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 Introduction to Commercial Real Estate Careers and Paths to Success  View Close
Real estate involves virtually every field of business and many outside of business. That is why we find it so exciting! In fact, it is one of the best areas to study for general business background simply because real estate problems and cases require the integration of many different disciplines.
Is Real Estate a Discipline? View Close
Academics seem to take delight in this debate. Professors who teach "real estate" usually have training in finance, economics and a variety of other business skills. This sort of "existentialistic debate" on whether real estate is a discipline unto itself is founded in a search for the justification of the study of real estate as a key curriculum component of a complete business education. But the enormous proportion of business and personal wealth tied up in real estate is reason enough to study real estate, whether or not it is a unique discipline as opposed to an applied field. Real estate programs that offer two year degrees, four year degrees, MBAs as well as other Masters programs now exist at hundreds of colleges around the United States and Canada. Real estate programs also exist in the United Kingdom under the name of "surveying" or "real property" and in the Netherlands, Singapore, Hong Kong, France, Canada, Germany and others. Three of the largest programs in the world exist in Singapore at the National University of Singapore, NUS, in Germany at the European Business School and in England at Reading University. Real estate programs are now emerging in many of the newly industrialized nations like Thailand, South Korea, China, and Russia. In fact, real estate skills including valuation methodologies which feed into development, financing, and investment decisions are essential in order to develop efficient capital markets.
A separate discipline requires relationship principles (core knowledge) that are unique to it alone, such as those found in physics and math. Few business fields will purely meet such a test, but enough knowledge has been produced within areas like finance that most people will view this as a "discipline". But whether there are unique relationships that apply only to real estate does not really matter. Real estate is such a vital component of any modern economy and so important in the standard of living that most of us desire, that there is no question that the study of real estate is worth your time.
Real Estate Skills, Self-Assessment, and Careers Paths View Close
What are the required skills and career opportunities available in the real estate industry? Real estate professionals must be able to research, analyze, negotiate, plan, market, manage and often work long days. Before going into detail on skills and career paths, first think about the question: "What am I good at?" A good place to start before thinking about any career is with an honest self-assessment. Imagine a straight line axis with two extreme personality attributes at opposite ends: "analytical" versus "people-oriented."
Pure Pure
Analytical
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People
Type Type
Very few of us are both highly analytical and highly people oriented, but rather fall somewhere in between. Analytical types are comfortable with research and quantitative analysis, enjoy learning new technical skills, and like problem modeling and solving. People oriented types are extroverts by nature who prefer working with people, talking and socializing as opposed to sitting behind a computer. Certain real estate specializations tend to require more of the analytical attribute while others require more of the people oriented attribute. For example, appraisers, mortgage lenders, corporate real estate managers and property managers must be strong on the analytical side with strong written skills. Brokers
and leasing agents require strong interpersonal, negotiation, and verbal skills. Developers, commercial mortgage brokers, and real estate consultants must have a heavy dose of both.
What do Real Estate People Need to Know? View Close
Real estate people can never know too much. They must constantly strive to stay abreast of business trends, and think about issues affecting their clients, businesses and investments such as current tax laws, new highway routes or new modes of transportation, technological trends, interest rate trends, or the implications of existing and proposed zoning regulations. Beyond a general knowledge of business and economics, employers expect neophyte real estate professionals to be computer and communication system literate with spreadsheets, data base analysis, word processing, graphical analysis and geographic information systems. They also expect new employees to communicate well and to be able to make oral presentations. Negotiation skills are also an important aspect of the real estate industry, and students should practice these while in school. Specific career paths are discussed below along with key trade associations. All of the trade associations listed in the sections below can be found using links from the online version of this resource: https://www.realcareers.org
Appraisal and Consulting View Close
Appraisers are paid to estimate the value of property after a systematic analysis of the prices of similar properties or based on an analysis of discounted future cash flows derived from an estimate of rents less operating expenses and financing. This valuation estimate requires an analysis of the market and the subject property being appraised. Most appraisers work for a variety of clients on a per assignment fee basis, while others are internal staff appraisers producing value opinions for their employer. Most appraisers specialize in residential property or specific types of commercial property. Federal laws in the U.S. require that any appraisal required when the government is involved directly or indirectly must be done by a state certified appraiser. Certification is at two levels, residential and general, and is based on a combination of tests and experience. Trade association designations require more experience and education than the state certification process and also are required by many clients, the most respected of which for commercial property is the MAI for Member of the Appraisal Institute. A similar group with broader exposure in Asia and Europe is the Royal Institute of Chartered Surveyors or RICS.
The outlook for appraisers involved in specialized commercial appraisal and consulting, such as site analysis, buy versus lease decisions, property tax appeals, portfolio re- valuation, and investment analysis is quite promising. Many commercial and consulting oriented appraisers work within larger consulting firms including accounting and market research firms.
Technology is having a major impact on the commercial and residential sectors of the real estate industry. The outlook for residential appraisal is being greatly influenced by the introduction of new technology and automated appraisal techniques. Opportunities abound for real estate professionals to revolutionize the automation of the residential sector, and at the same time, residential appraisal firms that do not embrace the new technology may become extinct. For more information about appraisal and consulting see the trade associations, the Appraisal Institute under AI, the Royal Institute of Chartered Surveyors under RICS and the Real Estate Counselors under CRE listed at the trade association web site.
Brokerage and Leasing View Close
Real estate agents that represent buyers, sellers, owners or tenants must be licensed by the states in which they work. All states require a test before issuing a sales license. The more advanced broker’s license requires more experience and education as well as an additional license test provided at the state level. Some states allow reciprocity where a license in one state satisfies for an application to do business in another state.
The public perception of the real estate industry is often based on images of residential sales agents, since this is the most visible and highly advertised segment of the real estate industry. Residential agents represent buyers or sellers in exchange for a fee, which is generally only payable based on the completion of a sale known as a contingency fee. This productivity-based segment of the industry requires long and uncertain hours, often resulting in the vast majority of sales agents dropping out of the industry because their commissions provide inadequate financial support. Those that succeed can make very attractive incomes. People skills dominate this field, and a lack of college education has not hindered many successful residential agents. The current outlook for residential brokers and agents is positive for those involved in the utilization of the available internet and intranet technology for marketing and efficiently working with buyers and sellers.
Continuing education is generally required by the licensing authorities in each state and many agents take advantage of programs offered by the National Association of Realtors or NAR at the national, state or local level.
Commercial brokerage requires both people skills and a much higher level of technical business knowledge. For this reason most successful commercial agents need at least an undergraduate education and many have graduate degrees in business, enabling them to work with corporations, tenants, institutional buyers and sellers, domestic and foreign business entities and a host of sophisticated investment and business clients. Within the commercial industry most agents specialize in a particular type of property such as industrial, office, retail, hotels, apartments, recreational and parking. Most commercial agents are constantly involved in continuing education activities through a variety of trade associations. Successful commercial agents earn executive level compensation or more but must watch the markets closely to anticipate economic trends affecting the real estate industry.
For opportunities in commercial brokerage and leasing see CCIM, Certified Commercial Investment Member, SIOR, Society of Industrial and Office REALTORS, NAIOP, National Association of Industrial and Office Properties, CoreNet, Corporate Real Estate Network, ICSC, International Council of Shopping Centers, and CREW or NNCREW Commercial Real Estate Women or the National Network of Commercial Real Estate Women. Among the major commercial real estate firms are Colliers International, Grubb and Ellis, Staubach, Jones Lang LaSalle, CB Richard Ellis, Marcus and Millichap, Sperry Van Ness, DTZ, and NAI.
Corporate Real Estate View Close
All major corporations must deal with real estate needs. Overall corporate real estate management involves maximizing the value to the firm of the resources devoted to space needs. Once simply viewed as a cost center, corporate real estate managers are now attempting to improve the efficiency of real estate usage by considering "just-in-time" office sharing and enhancing the productivity of the work environment. In addition, corporate real estate heads often deal with site analysis, buy versus lease decisions, acquisition and disposition, portfolio refinancing and sale leaseback arrangements, property tax appeals, and a host of facility management decisions. Many corporations are now outsourcing much of their work to the major brokerage firms such as those listed above.
For more information about corporate real estate see CoreNet Global (formerly IDRC & NACORE).
Development View Close
Among the most entrepreneurial of the real estate career paths are the developers who may acquire land or older property in need of rehabilitation and prepare it for development or in some cases also handle the construction process. Developers specialize in residential or commercial development, and within these they specialize by size and type of property.
Today home builders are getting larger and working more on a regional and national basis. Larger home builders have a number of specialists within a firm or affiliated as subcontracting consultants, such as those that specialize in land acquisition and market analysts, financing developments, project managers and marketing sales staff to name a few. Developers who went through a period of over building in the late 1980’s and early 1990’s are now actively engaged in burgeoning suburban office and industrial markets. Mixed residential use development is becoming more common and this requires greater expertise than ever and all developers today must be familiar with sustainable real estate
practices.
For more information about residential development see the National Association of Home Builders, NAHB as well as the NMHC the National Multi-Housing Council. For more information about commercial development opportunities and trends see the Urban Land Institute, ULI, the National Association of Industrial and Office Properties, NAIOP, and the International Council of Shopping Centers, ICSC.
Mortgage and Construction Lending View Close
Mortgage lenders specialize by size of loan and property types much as do developers or commercial brokers. Primary lenders for residential single family include mortgage companies that resell the loans in the secondary mortgage market, as well as commercial banks, savings institutions and credit unions. The banks and savings institutions usually pay employees on a salary basis, sometimes with a bonus. Mortgage companies rely more on productivity based compensation. Loan officers must know about credit analysis as well as appraisal, title and environmental concerns and a host of other government regulations. Multifamily mortgage lenders act much like commercial mortgage lenders with more emphasis on property analysis including market trends, tenant review, income and expense review as well as the value of the subject property being used as collateral. Commercial banks and savings institutions provide most of the smaller multifamily loans while life insurance companies, pension funds, Real Estate Investment Trusts (REIT) and CMBS (collateralized mortgage backed securities) investment bankers and pension funds often provide larger scaled financing.
Non-residential mortgage loans involve commercial banks as well as life insurance companies and pension funds as typical suppliers of capital. Commercial mortgage lenders require more business education and analytical skills than do the residential lenders, often requiring graduate education. Mortgage brokers are often used to represent smaller life insurance companies and pension funds that cannot efficiently process their own loans. Mortgage brokers work on a commission basis paid after successfully placing mortgage
loans that meet the needs of the borrower and lender.
Construction lending is the most complicated end of the financing spectrum involving all of the concerns of the permanent mortgage lender (credit, income, expenses, property value and environmental) as well as absorption risk, construction cost risks and delays, and other concerns. Thus, construction lenders are often hired from among the ranks of experienced mortgage lenders. Most construction lending is provided by commercial banks.
Property Management View Close
Property management involves maximizing the net revenues or productivity of property based on managing rental flows, working on tenant retention, managing and contracting for all aspects required to operate a property (cleaning, maintenance and repairs, paying utilities, property insurance, property taxes and so on), reporting to owners and overseeing resident or on site managers. Property managers are usually involved in leasing and facility management decisions. Those that manage several properties and are involved in acquisition, disposition, financing and portfolio management decisions are known as "asset managers." Most property managers start as on-site managers working closely with
tenants.
Consolidation is the general trend in the industry; many property management firms are national or international in scope and are able to take over an entire institutional portfolio of various properties from different cities. Property managers’ fees are often based on the rental flows of the property, as well as the complexity of the property management work. For example, shopping center property managers may be involved in tenant merchant associations, joint promotions and advertising which involves much more time than, say, a single tenant industrial property where the primary management function is accounting based control, reporting and monitoring.
For more information about property management see the Building Owners Managers Association, BOMA, and the Institute of Real Estate Management, IREM.
Institutional Real Estate Investment View Close
Most of today’s large scale real estate transactions ($10 million dollars and up) involve institutional investors. Among these are the Real Estate Investment Trusts (REITs), larger life insurance companies and pension funds. These institutions may utilize commercial brokers in the local markets but rely on internal staff to review and analyze proposed investments. Often these institutions look for a real estate background and an MBA degree when staffing such positions. Institutional investors pay attention to general industry niche market trends, tax law trends, regulatory trends, local geographically based economic trends, demographic trends and global economic trends in addition to micro level real
estate deal analysis.
The slogan "think globally, act locally" can be applied to today’s institutional investment firms, and many of them also "act globally." Whether working with domestic or international
trusts, strong analytical skills, the ability to manage portfolios and excellent communication skills are required. For more information see the National Institution of Real Estate Investment Trusts, NAREIT, and the National Association of Real Estate Investment Fiduciaries, NCREIF. Also see RECRA, the Real Estate Capital Resources Association and PREA, the Pension Real Estate Association.
There are many other specializations related to the real estate industry; however, the specializations above generally require a business background. Other specializations include design, (see AIA, the American Association of Architects), engineering, law, construction, environmental consulting, real estate tax and regulatory counseling, design review, economic and market feasibility analysis, planning (see the APA, American Planning Association), education and research. Overall, real estate provides many promising career paths.
Choosing a University for the Study of Real Estate View Close
There are many fine real estate programs in the United States as well as in many other industrialized countries. Leading brand name schools including MIT, Wharton, Wisconsin, Berkeley, and Harvard have fine real estate programs, but there are many others that are excellent today and constantly improving. Rather than list out all the other schools (see Part 3 for universities with real estate programs), consider the following criteria for selecting a program and use the university listings for more research:
Faculty noted for their research and publishing
Internships and cooperative education jobs encouraged
Professional placement assistance and web site support
Scholarships for real estate majors
Student real estate business organizations provide career exposure
Advisory Boards that provide mentoring and career assistance
Field trip experiences are available
Public schools within the state will generally be lower in tuition costs
Courses in related fields are available such as Economic Geography, Geographic Information Systems (GIS) and Land Use Planning
Looking for Employment in the Real Estate Industry: Advice to Students View Close
Once you have decided on a career path in real estate your job search plan must start well before graduation, particularly in difficult job markets. Most students seem to think that they should focus only on school, current part time jobs and social life until they near graduation. But, the smart students who will get the offer understand that the job search starts as soon as they know which industry appeals to them. Here are some selected tips on how to start the professional search plan:
- Join the local university real estate organization or club, and if one doesn’t exist, start one. The National Association of REALTORS has an affiliate known as Rho Epsilon,
but there are many independent university groups. For example, at the University of Cincinnati the Real Estate Club is called "Alpha Rho Epsilon" and at the University of San Diego it is simply the "Real Estate Society" both oriented towards commercial real estate. Become an officer of the organization if possible and become involved in program planning. Not only will becoming an officer look great on your resume, it will give you the opportunity to meet some key real estate professionals. Encourage your real estate group to have as many officer positions as sincere volunteers exists, i.e. President, Vice- President for Programming, Vice-President for Finance, Vice-President for Career Placement, Vice-President for Alumni Relations, and so on. Take advantage of this opportunity to learn about different career paths by inviting speakers from various specialties and arranging field trips to development projects or coordinating a "spend-a- day" or "shadow" program with local professionals and students. "Mentors" can also be sought from local
professionals who are matched up with students one-to-one and encouraged to meet quarterly to review career plans. On the web site that will accompany this book we have a national mentor match up system where volunteer mentors from industry and students can match up.
- Join some of the local/regional and national real estate trade associations and attend their meetings. Most of the trade associations mentioned above allow student participation, often with greatly reduced fees or free. If the local chapters don’t have such a policy for discount student affiliation ask them to start one. Keep an address file of all professionals that you meet for potential future use. Consider developing your own business card, even if it purely a personal card, and list your e-mail address on the card as well as your personal web page address that can be accessed for an updated resume.
- Try and attend a regional or national conference of one of the above trade associations. This is most easily accomplished when negotiated on behalf of several students that are part of a university sponsored real estate organization, but most of the professional associations will provide greatly reduced fees for students that want to attend part or all of a major conference. These conferences and dates can be found at the web site for each of the organizations noted above.
- Start to "network" with the most promising and impressive of your classmates. Some day some of your classmates will be potential business partners or colleagues or among those who can influence your business success. Getting to know these future colleagues now while they are more accessible to you is an opportunity that should not be forsaken. Keep in mind that your performance in the classroom and on cases is something that influences your classmates’ future opinions of your abilities as well as your professors.
- Try and get to know at least two or more faculty members well enough that when you are asked for a reference letter you won’t panic thinking no one really knows you beyond exam scores or grades. A reference letter that states only grade performance will not do you much good. Professors will get to know you if you join student organizations and participate in activities out of class. They will also get to know you if you speak up in class, ask good questions and prepare well for class. Last, they will get to know you if you take advantage of office hours and review the current class expectations along with some of your personal goals. Most faculty do not mind a little of this personal planning discussion and actually enjoy getting to know their students better.
- Once graduation gets closer it makes sense to start sending out letters along with the resume requesting appointments for career planning advice. If someone has a job they will certainly be responsive to a follow up phone call a few days after receiving a resume. If the recipient has no job prospects, they may still be willing to meeting briefly to review the organization of the industry and leading firms in the area, to which letters might be sent. This is known as an "informational interview”" to which industry professionals are much more receptive while a student is still in school. Don’t wait for potential employers to call you back. Most won’t! It is almost impossible to follow up too much.
- Prior to a real job interview spend some time researching the company and learning about current industry trends. This can be done via the library, local business papers, the internet, and through contacts made while in school. Make sure to develop a set of questions to ask at the appropriate time. Such questions can be as important as the job interview answers in showing real concern for the firm and the position. Self-confidence is critical for all successful interviews. A "can do" attitude is essential. Always follow up interviews with thank you letters and a request for feedback.
- Post a resume on Real-Jobs.com, or your university career site as soon as you are ready for part time jobs or within 12 months of a full time job. Real Jobs is a web site designed to serve the students and alumni of university real estate programs or with a career interests in real estate, as well as potential employers and professionals. Unlike most resume and job posting systems, you can search realjobs.com by geography, experience, education or other criteria. Post a resume on Real Jobs at the following address: http://www.real-jobs.com.
Further Professional Development View Close
Even after landing a job there is a need to continue to work hard at maintaining skills and knowledge in order to maintain marketability and value to a firm. This requires constantly monitoring what is going on in the local, regional, national, and even global markets within those areas where expertise is claimed.
How does anyone keep up on their field? First, the simple answer is to read, read, and read. Most of this reading will be skimming, with selected in-depth reading. Read local business papers, newsletters from private firms like and trade associations, specialized papers and monographs. Reports from the local City Economic Development office, Chamber of Commerce or other non-profit business organizations might be useful. National periodicals like "National Real Estate Investor", "Commercial Property News" "Shopping Centers Today" from the ICSC, "Development" from NAIOP, "Institutional Real Estate Newsletter", "Area Development: Site and Facility Planning" and many others are good examples of publications that monitor industry trends. Newsletters like those produced by IREI, the Institutional Real Estate Investor, Heitman, Prudential, Fidelity, Legg Mason, Jones Lang LaSalle, the large accounting firms like Deloitte, PricewaterhouseCoopers and many others are also potentially valuable reports. Customized clipping services are also available via the internet where the user subscribes to selected topics of interest and receives selected reports via e-mail and secured subscriber web sites on only the selected topics.
Beyond reading "real estate" publications, try and broaden yourself with books and general business or management journals and attend continuing education seminars. These are often required among some states for real estate license maintenance, appraisal certification maintenance or for various real estate designations. These can be a waste of time and money if the sole purpose is license maintenance, but if selected carefully these can be very valuable not only for the direct instruction from speakers but also for the chance to talk to colleagues and share experiences. One or two seminars a year is probably the minimum most professionals need. Consider a professional designation.
Professional Designations View Close
Real estate, more than any other industry, because of its diverse nature, has a cornucopia of professional designations. These include for example:
MAI for Member of the Appraisal Institute
MCR for Master of Corporate Real Estate
CRE for Counselor of Real Estate
CCIM for Certified Commercial Investment Member
Using this Career Resource Guide Effectively View Close
Part 2 presents profiles of commercial real estate professionals, including career background information and advice, compiled by Dr. Margot Weinstein. For more information on these profiles, or extended length interviews please contact Dr. Weinstein (email on page 2) or visit our website (www.realcareers.org). Part 3 includes a listing of universities that offer real estate programs and degrees. High school students may use this guide to select an undergraduate program of interest. University students may use this guide for deciding upon graduate education options.
Web sites, contact and general program information are provided for all schools listed.
Part 4 includes a list of trade associations that offer opportunities for continuing education and professional licensing designations. These resources are often excellent alternatives to a full college degree for those with some business background or experience and an interest in focused or continuing education. Even those professionals with university training in real estate need to maintain this knowledge base and the trade associations listed in this section provide the best place for career updates and advancement.
Part 5 includes a glossary of real estate terms, including general, office, and industrial related terminology, along with information on how to find more glossaries online.
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