Millennials, a.k.a. “Generation We,” have permeated the commercial real estate industry. Not only has this 95-million-strong group become the topic of discussion in conference panel sessions and one of the leading consumer demographic groups, but it is also changing the way every asset class is run. As more of this group enters the workforce, CRE firms are noticing that their goals and approach to work vary greatly from their predecessors.
Fortunately, this change is for the good, experts tell Real Estate Forum. Millennials bring a fresh perspective and have helped every asset class reinvent itself after a dramatic and prolonged economic recession. They’ve ushered in the age of technology that has breathed new life into suffering categories. We asked the experts what the industry should know about the next generation of CRE professionals and what they can contribute to its growth.
What are today’s young CRE professionals seeking in their positions—what’s most important to them?
There are a few high-priority items that young CRE professionals look for when considering a position with a company, Lanie Rea, director of research for Stan Johnson Co., tells Forum. First is culture. “The days of corner offices and closed doors are, for the most part, gone. Young professionals want to be working for a coach instead of a boss, and they want to be able to collaborate in an open environment with their colleagues and even with senior management. They want to know that executives are accessible and their ideas and contributions will be recognized and, ultimately, rewarded.”
This group is also looking for mentors, John Combs, principal at RiverRock Real Estate Group, tells Forum. “Today’s young commercial real estate professionals have the technology knowledge, but they really strive to work at a firm where they can get training, one-one-one guidance where someone will take the time to mentor them. They also want someone who will collaborate with them and involve them in the process so they get hands-on learning.”
Michael McLean, a portfolio manager for PM Realty Group and a young professional himself, tells Forum when he first started his career, he was ambitious and eager to learn. He shares that he had a great, experienced mentor who showed him the correct way to do things while allowing him the leeway to achieve results in his own style. “Even now, eight years into my career, I continue to learn something new every day. I believe the most important thing young CRE professionals are looking for are opportunities to learn and advance their careers while being granted the flexibility to retain their identity.”
David Endelman, managing director for Savills-Studley’s strategic portfolio solutions team, says Millennials in CRE are no different in their work preferences than their peers in other fields. “They, too, are using more technology, seeking more meaningful, challenging tasks and are more flexible in terms of their work environment and benefits.”
Being recognized for their singular qualities is hugely important to this group, Chris Pesek, JLL’s director of integrated facilities management, tells Forum. “Millennials are drawn to corporate real estate work that harnesses their generation’s unique blend of professional traits: an entrepreneurial spirit, the desire to make a difference and focus on long-term skill development and career building. They value the flexibility and creativity of independent work, especially when it is coupled with the opportunity to contribute to larger goals. Ironically, our research shows that this generation has a low awareness of the opportunities that our industry provides for them to be able to do these things—so we have a bit of a branding challenge in demonstrating to Millennials that they should consider commercial real estate as a career.”
“Today’s young professionals have the technology knowledge, but they really strive to work at a firm where someone will take the time to mentor them.” —John Combs, RiverRock Real Estate Group
Erin Curry, director of human resources for Xceligent, tells Forum the next generation has different expectations about how they’re going to come up to speed in a new position. “They want to know what kind of technology they’re going to use; how they can use it; what kind of laptop, iPad or cell phone they’re going to get. It’s all about immediate connectivity to people and resources. They’re tech savvy, and they expect to know how quickly they’ll be able to get established. They want to get into real estate because of the financial rewards that are there, but ambition looks very different these days. Taking three to five years of building a book of business and relationships—the next generation doesn’t have patience for that.”
Robert Sevim, executive managing director of Savills Studley, agrees that Millennials don’t have much patience. He points out that career timelines vary greatly in different fields, from law and banking to the agency world to technology, but young professionals don’t want to wait to advance in their careers. “The CRE environment has to be thought of in a different manner. There are levels of trust; you’re building up intellectual capital so you can provide a high level of service and advisory to the client. There’s a much longer viewpoint to establishing levels of success.”
Flexibility and stimulation are two of the most important goals to young professionals, Alexandra Glickman, area vice chairman and managing director/practice leader at Arthur J. Gallagher & Co., tells Forum. “Being able to be part of a team and being constantly stimulated matters to this group. So does quality of life and being there for your family—it’s no longer just for women. When I started 31 years ago, it was very Darwinian, but I see less risk-taking in this generation than I saw in previous generations, and that’s not necessarily a great thing. Maybe it’s because everybody under the age of 35 had to wear a helmet when they rode a bike and had a cell phone, and their parents knew where they were every second of the day. But, a lot of people in this generation saw their own generation go through immense heartache over the last 10 years, so going right out and taking a risk is not the first thing that comes to their mind. This is a generation that played youth soccer and had their desks put in a circle and were told to solve the problem collectively, which is, I think, very healthy—most good business is won and maintained based on team-based problem solving.”
“The most important things young commercial real estate professionals are looking for are opportunities to learn and advance their careers while being granted the flexibility to retain their identity.” —Michael McLean, PM Realty Group
Rea agrees that Generation Y and Millennials value flexibility, and this can come in many forms. “In today’s modern, mobile world, work can happen from a coffee shop just as easily as it can from a cubicle. Many young professionals feel burdened by the antiquated 9-to-5 routine, so simple perks like being able to adjust their hours based on a long commute or having flexible work spaces in an office or hoteling stations where remote employees can drop in all have far-reaching benefits.”
The one trait that stands out for Jana Turner, a principal with CRE executive-search firm RETS Associates, is that young professionals are looking to get ahead. The firm recently completed a survey of Millennials in the industry, and the opportunity to advance beat out compensation, location and culture as their top priority. “Growth potential is absolutely, bar none, the number-one thing they’re seeking, followed by compensation and location,” Turner relates. “This holds true in our interviews, too. We constantly get asked about the growth potential, the succession plan. They ask, ‘How long do you think I’d have to be in this position? What could I go into next with this skill set?’ ”
Rosemary Scanlon, the divisional dean of the NYU School of Professional Studies Schack Institute of Real Estate in New York, tells Forum young CRE professionals are basically seeking the kind of work they want, as opposed to just any job—very different from a few years ago during the recession. “We’re in a strong recovery, not just in finance and investment, but development is also strong. Our graduates are hoping they can get into a firm to do the kinds of things in which they’re interested, whether it’s refurbishing of old buildings, building affordable housing or getting a post with one of the big developments that are in progress.”
Scanlon points out that an increasing number of foreign students are coming through her institute, indicating a growing interest from young people overseas in working in commercial real estate, but here and abroad. In fact, nearly 30% of the 660 graduate students enrolled at the school this fall are international: most are from China, the second-largest group is from India, and several are from Canada, Latin America, Central America, the Caribbean islands and Europe. A total of 48% of new students in the programs this fall are foreign, she adds. “It’s a highly diverse group of people.”
What should managers know about this cohort before hiring them?
Companies need to realize that Millennials are less interested in building their careers with one company and are more interested in building their careers, period, says Curry. They are not concerned about shifting to a different firm if it offers them more opportunity for advancement. “Companies need to work on being continually attractive and allow employees to build their résumés in their company. I’m seeing resumes where there’s an employment change every two to three years. People aren’t looking at one company to help them build their résumé and knowledge base—they’re looking to other companies to do that—and firms need to realize that’s not a negative. If they want to retain talent, they’re going to have to change with that person and create opportunities that enable that person to grow.”
“The CRE environment has to be thought of in a different manner. You’re building up intellectual capital so you can provide a high level of service and advisory to the client.” —Robert Sevim, Savills-Studley
Curry adds that having an open dialogue with the employee to ask what their professional goals are is key. “They may find a fit where the company can grow along with the employee as well as make strides in their market. Ask, ‘Where do you want to be in the next year? In three years? What are your professional and personal goals?’ As companies seek to grow in an industry, tapping into the personal goals of those individuals can be a win/win.”
It’s important for hiring managers to outline potential growth opportunities and keep young professionals stimulated and challenged from day one, says Endelman. “They want to be pushed, and they want to be respected and trusted.”
Contrary to popular belief, Millennials can be very loyal—companies just have to earn it, says Pesek. “Young professionals tend to ‘work for themselves’ even when they work for a large company, and the most successful Millennials take the driver’s seat of their own career, rather than accepting ‘that’s just the way things are done.’ The traditional corporate ladder has no appeal to this generation; they prefer to have the option to zigzag as they develop skills, interests and capabilities. However, they crave a clear roadmap that shows a variety of paths for advancement.”
Pesek adds that the best way to attract and retain high-performing Millennials is to offer multiple career progression options, all clearly identified. “This generation, much like Gen X before it, values opportunity over title; they are quick to respond and excel when offered coaching and mentoring programs. For that purpose, we offer extensive online career-mapping tools and actual biographical success stories that show the many different paths our senior executives have traveled to get to their current positions.”
“I see less risk-taking in this generation than I saw in previous ones, and that’s not necessarily a great thing.” —Alexandra Glickman, Arthur J. Gallagher & Co.
Sevim says identifying those candidates who have the capacity to put in hard work with no shortcuts is essential. “It’s still a business grounded in local market knowledge, relationship building, trust and integrity—putting in the hours and listening to mentors.”
Scanlon says hiring managers should make sure finance/investment candidates they’re considering are not only skilled in financial modeling, but can also think critically apart from the numbers. “We don’t want robots who just know how to insert numbers into a spreadsheet. We’re training people to think about the assumptions that go into it. There’s a lot of emphasis on the analytic part and the thought that goes behind it. “
It’s important to realize that what motivates a 55-year-old professional is very different from what motivates a 25-year-old, says Glickman. “Companies need to understand that working hard doesn’t necessarily mean being a slave to a job. Plus, interviewers need to really flesh out how well-rounded a candidate is. I’m seeing a lot of people who look great on paper. One 24-year-old woman said she literally calls her mother every day to ask for her advice. Having the ability to problem solve individually is something that both interviewers and interviewees need to think about. And people get their feelings hurt very quickly. You don’t get a gold star and a trophy just for showing up.”
Being well prepared to discuss their organization, the growth plan and culture is important for hiring managers, says Turner. “They need to be able to say what the company’s going to look like in three to five years, understand what that means to that candidate and what they can offer them in terms of movement up or from.”
Young CRE professionals are looking for vibrant cultures, a high level of engagement with leaders, work/life balance and a work environment with integrated technology, says Combs. “They prefer to work at a firm where professionals are encouraged to recommend solutions to disrupt the platform and deliver more efficiency via technology.”
The most important thing hiring managers should know about today’s young professionals is that they are very capable of outstanding performance, says Rea. “Those in Generation Y and the Millennials grew up with technology. They understand today’s global business world even if their résumé doesn’t prove it. They are capable of being taught almost anything, and they have the knowledge of tools at their disposal to help them be successful.”
However, these young employees don’t necessarily work the same as those in previous generations—they are not the professionals who worked heads down, 9 to 5, rarely took vacation or family time and retired from a company after 30 years, Rea adds. “Rather, these new employees are the think tanks of tomorrow. They will use all of their vacation time each year because they value the mental break. They’ll have a tendency to job-hop if they aren’t being developed and challenged; they’ll check their Facebook status several times a day, multi-task during meetings and answer your emails at 2 a.m.”
McLean sums up his cohort’s zeitgeist as the following: “We, as today’s young commercial real estate professionals, are really no different than any other generation. We have a strong work ethic; we are independent, educated and self-motivated; and we are looking for a position that allows self-improvement and the ability to grow. Technology and the depressed economy over the past half-decade may influence our decisions in where we live and how we work, but I do not believe we are that different from preceding generations. Technology, a resurgence in urban densification and the ability to evolve and adapt quickly to changing environments describe the next generation.”