As the New York real estate market softens and the economy slows, the real estate job market continues to cool.
Several large firms and developers have announced layoffs in the last few weeks, and the number of state real estate licenses issued to residential and commercial brokers has declined by nearly 10,000 in the past year. Many real estate professionals who are still employed are shifting gears.
In response to the economic slowdown, CB Richard Ellis made what a spokesman called “minimal” reductions to its staff in New York City in October as part of a firm-wide round of layoffs. The spokesman refused to give specific numbers.
Meanwhile, Cushman & Wakefield cut 200 jobs worldwide in October out of a staff of about 15,000. Earlier in the month, Massey Knakal Realty Services cut a quarter of its staff. Firm CEO and co-founder Paul Massey Jr. maintained the reduction was not motivated by economic turmoil.
On The Real Deal Webcast, Pamela Liebman, president and CEO of Corcoran, said, “There are certain jobs that if you are not doing as many deals, then maybe you don’t need as many people in certain areas of the company. So we’ve done some nonreplacements [and] lost people through attrition. And little things that we do — we have massage therapists that were coming every week — they’re not coming in every week anymore.”
Developers have also begun shedding staff as development slows. Extell Development said in November that it has cut about 10 percent of its staff as its pace of development declined. Tishman Speyer and Forest City Ratner have also cut employees, the New York Post reported.
The number of active broker and real estate salesperson licenses recorded by the state dropped by nearly 10,000 in 2008, which could mean that fewer people are taking the licensing exam or renewing their licenses at the end of the two-year expiration period. There were 146,293 active licenses at the end of October this year, down from 155,055 active licenses at the end of October 2007, according to figures provided by the Department of State.
Firms may also be freezing or slowing hiring. Commercial real estate job postings on eight job boards declined from 1,085 in June to 591 in August, according to the fall 2008 SelectLeaders/Cornell Job Barometer survey of real estate hiring, which includes both regional and national data. In August, 11 percent of the commercial real estate jobs posted were in New York, compared to 17 percent in June.
Barry Hersh, an associate professor at New York University’s Real Estate Institute, said a growing number of people are contacting him after losing real estate-related jobs on Wall Street or in development organizations.
College seniors seeking work in real estate finance are in less demand, said Barbara Hewitt, senior associate director at the University of Pennsylvania, who works with undergraduates at the Wharton School of Business. Some employers have cancelled at recruiting events, Hewitt said, and others are still running numbers to see how many people they can afford to hire this year.
“The meltdown of the financial markets has certainly impacted students who are doing real estate investments,” Hewitt said. “A lot of the smaller organizations are not coming [to recruit].”
Kenneth Patton, director of the Schack Institute of Real Estate at NYU, said the program has seen an increase in the number of full-time students, from 12.5 percent in the spring semester to 17.5 percent now. The shift could be an indication of layoffs hitting the industry. “A part-time student is working, gets laid off, so he decides to get this behind him and go full-time [to] defer being in the job market,” Patton said. “[We] see more of that.”
Some firms, however, say they are maintaining staffing levels or expanding. Platinum Properties, a brokerage that specializes in the Downtown market, recently moved to a new office and hired 10 people, most of whom are new to the industry, said CFO Dezireh Eyn. They will begin in residential rentals and, after a few months, move to residential sales and commercial real estate, Eyn said. Olinda Turturro, director of recruiting at Bond New York, said she has continued to recruit as usual, often among people who are new to the industry.
Professionals with an accounting background may be in demand because of the economic meltdown, said Patton.
“Some of the boring fundamentals that we’ve been teaching, like how to analyze a location, how to analyze an economy, how to really read a pro forma spreadsheet … all those old evaluation techniques are suddenly very much in demand” among employers, said Patton, who added that four or five of the NYU program’s adjunct professors have been hired away this year by companies looking for advice about how to deal with the slowing economy.
But Hersh said he thinks real estate employees will change positions rather than skills. “People might shift over from the acquisition part of a company to the management side, to keep buildings occupied, to keep tenants happy … in mortgages; it might be mortgage servicing rather than mortgage origination … management is king.”