I recently had the tremendous pleasure of hearing real estate industry expert and visionary Christopher Lee speak at an Institute of Real Estate Management (IREM) conference about his new publication, entitled “Transformational Leadership in the New Age of Real Estate”. Christopher has a “tell-it-like-it-is” attitude in person that is mirrored in his writing. His perceptive document sets out the likely future of the real estate industry and outlines the factors that may be important to achieve success in the decade ahead.
In his talk to IREM, Mr. Lee made several thought provoking observations, but one in particular stands out for its value to those of us in the industry. Mr. Lee predicts that in the course of the next ten years, our industry will face an exodus of founders, senior-level executives, and experienced professionals. He forecasts that by 2025 more than 65% of present senior leaders will have left their roles. Mr. Lee comments that, “the combination of the exiting Boomers and a lack of infusion of young/next-generation talent (Xers who aren’t ready and Ys who are still learning) will result in a potential talent vacuum.”
Further evidence from federal labor data indicates that the numbers of jobs in the real estate industry have been growing at a minimal level for some time. Between 2000 and 2009, the number of real estate and community association managers had increased from 145,340 to 150,850, a gain of only around 5,500 at a time of growth within the industry.In addition, projections by the Bureau of Labor Statistics indicate that real estate property management will have an average of only 7,800 new job openings per year up to 2018.This presents challenges both to those seeking to gain entry to the industry, but also to those already working to differentiate themselves from their peers in order to excel in their chosen career.
As a property management professional, the key question to ask yourself is, whether you are prepared to take that important next step? Surely we, as the younger generation of Real Estate Managers do not want to be categorized as generationally inept? Personally, I have no desire for my career and goals to be defined by a deficit among others of my generation. If the predictions from Christopher Lee are played out then our generation must seize the initiative and manage our own careers. Becoming successful starts from within, by leading ourselves by perhaps being the “CEO of your own career”. As the CEO of our careers we have much more control over our professional development than we may realize. In truth, some managers will only consider promoting employees who proactively request a development and promotion plan. After all, if an employee cannot demonstrate the motivation and initiative to drive their own career forward, what confidence can a manager have that they will lead others?
There are several options that can help you take control of your professional career development. Avoid being sucked into this generational ineptitude by obtaining as a priority, the Certified Property Manager (CPM) designation from the Institute of Real Estate Management. The CPM involves a financial outlay certainly, and requires a dedication to complete the relevant modules. For those who may view the cost as a barrier, financial assistance is available in the form of scholarships from IREMFoundation. Further information on applying for financial assistance can be found here. The CPM is not an easy qualification to obtain. However, this is what makes it such a valuable designation to attain.
Lee suggests that the role of the Real Estate Manager has undergone great changes over the course of the last business cycle. There is a more onerous requirement to report on the business, often in real time, rather than on a weekly or monthly basis. Availability and communication of business essential information is viewed as a key part of the role. A consequence of this is that many real estate managers spend a large part of their time managing processes instead of their resources and creating value from new and existing customer relationships. The bulk of their time is devoted to collecting rents, maintaining the assets, preparing budgets and reports and responding to enquiries from corporate offices.As a result, real estate managers are sometimes perceived as ‘an asset custodian’ rather than ‘a creator of value’. Consequently the role is dispossessed of its strategic potential in terms of creating long-lasting tenant relationships, growing tenant satisfaction and retention or marrying industry knowledge with business acumen. However, the real estate manager function is changing so that in the future it will focus more on the individual’s ability to add value rather than on managing processes. This offers opportunities for us, as individuals to take ownership of our role. In the future, it is predicted that successful real estate companies will generate 50% or more of their income from selling knowledge, access to customer bases and non-asset services as they do currently from management fees. It is becoming ever more apparent that real estate professionals must think more creatively about their business and move away from a reactive reliance on generating revenue from passive income streams and towards a solutions based approach that seeks out new business opportunities for building customer and stakeholder relationships.
Christopher Lee describes a change in hiring practices among real estate firms from the traditional focus on previous employers towards demonstration of ability in key areas of the individual’s competency, motivation and cultural fit. Research conducted by Lee’s organization identified a number of common qualities sought by best-in-class real estate firms when hiring new employees, with several of these embodied by the Certified Property Manager designation:
- Knowledge of the Business. Does the individual know how to create value? Do they understand the multitude of components comprising today’s service delivery systems? Are they aware of emerging trends, shifting customer preferences, and the competitive environment in which they will be functioning?
- Multitasking Skills. Can candidates handle several competing tasks, projects, and assignments simultaneously? Can they prioritize and complete suddenly urgent tasks while still performing their normal duties? Can they start, stop, and restart activities without getting flustered, lost, or frustrated? Can they shift from a strategic/conceptual perspective to a tactical/detailed perspective?
- A Passion for the Business. Do the candidates want a career in real estate management? What motivates or energizes them about the real estate management industry? Do they feel that excitement when they come to work each day?
- Leadership Skills. Whether one is a maintenance engineer, receptionist, onsite manager, or executive, leadership skills are required. How have these candidates exhibited or demonstrated their leadership skills? Have they led others? How have they demonstrated a capacity to “take charge” of a situation? Can they motivate others? Can they make decisions?
- Career Growth Potential. Do the candidates have the capacity to grow? Do they demonstrate the desire to take control of their development? What are their career goals? Are these people performing at, above, or below their potential? Why? If they could write a personalized career job description, what would it contain?
- Data Interpretations Skills. Data is so extensively and so readily available, companies wish to assess how prospective candidates have learned how to convert data into knowledge?
The real estate industry has undergone great change in recent years that is undeniably set to continue over the next ten to twenty years. If we are to survive, both as individuals and as organizations, our functions must change to meet these challenges and maximize the opportunities that we identify. In order to prosper we each need to take control of our careers and attaining the Certified Property Manager designation is a practical first step in doing so.
For further information on the Certified Property Manager designation, please follow the link.