Recovery or Respite?

Commercial real estate job postings—after reaching a low of 378 earlier this year in January—may have stabilized, at least momentarily, as postings remained in the 500s for the second month in a row (see Figure 1).  This news, coupled with the recent drop in jobless claims, should give job seekers hope that the worst of the recession is over and that a new job may now be within sight.  Not everyone is as optimistic though.  “It’s too early for businesses to be hiring,” said Robert Gordon, who is a member of the National Bureau of Economic Research committee, explaining that firms are merely not as desperate to trim their workforce as they have been rather than looking to bring on new hires.*  Real estate practitioners—and millions of Americans—currently looking for a job hope that he’s wrong.

Figure 1: Commercial Real Estate Job Postings (February 2008 to April 2009)

Source: New postings of commercial real estate positions on key job boards from February 2008 to April 2009 (March ’08 excluded due to lack of data); Base = 9,464 postings.

The oft quoted adage: ‘Location, Location, Location’—usually referring to the site of a building—has never been more important for job seekers to understand than in this critically depressed commercial real estate industry.  Over the last fourteen months, five states (California, New York, Texas, Florida, and Illinois) have accounted for nearly 50% of all commercial real estate job postings.  However, even these states have posted significantly fewer job openings compared to this time last year (see Figure 2).  Put side-by-side (April 2008 and April 2009), job postings in these five states show a dramatic reduction ranging from -22% in Florida to -54% in California. 

Figure 2: Top 5 States (February 2008 to April 2009)

Source: New postings of commercial real estate positions on key job boards from February 2008 to April 2009 (March ’08 excluded due to lack of data); Base = 9,464 postings.

New York, once the Mecca of real estate where practitioners came to make a name for themselves, has shed countless finance and real estate related jobs in the wake of the financial crisis last year, and, unfortunately for the masses of unemployed, the Empire State does not appear to be in any position to quickly reverse this downturn.  From July 2008, when postings reached their peak of 115, New York has seen a general decline of commercial real estate job postings to a trough of just 49 in January 2009 (-57%), and with only a disappointing 50 jobs posted last month a quick turnaround does not seem likely. 

Figure 3: New York Job Postings (February 2008 to April 2009)

Source: New postings of commercial real estate positions on key job boards from February 2008 to April 2009 (March ’08 excluded due to lack of data); Base = 9,464 postings.

Clearly, certain sectors, e.g. Multi-Family, have dominated others in job postings—and continue to do so—while some sectors, e.g. Banking and Single-Family, find themselves in very different economies than just a year ago and are currently focused on stopping the bleeding rather than bringing on new talent as evidenced by historically low job postings in these sectors (see Figure 4).  In this new real estate world, job seekers that have Multi-Family experience—or are able to demonstrate how their past business experience is easily transferable to this leading sector—will find greater opportunities for employment than those who are unable—or unwilling—to adapt to this new reality.

Figure 4: Commercial Real Estate Job Postings by Sector (February 2008 to April 2009)

Source: New postings of commercial real estate positions on key job boards from February 2008 to April 2009 (March ’08 excluded due to lack of data); Unspecified Sector removed (4,533 postings); Sectors with fewer than 100 postings removed (284 postings); Base = 4,647 postings.

Job seekers will be much more effective in their job search if they recognize which job skills they currently have and, perhaps even more importantly, also recognize which job skills are currently in demand.  Employers are searching for individuals who can fill roles in Accounting/Control, Property Management, and Leasing to name a few of the top Job Functions (see Figure 5).  Mortgage Originations, which peaked at 44 job postings in May 2008, may not be the best place to look for a new job as only 4 openings were listed in April highlighting the severe credit crunch felt by the real estate industry.  A substantial increase in Brokerage/Sales positions over the last month (postings nearly doubled from March to April) offers job seekers with persistence and industry relationships the chance to prove themselves in a sluggish acquisition/disposition environment.

Figure 5: Top Commercial Real Estate Job Postings by Job Function (February 2008 to April 2009)

Source: New postings of commercial real estate positions on key job boards from February 2008 to April 2009 (March ’08 excluded due to lack of data); Job Functions with a significant number of postings during the period were included; Base = 6,153 postings.

* See Wall Street Journal article, “Drop in New Filings Suggests Jobless Claims Hit Peak,” written by Justin Lahart.


Author:  Joshua K. Ladle, Cornell Program in Real Estate Student