Tomorrow's real estate leaders will need new skills to deal with global financing, environmental obstacles and sophisticated marketing, a new private study says.
And to build those skills, real estate education programs should be dramatically revised, according to the study by Ferguson Partners Ltd., a Chicago consulting firm that specializes in real estate.
The study, which documents many changes in the real estate industry, calls for a new approach to real estate education by the year 2000. This education, the study says, should shift the emphasis away from finance and law in many real estate programs at the degree level of master of business administration.
The pendulum has swung back toward the need for a broad general education, before training in the specifics, the study says.
Tomorrow's real estate leaders, the study found, must be capable of dealing with global issues, complex financing that might involve foreign currencies, environmental issues, a political process that moves slowly, and the ever-present requirement for more sophisticated marketing.
Formal undergraduate training should involve the liberal arts, foreign languages, communications skills, computer skills, along with marketing courses and knowledge gained on the job, the study showed. In addition, there should be graduate training in general management and finance.
Why the change in educational focus? Real estate companies will be much larger. One example: the consolidation that involved Coldwell Banker, acquired by Sears, Roebuck, which expanded further by acquiring Schlott, a large real estate firm in New Jersey.
Many of the enlarged real estate companies will have international operations and must be staffed with managers who can deal with broader operations.
"The bigger firms will provide more services such as development of projects and the management of the projects," said Lynn K. Cherney, a managing director of Ferguson Partners. She pointed out that many more real estate firms would be part of giant companies like Prudential Insurance and Equitable Life Assurance. Also, there will be more control of real estate companies in this country by foreign owners.
All this, Miss Cherney said, will lead to a new type of career opportunity in real estate.
Since the companies will have international divisions or possibly be owned by a foreign company, they will need executives who '' are bilingual or multilingual and who understand how to deal with foreign cultures and foreign economic and political issues.
And since environmental problems will affect real estate even more in the future, the real estate executives of the year 2000 must understand issues like waste disposal, urban land use, recycling and pollution, to mention some, as well as use of fuel sources like nuclear and solar energy.
In the realm of public affairs, the problems of today will be magnified by the year 2000 because of the growing population and accompanying urban sprawl. These problems include taxation, already a major issue, traffic congestion, new roads and public transit, municipal needs like additional water sources and more sewage plants.
Institutional investors with large amounts of pension fund money to invest will be reassessing their investment strategy in real estate companies and putting more focus on real estate assets that perform soundly.
This will put an emphasis on improved financial management of real estate firms and the need for their treasurers to have broader relationships with banks, pension funds, foreign investors and other capital sources.
At the same time, corporate real estate departments, Miss Cherney believes, will shrink as the big companies continue to slim down their managements. That indicates the need for more help and consultations with outside real estate firms.
Miss Cherney points out that professors of real estate around the nation are well aware of these changes in the industry. "While other industries are looking for more specialized preparation for their field, real estate is bucking that trend, seeking managers who will have a well-rounded advanced education, she said."