2024 Real Estate Recap: A Year of Defensive Strategy and Operational Focus
As a real estate executive search and consulting specialist, Resolution Search sits at the nexus of leading market participants and the talented professionals who make up the backbone of their organizations. Our vantage point gives us a valuable perspective on the forces driving strategy and the resulting hiring trends. In reflection, 2024 felt like the New York City talent market was treading water. Rising interest rates affected the viability of new development investments and negatively impacted capital-raising efforts. Hybrid work became the new normal, and the 421-a tax abatement expired without an adequate replacement (see 485-X). As has happened in past cycles, when investment activity slows down leadership focuses on driving N.O.I. and profits through more effective execution of asset-specific business plans and by taking a hard look at corporate overhead. Unsurprisingly, the resulting shift in focus leads to an increase in search mandates concentrated in the areas of Asset Management and Finance & Accounting.
EQUITY ASSET MANAGEMENT
Since 2021, over half the search mandates our team has managed have been within the asset management vertical. On the principal side, clients were most interested in professionals who possessed hands-on experience. Professionals who actively executed business plans either with JV partners or directly themselves through third parties stood out among the pack and were in demand. Property management also saw increased activity as a knock-on effect of this focus on execution.
DEBT ASSET MANAGEMENT
The rising rate environment led to lots of pain in the credit sector. “Extend and pretend” and “Survive until 25” were common mantras. The impact on the market for talent was again an emphasis on asset management professionals, specifically those with prior principal experience or direct restructuring exposure.
FINANCE & ACCOUNTING
It almost always holds that when the markets go sideways, CFOs end up on the wrong side of management reorganizations, especially within vertically integrated owner/operators or boutique RE investment firms, a core constituency of Resolution Search.
Our team managed several CFO mandates where clients prioritized candidates who could add value across their organizations from accounting, technology, risk mitigation, or capital markets perspective. Preference was given to individuals with strong operational experience, strategic business planning, exposure to capital markets, or the ability to add value in asset management.
IN ADDITION…
Though the market this past year has clearly emphasized the asset management and finance & accounting verticals, other functions also saw activity, just not at the same levels. Specifically, the verticals of capital raising and investor relations, which is not surprising given the difficulty many groups have had raising both debt and equity – whether on a deal-by-deal basis or within a traditional discretionary fund format.
In conclusion, 2024 was a year of playing defense in real estate. Companies hunkered down, focused on operational efficiency to increase overall N.O.I., and sought out versatile professionals who could add value across multiple domains. It wasn't the most exciting year, but it kept us on our toes.
Be on the lookout for our Outlook for 2025 in the coming weeks as we connect with industry thought leaders post-election...