Salaries for executives in top commercial real estate positions in the Greater Toronto Area increased an average of 15 per cent last year as the “candidate-driven market” continues, says Dan McLeod, senior director, property and facilities management recruitment at Hays in Toronto.
In commercial real estate “we’ve seen a huge rise,” in salaries as employers must pay more than expected to find the top people they want.
The highest percentage increase in salaries was for high-end commercial real estate lease administrators in the GTA – up 33.3 per cent from $75,000 in 2021 to $100,000 in 2022.
The numbers are from the 2023 Hays Salary Guide, which was released recently. It was based on a survey of 5,490 employees and employers in several industries in Canada, including real estate, conducted from Sept. 22 to Oct. 16, 2022.
Hays’ real estate clients include Allied, Colliers, Brookfield, Morguard, Fitzrovia, Rhapsody Property Management and Tricon.
Some key salary survey findings
Among the study’s findings were that 58 per cent of respondents across the board intend to ask for a pay raise in the next 12 months and 37 per cent are expecting a raise of more than five per cent.
However, only 20 per cent of employers plan to offer an increase of this amount.
The survey also found 62 per cent of employers are having difficulty filling open roles.
“It looks like it will be another challenging year when it comes to the recruitment front,” McLeod notes.
The effects of COVID-19, not inflation, are the biggest driver of salary increases, he says. However, he doesn’t expect salaries to continue to increase at the same torrid pace as in 2022: “I expect there to be some sort of levelling out.”
There are fewer candidates for some positions than there were six to 12 months ago, he says. As a result, companies are paying more to find the right people or to retain existing staff.
“If you can pay a little bit more, you can be equitable within the market (and) you’re probably going to do a better job keeping your staff,” he says.
Motivators for seeking new employment
The study found the main motivators for considering a new job are higher compensation (51 per cent), opportunities for promotion (28 per cent) and new challenges (21 per cent).
Just under one-third of employees (33 per cent) would leave their current job if the economic situation was better. Similarly, almost a third (32 per cent) of employees are nervous they could lose their job because of the current economic situation.
While property managers, maintenance workers and other on-site staff cannot work from home or remotely, real estate employees in administrative and corporate roles that do not need to be in the office or on-site “are very much looking for remote work or hybrid,” McLeod says.
Overall, the study found 82 per cent of employees want either fully remote or hybrid work. However, 32 per cent of employers are planning to increase the amount of time people are required to be in the office.
“That makes for a very interesting year moving into 2023,” he says, noting conflicts may arise between employers pushing to have people back in the office full-time or nearly full-time and employees who refuse – and look for remote or hybrid opportunities with other companies.
McLeod adds that for companies which require a full-time presence in office, “we are finding it tough now to find a really great pool of candidates.”
Vacation times can vary
The study also found increased vacation time is the top benefit candidates are seeking, followed by support for professional study, retirement contributions and mental, physical and well-being programs.
Three-week vacations have become the norm across the board in real estate, but junior staffers may only get two weeks. Four weeks of vacation time is a minimum for top-level executives, McLeod says.
The study shows salaries on the commercial real estate side are almost always higher than on the residential real estate side.
For example, for commercial real estate, high-end salaries for a director of property management increased to $180,000 in 2022, up 20 per cent from $150,000 in 2021. On the residential side the same job paid an average $160,000 in 2022, up 14.29 per cent from $140,000 in 2021.
High-end salaries for senior property managers on the commercial real estate side were up 16.67 per cent from $120,000 in 2021 to $140,000 in 2022. By comparison, on the residential side salaries for the same position were up 15.79 per cent from $95,000 to $110,000.
Strangely enough, “commercial clients don’t like anyone from residential and residential clients don’t like anyone from commercial,” McLeod says, and there is not a big cross-over between the two asset classes. “It’s weird – they’re very similar jobs.”
Much of the hiring will be on the residential side for everything from maintenance to management roles, given the large amount of residential development in the GTA, he notes.
“So many new buildings and high-class luxury rentals will be on the market for 2023 that will want top people,” McLeod says. “If they’re paying top money, people will be interested in moving from where they are.”