Talent Trends in Real Estate – 2023

Industry TrendsFinancial ServicesPrivate CapitalReal EstateExecutive SearchBoard EffectivenessDevelopment and Transition
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三月 08, 2023
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Industry TrendsFinancial ServicesPrivate CapitalReal EstateExecutive SearchBoard EffectivenessDevelopment and Transition
Executive summary
Russell Reynolds Associates captured 4 developing themes that redefine the 2023 talent landscape.
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1. Short-Term Slowdown & Cautious Optimism

Overview

While we expect slower hiring and some clients are “pausing” recruiting mandates, there is no evidence of major adjustments to 2023 talent strategies

Impact

  • Two themes are emerging around functional demand:
  • An emphasis on Portfolio Management. Clients are “re-purposing” investment professionals into asset management, increasing analytical rigor of asset management and allowing investment professionals to apply skills in a new way, while more directly exposing asset managers to these individuals for collaborative learning across functions
  • Nearly 70% of global leaders are concerned about the availability of key talent, creating higher demand for cross-functional skills1
  • Portfolio Management roles are increasing in influence, positioning, and strategic input
  • Increase in using data analytics to optimize portfolios: This is generally a newly created role, particularly prevalent within private capital environments

 


 

2. Focus on Alternative Investments

Overview

Increasing attention to alternative asset classes such as manufactured and student housing, self-storage and single family residential.

Impact

  • We saw new fund launches in 2022 and expect this activity to continue into 2023, with over $250 billion in dry powder focused on the North American real estate market2
  • Infrastructure platforms embracing a cross-pollination of talent, in particular partnering with digital infrastructure and data center experts to capitalize on broader knowledge
  • Conversion of office and retail assets into other/more broad categories:
  • Historical office investors/owners seeking talent from mixed use, life sciences, health care and other asset categories in order to successfully re-position assets
  • Deep silo expertise is giving way to cross-asset class experience to support agility

 

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3. Rise in Debt Funds

Overview

Clients who are focused on driving transaction activity, especially in an acquisition stagnant market, are creating or enhancing capabilities within debt funds

Impact

  • Repositioning assets with floating interest rates puts pressure on owners. Debt funds are stepping in, refortifying the capital stack
  • In 2022, six new firms launched debt funds. Globally, over 30% of private real estate debt funds were raised by the top five firms3
  • Three themes are developing around debt funds:
  • Given higher productions over the past two years, we have seen an increase in compensation for originations talent
  • Demand for gender and ethnic diversity in an already limited talent pool
  • Increased attention on recruiting leaders with equity expertise who are open to applying their experience in a debt fund

 


 

4. Emphasis on Succession & Development

Overview

Clients are assessing board composition and C-suite executives in light of changing business strategies, while investing in talent development at all levels to increase retention

Impact:

  • Investing in existing talent creates three competitive advantages:
  • Enhances stickiness of high-quality talent through a demonstrated commitment to development
  • Focuses leadership on development needs and skill gaps in the organization, especially relative to changing environments
  • Demonstrates to mid and junior-level talent an emphasis on career development; many of these individuals have not seen a downturn and are anxious about their futures, thus the commitment is reassuring

 

 

 

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Talent Trends in Real Estate – 2023 | Full report

 

Previous reports


 

   

Talent Trends in Real Estate 2022

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Talent Trends in Real Estate 2022 – Shaping What’s Next

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Authors

Deb Barbanel leads Russell Reynolds Associates’ Real Estate practice. She is based in Los Angeles.

Kristi Walters is a member of Russell Reynolds Associates’ Real Estate Practice. She is based in Dallas.

Cameron Scott is a member of Russell Reynolds Associates’ Real Estate Practice. She is based in New York.

James Baek is a member of Russell Reynolds Associates’ Financial Services knowledge team. He is based in New York.

 

References

1 RRA Analysis, Global Leadership Monitor Q4 2022

2 Real estate investment trends and outlook: Winter 2023 

3 The Real Estate Debt 50 2022

 

 

 

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Learn More About the Authors and The Real Estate Practice