NEWPORT BEACH, CA—According to a recent survey from national real estate recuiting firm RETS Associates, the existing wage gap between those with a master's degree and those with a bachelor's degree has grown by 50% in the top MSAs nationwide. In its 5th Annual Survey of Real Estate Financial Analysts, RETS, in association with Charles Schilke, JD, CRE, FRICS of the Colvin Institute of Real Estate Development at the University of Maryland, polled more than 230 financial analysts with up to seven years of experience from across the nation on their salary, education, willingness to relocate and more. In both the Pacific Northwest and Northeast regions, respondents who hold master's degrees have experienced a 15% increase in median annual base salary compared to 2015. In Texas and California, data reveals a 3% increase and 11% increase, respectively.

According to Elliott, financial analysts with a higher education and at least three to five years of experience are still in high demand, which has continued to push base salaries to the highest levels seen in this cycle. Additionally, survey results demonstrated a rising preference for growth potential as a top factor when considering a new position, since most financial analysts see the long-term career potential in the real estate industry. This preference increased by 3% in 2016—a significant boost compared to compensation, which grew by just 0.5% in the same year, but remains the number-one factor among job-seekers.

In recent years, analysts of all education and experience levels were in high demand, causing base salary packages to incrementally increase. Moving into the last quarter of 2016, RETS is experiencing a steadying demand for financial analyst talent and has completed 27 placements across the nation year-to-date and projects 40 by year end. This is comparable with the 42 searches the firm completed in 2015 and the 34 searches in 2014.

Elliott calls this a “migratory group” that is coming in fresh to the industry, and after four to seven years is ready to graduate from this segment and go out and get a “big-boy or big-girl job.” This group of people are also Millennials, and true to type, they have their eye on the next opportunity, on new blood. “This is one of the new entry points for new blood in our industry,” Elliott tells GlobeSt.com exclusively. “We look at our relationship with these candidates as a marathon, so we're always refreshing the database because maybe the next year they've moved on to asset management and are not in the financial-analyst category anymore.”

Here, more from our interview with Elliott on the survey's findings.

GlobeSt.com: Why does it seem the master's degree is valued so much more by CRE than the bachelor's these days?

Elliott: I think it solely comes down to one item: If I'm a young professional and I go back and get my MBA, my expectations on compensation are higher than if I am solely a bachelor's graduate. The real estate industry generally pays for experience more than it pays for education, but where we are in a very healthy cycle of our industry, you have the master's graduates with higher expectations because they've spent $40,000 to $70,000 a year getting their degree. Augment that with employers doing well, making money and wanting to bring sharp young talent into their companies, so they are more willing to pay for that talent now than they were during the Great Recession.

GlobeSt.com: Does this increased gap apply in certain areas of the industry or at certain levels?

Elliott: Our data points are focused specifically on that financial analysts' segment: pros with two to seven years' experience. It's a microsegment of the industry.

GlobeSt.com: Where do you see this trend heading?

Elliott: The gap will grow marginally, not with the same explosive growth we've seen over the last five years, but some small incremental growth. But the gap has reached a healthy point.

GlobeSt.com: What else should our readers know about your compensation findings?

Instant Insights /

Why the Premium for Master's Degrees is Rising in CRE

Related Stories

Recommended For You