Fast-Track Promotion

A shortage of 30-to-45-year-old real estate professionals will result in an unprecedented opportunity for young executives to progress quickly through the ranks, experts from Hunt Realty, Tri Pointe Homes, and Clarion Partners said at a recent conference Young real estate professionals face an “enormous opportunity” for fast-tracked promotion, thanks to the industry’s acute shortage of skilled 30-to-45-year-olds, says David Gilbert, chief investment officer of Clarion Partners. Gilbert says talent has been sucked out of sections of the real estate  industry, from development and acquisition to asset management, in part due to employees being attracted to the booming tech sector, in part due to economic slumps. The  situation, he says, means talented young professionals already in real estate have an opportunity to move up the ladder faster than they  otherwise would. “I cannot believe [some young people] don’t get it,” Gilbert said during the ULI conference in New York in  October. “The challenge isn’t [about where you are in] five, six, seven years. You are going to own this place, and I hope you’re ready. Young people are going to go from [their current position] to a level of responsibility that will blow their minds.” The challenge for today’s real estate leadership, Gilbert says, is preparing the next generation to take on more responsibility. “It’s not a challenge  of getting the old people out of the way. Our challenge is to get [young people] ready.” The key is to put in place a clear talent-development program and  leadership-succession plan, says Patricia Gibson, president of Hunt Realty Investments. Describing Hunt’s internal  emerging-talent program, which identifies potential senior managers and provides a career framework to build additional skills, Gibson told the ULI conference: “Succession planning is really about talent development,” adding that a succession plan is  critical to showing younger staff, from associates to the next  generation of leaders, how they can develop their own careers within an organization. In 2009, Hunt partnered with the Teacher Retirement System of Texas to found Akard Street Partners,  which invests in real estate  operating companies. “Less than 15 percent of companies with fewer  than 1,000 employees have a  succession plan in operation. That’s putting a lot of companies at risk when people transition, walk out the door, or get hit by a bus,” Gibson says. “Our firm is about human capital. That’s our only collateral.” The skills gap also presents a huge staff-retention issue for public and private real estate firms. “This notion of career loyalty to a company, I don’t think it really exists anymore,” Gilbert told the conference. “Young people today will switch jobs in a heartbeat if there’s a [good] job opportunity.” According to Constance Moore,  former BRE Properties chief  executive officer and director at Tri Pointe Homes, the way to test  potential future leaders is to give them additional responsibilities and powers, either through committee structures or through special projects. “Not everyone wants to be CEO, but everyone wants to be developed. Everyone wants to have a career path,” Moore said during the  conference panel. “Instead of thinking about [succession planning] as a negative, you get the opportunity to develop people,” she says. “Embrace that and it enhances your own job. It’s fun to be developing people, talking to them about their careers, and helping them shape the organization.” ■