Is a Commercial Real Estate Recovery in Sight?
Commercial real estate job postings in March were up an encouraging 20% over February’s postings and an impressive 36% from its trough in January, according to the SelectLeaders/Cornell Job Barometer research team (see Figure 1). While these job postings, when seen in absolute terms, pale in comparison to the number of jobs lost over the last 12 months, any increase in job postings is a welcome sign for the commercial real estate industry, which has seen very little good news in the last few months.
“Don’t count out the real estate industry,” says Tony LoPinto, founder of SelectLeaders. “Of course, no industry has been immune to the collapse of Wall Street, and real estate—along with financial services—has been hit harder than others. But we could be seeing some signs of recovery in the commercial real estate sector as evidenced by this slight increase in job postings.” Mr. LoPinto says his company, SelectLeaders, a commercial real estate job board, has also seen a boost in the number of postings made by real estate employers from February to March.
Figure 1: Commercial Real Estate Job Postings (February 2008 to March 2009)
Source: New postings of commercial real estate positions on key job boards from February 2008 to March 2009 (March ’08 excluded due to lack of data); Base = 9,018 postings.
Whether this increase in job postings actually signifies a recovery, or is merely following a historical, seasonal uptick in real estate hires—albeit at a much lower level than has happened in the past—may not be known for many more months.
Another possibility is that real estate employers are opportunistically hiring employees in anticipation of a market correction in mid 2009. Whichever the actual reason, the fact remains that jobs are being posted and real estate companies are looking to hire qualified candidates. Knowing where the jobs are and what types of jobs are being posted can give a job seeker an edge over other candidates.
Not surprising, California, New York, Florida and Texas account for the majority of job postings (see Figure 2). These four states represent 46% of all the commercial real estate job postings made in March. As reported in last month’s Job Barometer Update , these states consistently deliver the most job postings among the eight major online job boards. A job seeker, who is willing to relocate if necessary, should focus his/her efforts on these states to find the greatest opportunity for placement within the commercial real estate industry.
Figure 2: Top 10 States Posting in March 2009
Source: New postings of commercial real estate positions on key job boards in March 2009; Base = 513 postings.
The Multi-family sector continues to attract the attention of the SelectLeaders/Cornell Job Barometer research team as job postings nearly doubled in number from January 2009 to March 2009 (see past Multi-family article ). After a tremendous growth of Multi-family job postings during the first half of 2008, when it reached its peak of 257 in July, postings had fallen to a dismal 74 in January 2009 (see Figure 3). In a sign of growth and opportunity within the Multi-family industry, as of March, these postings had increased nearly twofold to 142.
Figure 3: Multi-Family Job Postings (February 2008 to March 2009)
Source: New postings of commercial real estate positions on key job boards from February 2008 to March 2009 (March ’08 excluded due to lack of data); Base = 9,018 postings.
Another sign of the strength of the Multi-family industry—compared to the other commercial real estate sectors, e.g. Office, Retail, Hospitality, etc.—is the relative proportion of its job postings to the whole. The SelectLeaders/Cornell Job Barometer research team routinely codes each job posting according to its sector to shed more light on which industries are expanding. After removing job postings which did not specify a sector, Multi-family postings accounted for over half of all job postings in March (see Figure 4).
Figure 4: Commercial Real Estate Sector Job Postings in March 2009
Source: New postings of commercial real estate positions on key job boards in March 2009 (235 “Unspecified” sector postings removed from March total postings; sectors representing bottom 10% of postings removed from graph to improve visual clarity); Base = 278 postings.
This clear dominance by the Multi-family industry—when comparing the total number of job postings to the other sectors’ postings—is not a recent phenomena. Since February 2008 (when the SelectLeaders/Cornell Job Barometer research team began pulling and coding commercial real estate job postings from major online job boards), Multi-family job postings have made up a significant portion of the total commercial real estate job postings made online. Indeed, for most of 2008, Multi-family routinely averaged close to 40% of the total number of postings (see Figure 5). But within the last two months (February and March), Multi-family postings have accounted for 50% and 51%, respectively. Clearly, Multi-family has not suffered to the degree that other real estate asset classes have and, as a result, is in dire need of additional bodies to service the bricks and mortar portion of its business as well as the human servicing aspect.
Figure 5: Multi-Family Job Postings as Percentage of Whole (February 2008 to March 2009)
Source: New postings of commercial real estate positions on key job boards from February 2008 to March 2009 (March ’08 excluded due to lack of data; “Unspecified” sector postings removed); Base = 4,691 postings.
Property Management and Leasing jobs account for over 60% of all Job Functions within the Multi-family sector (see Figure 6). The significant portion of job postings in these two disciplines may be explained by the cyclical gearing up of apartments for the coming summer turnovers as well as the abundant demand for rental units by countless Americans facing challenging financial futures, who are flocking to lower priced housing options.
Figure 6: Top Four (4) Multi-Family Job Functions in March 2009
Source: New postings of Multi-Family commercial real estate positions on key job boards in March 2009; Base = 142 postings.
These Multi-family jobs are most likely not the glamorous positions, e.g. senior management with high pay, that candidates dream of, but the commercial real estate industry is not atypical of other industries. In fact, a recent Wall Street Journal article talks of widespread “trading down” by employees who have lost their jobs to positions that generally have lower pay and offer less potential. This is certainly the case within the Multi-family sector where Property Management and Leasing have typically been lower-level job opportunities. While these positions in times past have not been highly desired and apartment owners struggled to fill them, in this environment with bills piling up for many laid off employees any job is a welcome job.
Available mid-to-upper management positions still exist within the commercial real estate industry, but most employers fill these openings through networks of industry professionals and word of mouth. The “desirable” jobs that do make it to an online job board are found in more abundance at the specialized sites such as SelectLeaders, E-Financial, and ICSC.
Author: Joshua K. Ladle, Cornell Program in Real Estate Student