UpWind Real Estate Partners spent time with Chris Papa (Founder) and Lisa Flicker (Head of Real Estate) at Jackson Lucas to get a better pulse on recruiting dynamics in the real estate market.
Interview Highlights:
What was the catalyst for founding Jackson Lucas?
Chris: To better serve our clients and create a best-in-class culture focused on building deep relationships.
Lisa: While I was not a founding member, I was attracted to the results-oriented approach. We are producers.
If you were to start all over, what would you do differently? How do you compliment one another as business partners?
Chris: I would have had Lisa join day one. We are both big thinkers and doers. We both love what we do. Lisa is always meeting people and has a firm grasp on the market.
Lisa: Chris is strong on execution, and he can break down the process into steps for the client and candidate. It also helps that everyone knows Chris.
How has the recruiting industry evolved since the introduction of LinkedIn?
Lisa: Before LinkedIn, the industry was very secretive and confidential. Recruiters operated in a black box. Today, there is much more connectivity and the ability to scale and meet with people has dramatically improved, but it also lowered the barrier to entry for many new recruiting firms.
Chris: I started as a researcher. It was harder to know where people worked and what the person’s responsibilities entailed. Many firms will use LinkedIn for low hanging fruit to hire people directly, but the platform makes the candidate pool feel limitless. Similar to buying a house, it is helpful to have a broker that understands the market. Recruiters offer a very similar value. We know the people who are not looking and may be open to an assignment. Most executives won’t look for an assignment without a recruiter.
When you approach a new search, what questions or filters do you use to determine if a candidate is a good fit for the role?
The obvious requirements for the candidate or firm:
The hard part is vetting the candidate’s soft skills to determine a fit with the client culture. To do this, we either know them or we’ve been referred to by several sources.
What are the labor trends happening in real estate in 2024? How does this compare to the past few years?
We expect to be engaged heavily in September, but right now, most firms are trying to get through the summer. There have been a few performance related exceptions. We heard an entire asset management team was let go because the executive team did not feel they were getting the performance they needed from the properties. The same can happen on the acquisition and capital raising front.
Acquisition searches have dropped, but capital raiser demand began to pick up. This is a strange year given the macroeconomic environment, which has paralyzed a lot of decision making. We expect a lot of musical chairs and anticipate an even mixture of firing / leaving / hiring in 4Q24.
Has compensation gone up or down? Less cash / more carry?
It depends on the role and individual. Right now there is considerable demand for capital raisers with a track record and a proven relationship network. Senior capital raisers are seeing base salaries range from $500K to $1.2M, which excludes performance hurdles. Strong performers can name their price.
In a healthy transaction environment, proven acquisition leaders typically earn the most in a real estate organization, however, given market dynamics, search activity and compensation for acquisition personnel is down. Last year, there was a race for debt originators, but those searches have died down.
What is the typical profile of real estate managers Jackson Lucas works with?
We do everything from the largest global companies to family offices with $1B in AUM. Our specialty is vetting C-Suite executives for soft skills. We take a consultative approach focused on results.
Given the challenges of the real estate capital markets, how are managers thinking about performance-based comp?
We will have a better answer for you in September. Last year managers went through employee rosters with a fine-tooth comb. They drilled into the talent to decide who earned pay raises instead of providing a blanket 3% increase. On the hiring front, firms are offering more equity, however, many candidates saw their equity get wiped out in the last cycle, so there has been a push for more guaranteed cash compensation.
What advice would you give to those considering a change?
Read the tailwinds in terms of capital flows, product type, and the potential impact to the broader macroeconomic landscape following the election.
What are your clients most worried about in the current cycle from a talent management perspective?
The first priority is retention. The second priority is recruiting candidates that they couldn’t get before because their equity has been eroded.
Any positive hiring trends to highlight?
Acquisition roles are beginning to pick up relative to last year.
The emergence of niche real estate managers that are looking for young and hungry talent.
Firms are studying compensation data to ensure they can be competitive on talent retention.