CORFAC News

It’s well known that companies are focused on competing for the best employees. The so-called War for Talent was in full swing even when unemployment levels reached double digits. Now that unemployment rate has fallen to a historically low 4.4 percent, the commercial real estate sector is feeling the pinch of tight labor markets in multiple ways.

A lack of qualified labor is having an impact on real estate demand as well as new supply.  As companies have difficulty hiring the people they need, the need for expansion space is diminished. And new development is hindered in part by rising construction costs, brought on by a shortage of experienced construction workers.

Moreover, real estate companies must make a concerted effort to attract and retain talented young people. Affiliates of CORFAC International discussed these challenges at the 2017 Fall Summit in Denver, and shared ways they’re helping clients to win the War for Talent, as well as strategies for attracting the next generation of leaders to the real estate sector.  Here’s what our members are seeing in the market:

1)The War for Talent is expanding beyond the technology field and other innovation sectors.

 “It is not just an office environment these days which needs to be loaded with amenities and features. Our industrial clients are just as concerned about attracting and keeping talented employees,” said Susan E. Singer, CCIM, Executive Vice President, Brokerage Services at Bradford Commercial Real Estate Services/CORFAC International, Dallas.  “Our conversations with them used to start with the cost of rent but they are more likely to start with the availability of labor followed by the cost of logistics.”

“Companies today are realizing that their employees are their most valuable resources.  With that in mind, they are building office spaces that are light and bright and reflect their company’s culture.  These are the kind of spaces that will attract the best and brightest new employees.  Old, dated, poorly lit office spaces are a definite turn-off to young people today,” said Howard E. Greenberg, SIOR, President of Howard Properties, Ltd., White Plains, New York. 

 “Building amenities have become an important factor in employee satisfaction and can be a significant advantage for a landlord,” said Jason M. Wolf, Managing Principal of WCRE/CORFAC International, Marlton, New Jersey. “With modern communication breaking down the traditional barriers between home and work, young talent today is seeking out a workplace that’s more than just an office.”

2) CRE firms must work harder to attract and retain the next generation of leaders in our industry.

“TRI is very concerned about what we consider to be the ‘lost generation’ of young talent entering commercial real estate brokerage post-2008 recession,” said Tom Martindale, SIOR, President of TRI Commercial/CORFAC International, San Francisco. The allure of the Bay Area has been all about tech jobs in recent years, and even with good opportunities in real estate today, young people may not be able to take advantage of them, he noted:  “The lengthy ‘ramp-up’ to a sustainable brokerage practice and reasonably consistent revenue flow is still too daunting for most entry-level people with high cost of living expenses.”

 “Young people are leaving college saddled with student loans which makes it tough for them to enter a profession where the compensation is traditionally commission based only,” Singer added. 

3)Despite the challenges, young people are adding tremendous value to real estate firms with proactive career development programs.

“While there may be fewer individuals entering commercial real estate, I find the caliber of the people who are to be quite impressive.  It’s so much more about quality than quantity,” said Adam Tarantur, CCIM, Principal at Podolsky Circle/CORFAC International, Des Plaines, Ill.  Podolsky promotes a healthy work-life balance and emphasizes mentoring programs for all new brokers it hires. “We believe savvy young business people recognize that they need to be working at a firm that values their professional development,” Tarantur said.

“As a boutique firm, we’ve gone out of our way to have internship programs and pair younger brokers with experienced ones to learn the business,” Wolf said. “We think up-and-coming professionals are going to give us an edge in the marketplace, especially with the changing modes of communication taking place.  If we want quality people in the business, those of us who are established have the responsibility to cultivate the next generation.”

“We have implemented a very good training program up front and strive to provide some benefits they may not get with another small or mid-size firm, such as IT support, access to our CRM and in-house graphic designer,” Singer said.

Membership in CORFAC International helps firms to contend with labor challenges. “CORFAC’s Next Gen initiative reminds principals that it is not easy being new in commercial real estate brokerage,” Tarantur said.   “Regardless of how well a Next Gen is being mentored, being with other Next Gen brokers from around the world, provides an additional avenue for advice, best practices and an opportunity to serve clients outside of one’s own market. “

Article originally appeared on GlobeSt.com, October 2017.