The year 2030 is not so far off. That’s when, as the United States Census Bureau reminds us, all baby boomers will be 65 or older. The commercial real estate industry employs many of them: In 2018, the median age of the commercial members of the National Association of Realtors was 60. Some brokers are already eligible for retirement; others will be soon. Are brokerages ready for this transition of leadership?
The answer, generally speaking, is an emphatic no, according to Grant Pruitt, SIOR, president and managing director of Whitebox Real Estate in Dallas. He has observed little “outward focus on finding the real estate brokers of the future” and little training across the industry. “Real estate firms historically have a ‘sink-or-swim’ mentality, and they hire you into the shark tank with everyone around you as a competitor,” he says. “The training historically comes through osmosis (drive around in the car and observe a senior broker).”
But some brokerages, including Whitebox, are breaking with tradition and facilitating the transition of leadership to the next generation. They’re accomplishing this by devoting attention and care to recruitment, training, and mentoring.
Strong recruitment strategies focus on passion, personality, trial periods, and diversity. Jerry LoCoco, SIOR, senior vice president of Paladin Partners in Plano, Texas, suggests brokerages recruit people who are truly passionate about the business and whose purpose extends beyond a paycheck.
He also recommends that companies provide personality assessments to help place people in appropriate positions. As he points out, people with strong analytical skills are important to commercial real estate, but they might not be comfortable going out and knocking on doors or picking up the phone and calling prospects.
Trial periods can also be helpful for both parties. R&R Realty Group in Des Moines, Iowa, offers a paid internship program that serves, in effect, as an “extended interview format.” That’s the description from Adam Kaduce, SIOR, a senior vice president of the firm, who began his own career as an R&R intern.
Kaduce and others have observed a greater emphasis on diversity in hiring and they applaud this development. As executive coach Simone Sloan notes, “diversity and inclusion are strategic competitive advantages for organizations.” Savills, the real estate advisory firm, clearly recognizes these advantages and is recruiting accordingly: Its inaugural class of trainees in its new Junior Broker Development Program (JBDP) is 90% diverse.
Recruitment, of course, is only the first step in preparing the next generation. “The typical learning curve for most young brokers is incredibly steep,” says Gabe Marans, executive managing director of Savills and one of the JBDP leaders. “The industry is so complex and much deeper than, say, a simple lease transaction. To be successful, one needs to build a solid foundation that includes mentorship, training, and development, and access to people at every level of an organization – a 360-degree, comprehensive training program that also alleviates the financial burden so many face early on in their careers.”
In recognition of these challenges, JBDP offers participants a full salary over a 15-month term. They also gain top-level exposure to all sides of the business by rotating through brokerage, consulting, workplace strategy, cross-border, research, project management, capital markets, digital services, and more.
R&R shares Savills’ aversion to the “sink or swim” mentality. Kaduce arranges for new hires to shadow a different broker every week. “I want them to observe everything,” Kaduce explains. “We really push that immersive experience.”
Mentoring goes hand-in-hand with training. In the view of Pruitt, mentorship has to start at the top, and it has to be reinforced. Sloan agrees: “Hold managers accountable and reward them for developing their teams,” she advises. Structured mentorship programs “help the next generation better navigate the culture and organization, feel supported, and start to add value more quickly.”
Justin Leigh, a participant in Savills’ JBDP program, appreciates the access to mentorship. He reports: “No matter their seniority level, I have yet to come across a single person unwilling to help me in any way they can.”
Pruitt, who benefited from “fabulous mentors” himself, emphasizes that mentorship benefits both the mentor and the mentee, and that collaboration is the way of the future. “Many brokers do not understand that one plus one can be much greater than two ,” he explains. “They will generate more income for themselves as they grow future talent.” He adds that brokers who truly care about their clients will care about investing in the next generation.
COVID-19’s effect on commercial real estate has made brokerage more challenging. But LoCoco stresses that brokers with a bigger purpose than a paycheck will have an easier time overcoming short-term challenges. Kaduce, meanwhile, says that it’s actually an ideal time to enter the industry. He started his own career in 2009, when the market was facing major headwinds. That experience instilled in him a heightened work ethic. Working in real estate during difficult economic conditions “makes you a tenacious prospector,” he says. “You’ll learn a lot of really good practices that will serve you well in your career, and it’s nice to ride that upswing, too.”
JBDP participant Leigh, for one, has not been dissuaded by the present state of the market. To the contrary, he views real estate brokerage as an “art form” and looks forward to continuing his career in a field that offers ample opportunities for entrepreneurship and creativity.
At this time, “too many ‘best and brightest’ aren’t even aware of our little corner of real estate,” says Marans. But the status quo is slowly changing, thanks to initiatives like JBDP and efforts of forward-thinking brokerages to recruit, train, and mentor the next generation. SIOR and the SIOR Foundation are both strategically focused on identifying and guiding future brokers through scholarships and grants, initiatives like the Member Associate and REEX programs, and more. By nurturing the leaders of tomorrow, baby boomers can retire with a sense of security, knowing that the industry is in good hands.
Adam Kaduce, SIOR
Jerry LoCoco, SIOR
Grant Pruitt, SIOR