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Unlike many of its counterparts, real estate investment company Madison Capital is expanding. The firm has recently moved into larger offices here to accommodate its growth. It has recently filled mid level positions and is on the lookout for a more senior person. But the search criteria for this position, as outlined by Ward Dietrich, a senior executive with the company, does not hold out much hope for the large majority of financial engineers that are seeking new employment.

“I have spoken with a few people coming from larger institutions but didn’t feel as though it were a match,” he tells GlobeSt.com. “These were primarily people who originated CMBS and CDO structures. The [underwriting] standards they were used to working with were lax. We didn’t feel comfortable that they could deploy capital in an environment where the underwriting has gotten so much stricter.”

Ideally, he says, the firm is looking for somebody with a strong credit background, fundamental real estate experience and a person that can develop relationships and find deals on his or her own, “somebody who is not emotionally invested in a big company bureaucracy; somebody more entrepreneurial in spirit.” In short, somebody whose skill mirrors the needs of the few pockets of growth in the real estate debt and equity markets.

As unemployment continues to worsen on Wall Street, especially among firms that provided capital for real estate transactions, these laid off executives are trying to recast themselves according to what the market now demands. In most cases, the once high-ticket CMBS origination skills have become virtually worthless. But trying to determine what is in demand is difficult, given the scarcity of deals that are coming to market.

“If you look at the so-called good news in the industry – raising funds to buy distressed debt, for instance – you will see that there are very few employment opportunities available,” Robert Baron, president of American Real Estate Executive Search Co., tells GlobeSt.com.

“From an employment standpoint there still haven’t been a lot of transactions because assets haven’t been repriced – the institutions that initially underwrote these assets have been reluctant to write them down still. So you will hear about a fund is raising money and you ask if they are building out staff. You find out that it is just one person and his cell phone for the moment because until the fund draws down the money it won’t get any asset management fees.”

Even firms that are expanding servicing – another area considered to be a growth candidate – are not really hiring, he adds. “The defaults rates are not that high yet, so they haven’t had to hire anyone yet.”

The good news is that, anecdotally at least, there are signs of a thaw here and there. “I am seeing new opportunities for people in this field,” Scott Slabotsky, a managing director with CBIZ Accounting, Tax & Advisory Services, tells GlobeSt.com. “Certainly not like it was 18 months ago, but among opportunistic funds and other companies that are making acquisitions now, I am seeing some [employment] movement.”

Victor Arias, sector leader of Korn/Ferry’s real estate group, agrees that acquisitions, especially among equity providers, is one relative bright spot, although in many cases it is being filled by talent that has been moved out of a debt operation. “There is so much capital out in the market now that it is natural there would be a higher emphasis on acquisitions people,” he tells GlobeSt.com.

One area that shows promise is portfolio and asset management, Baron says. “Now you have to actively manage your portfolio in order to make money in real estate. You have to operate the property and be strategic about it — lease rates are not automatically going up and there are areas of stress in some of the portfolios.”

Another promising area is fund-raising – but only for those people who have experience tapping capital from pension funds, he says. Pension funds are still investing in real estate, Baron says, “but they are leaning towards established fund managers.”

The ideal job hunter in this market, he says, is someone who can prove he or she is a good operator, yet still a financial engineer. “Managers that relied on highly leveraged structures and taking advantage of cap rate compression are passed over, and quickly.” Indeed, he says, pension funds these days are vetting a manager’s past transactions – but using today’s underwriting standards. “If the deals they put together a few years ago don’t make sense in this environment, they are simply not interested in doing business with you.”

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