alaska, and for the past five years has served on the board of the Commercial Investment Brokers Association. Additionally, she is a member of NACORE and ICSC. She earned a bachelor\'s degree from the University of California at Berkeley and a master\'s degree from Boise State University in Idaho. Linda Peroff, CCIM, right, began her career in investment property sales in 1978. She joined Cohen-Esrey Real Estate Services Inc., Kansas City, Missouri, in 1982 and managed its Investment Properties Department from 1987 to 1990, when she accepted a position as regional REO coordinator with the Resolution Trust Corp. In 1993, she returned to Cohen-Esrey, where she continues to specialize in multifamily property sales. Peroff has received numerous sales awards, including a Distinguished Sales Award from the Sales and Marketing Executives of Kansas City and the 1985 Commercial REALTOR® of the Year award from the Metropolitan Kansas City Board of REALTORS®, the first time on record a women was so honored. She holds a bachelor\'s degree from the University of Missouri at Kansas City and a master of science from the University of New Mexico. Patricia Lynn, CCIM, not pictured, with 18 years\' experience in commercial real estate, currently serves as vice president and regional marketing director for Grubb & Ellis Asset Services in San Francisco. Previously, she spent three years in real estate banking with Cushman & Wakefield\'s Financial Services Group. Earlier, she served as a broker of investment properties for Rubloff Inc. She began her career in office leasing and sales for Pearson Realty in Fresno, California. Lynn serves as a senior instructor for the Commercial Investment Real Estate Institute faculty. In addition, she has lectured before the Bank of America, BOMA, NAIOP, and California Polytechnic State University\'s School of Business Administration, her alma mater. Lynn received a degree in business administration with an emphasis on finance and real estate.