Wall Street Stint Seen as the Road to Big Bucks

The future model real estate executive is most likely to have both Wall Street and real estate experience--and a few bruises and scars from having structured mergers and acquisitions.

Those with such experience should be in very high demand, with annual salaries as much as $500,000--ironically, about what some second-string shortstops make.

The constantly changing real estate market, perhaps taking a note from Japanese buying habits and realizing anew how lucrative real estate assets really are, will seek out those whose skills include excellent realty knowledge and corporate finance experiences.

Hiring of such specialists will be done by those companies with “very deep pockets, which have targeted firms with real estate assets,” suggests Lee Van Leeuwen, managing partner of Korn/Ferry International’s National Real Estate Division, based here.

“Developers who survived the economic roller coaster of the previous decade have emerged as better-financed and better-managed than any in the past. That means more career stability for development executives, but future compensation packages (will lack) the ‘equity’ participation formerly so common to these packages. Instead, equity will come in the form of stock options, a further sign of the restructuring that has transformed the industry.”

He delivered this message to an apt audience, graduates of the master’s program in real estate development at the USC School of Urban and Regional Planning.

He listed five real estate career specialties on their job horizons. In addition to merger and acquisition specialists with realty experience, Van Leeuwen added asset and property managers, controllers and chief financial officers and professional construction managers with business degrees.

He told the graduates that as future real estate executives, they would be employed by “bigger, better-financed” developers, but that they will have fewer chances to take part in project equity, for years a lucrative element of compensation.

In the wake of mergers and consolidation within the industry over the last decade, fewer and larger firms dominate the field. Smaller, entrepreneurial builders are a much smaller factor now, yet consolidation, he added, offers financial institutions new opportunities, which are becoming a major force in the development field.

For instance, realty management has become a much more professional undertaking, supplanting--in so many cases--its secondary role in the general order of importance in a company’s pecking order of divisions. The increasing numbers of undergraduate and graduate college degree programs in real estate will supply candidates for that field.

Van Leeuwen also cited a very topical concern.

Those in the development and real estate fields who fare well in obtaining public approvals for residential, commercial or industrial projects “in a political environment marked by strong political resistance to growth” also will be in high demand by job recruiters, he said.

In the current no-growth, anti-growth, controlled-growth and the “pull up the anchor, I’m aboard” philosophies, those who succeed within that development mode should move to the head of the class.