The Data Analytics Talent Gap In Real Estate Is Stoking Demand For MBAs
MBA jobs rise in real estate consulting, investment banking, private equity
MBAs are hot property in the frothy real estate market. As investors pump capital into commercial property, tempted by juicy yields while interest rates are at rock bottom, MBA job opportunities are exploding.
“As large institutional investors like the sovereign wealth and pension funds are increasing their real estate portfolio allocations, their demand for talented professionals grows,” says Stijn Van Nieuwerburgh, director of NYU Stern’s Center for Real Estate Finance Research.
Employers are big property developers, life insurance companies, private equity funds, pension funds, and sovereign wealth funds. “We are seeing a variety of opportunities,” says Kevin Riordan, a director at the Center for Real Estate at Rutgers Business School, where two private equity firms are snapping up interns.
MBAs also pursue careers with property consulting firms and in real estate investment banking.
Gilles Duranton, chair of the real estate department at Wharton School, estimates more than half of his real estate students work in PE or at banks such as Goldman Sachs. “There is overwhelming demand,” he says. The other half work at consultancy firms like McKinsey & Company, or real estate developers. “All of the top real estate development firms are hiring right now,” says Dustin Jones, director of the Baker Program in Real Estate at Cornell University.
Demand for data analytics expertise is stoking the fire. “They [employers] have a demand for financial modelling skills — an ability to analyze a real estate investment,” says Greg Hallman, senior finance professor at the McCombs School of Business, which runs real estate courses.
The surge of investment into property — $700 billion in 2015, according to US property advisors JLL — has made it a mainstream asset class alongside stocks and bonds, fuelling its appeal as a career. “Undoubtedly, the rise in urban real estate around the globe has brought widespread attention to the asset class,” says Lynne Sagalyn, founding director of the Center for Real Estate at Columbia Business School.
Matthew Cypher, director of the Steers Center for Global Real Estate at the McDonough School of Business, puts the growth in interest in real estate among MBAs down, in part, to banking losing its lustre.
“There has been a push back on the quality of life in investment banking. In real estate, there’s no 120-hour weeks,” he says.
Yet what motivates Jason Henderson, a Baker student at Cornell, who worked in property development consulting, is the tangibility of the asset. “It’s a very rewarding career, not just financially, but you get to see what you do on paper become a reality,” he says.
While most business schools are enthusiastic about the cyclical real estate sector, prospects will dim should another economic downturn take hold.
Andrea Heuson, professor of finance at University of Miami School of Business, is like many of her counterparts caught between caution and optimism. “People are complaining that prices are too high,” she says. “They’re not finding good properties to invest in because there is too much froth in the market — what people say is a precursor to a bubble.”
However, she says even in a recession jobs can be found: “If prices go down, investors see that as an opportunity.”