Five Key Trends Impacting Real Estate Leaders in 2024

1. Compensation as a Performance Indicator

Across the real estate industry, compensation structures serve as a vital performance indicator. Firms are considering how to not only retain top performers by matching strong performance with healthy financial incentives, but also reset the benchmark for average performers. We continue to monitor how compensation fluctuates.

2. Real Assets Talent with Private Markets Mentality

There is a spike in demand for real assets talent with a private markets mentality. Real estate, infrastructure, and private equity industries start to blend with the growth of data centers, marinas, airports, etc. Investors that can look at debt and equity opportunities from the traditional PE, through PERE, and infrastructure (and their associated costs of capital) angle are well positioned to take advantage of current market opportunities.

3. New Leadership for Heightened Level of Competitiveness

The evolving landscape and heightened levels of competitiveness require new leadership. Firms need to place greater emphasis on robust, multi-year succession planning to de-risk C-suite transitions. They are also working to attract diverse talent, assess next generation talent, and retain top talent who can lead into the future.

4. Evolution into True Investment Management Platforms

We are amidst the evolution of the real estate owner/operator/developer into true investment management platforms. In response, firms are hiring for chief investment officers, capital formation team, portfolio managers, etc. There’s also growing interest from LPs who want to invest their capital directly with operators, cutting out the allocators.

5. Creative Options to Invest Capital

As investors seek more creative options to invest capital against the backdrop of a more challenging fundraising and deal environment, we are seeing soaring demand for senior capital raisers and distribution professionals experienced in co-investing, structuring separately managed accounts, GP stakes, secondary sales, and fund structures.

Authors

• Deb Barbanel co-leads Russell Reynolds Associates’ Real Estate practice. She is based in Los Angeles.
• Gemma Burgess co-leads Russell Reynolds Associates’ Real Estate practice. She is based in Chicago and New York.
• Cameron Scott is a member of Russell Reynolds Associates’ Real Estate practice. She is based in New York.
• James Baek is a member of Russell Reynolds Associates’ Financial Services knowledge team. He is based in New York.