Almost every real estate professional today could name at least two or three colleagues who are out of work. In spite of the old adages about keeping one's nose to a grindstone (or just keeping it clean), professionals at all levels and of all abilities have been hit by the rash of corporate mergers and cut-backs, bank takeovers and bankruptcies that color the business of real estate today.
Indeed, despite the disclaimers issued periodically from the White House and other optimistic observers, the American economy, and with it the national real estate market, appears to be facing more than just the garden-variety downturn. And, in almost every market, real estate professionals in search of employment are facing opportunities that range from grim to bleak.
For one thing, many companies, in the face of shrinking business opportunities, are being forced to cut professional staffs--a process which in many cases includes the elimination of property management positions.
In addition to the slump in the real estate business, demographic changes also have resulted in declining employment opportunities in almost all sectors of the economy.
Specifically, experts like the Real Estate Research Corporation, Chicago, are predicting very low growth in the overall workforce in the 1990s, thanks to demographic and economic trends that include the aging of the infamous Baby Boom generation. In fact, the latest estimates by the Bureau of Economic Analysis, an agency of the U.S. Department of Commerce, predict an increase in real estate, insurance, and finance employment of only 1.2 percent annually in the '90s, down from annual growth of 4 percent in the '80s.
In addition to these types of overcrowding, the property and asset management fields also are being glutted by a whole new breed of managers: out-of-work real estate developers.
The real shortfall in the real estate employment situation is not in property management," says Sandford I. Gadient, chairman of Huntress Real Estate Executive Search, Kansas City, Mo. "The shortfall is in (positions for) people who were involved in development. They're dead. They'll have to go into the restaurant business or into property management."
However, despite this added competition, today's market does offer some good news for property managers.
For one thing, many property management executives and owners are skeptical of developers-turned-property managers, doubting both their ability to shift careers and their willingness to make a long-term commitment to property management.
Edward Biskind, chairman and CEO of E.I. Biskind & Associates, a suburban Chicago developer and agent, is one. "I've found that developers looking to augment their income generally are not as capable of dealing with clients and dealing with properties other than their own," he says.
"The whole business of property management is being flooded by Johnny-come-lately developers and other people from that side of the business," echoes Roger Ogden, chairman of Maurin-Ogden and Stirling Properties, New Orleans. In general, he says, developers lack both the experience and the commitment to property management as a long-term strategy that are necessary for effective property management.
Gadient notes that some developers have made a successful transition to property management. "The sharp ones can pick up the skills relatively quickly," he says. "But, we've seen many cases in which companies made real mistakes by taking people and assigning them to a property when they didn't have the experience or expertise. Some of those performances have been pretty sorry."
According to Biskind, most developers shouldn't be a big worry to experienced property managers.
Instead, he argues, "There is an even greater need for highly qualified managers at a time when the field is being rushed into by developers who are looking to pay their light bills. …