WASHINGTON, DC-Many commercial real estate firms are woefullyunprepared for an event that is absolutely sure to happen: the departure, whether planned or not, of the chief executive.Succession planning, in short, is an area thatcompanies in this sector need to improve, according to a survey bythe Urban Land Institute and RussellReynolds Associates.
The survey found that 89% of senior executives queried do nothave adequate CEO succession plans, and nearly one-third do notfeel confident that their firm could immediately select a new CEOif necessary, according to the report, “Avoiding Vacancy: Becominga Succession Leader in the Real Estate Sector.” There are a numberof reasons why this is so but they essentially boil down to twofactors, ULI Chairman Peter Rummell tellsGlobeSt.com: cultural and timing.
The former refers to the entrepreneurial origins of mostcommercial real estate firms, he says. “These are firms headed byone man or woman and if, let’s call him Fred, is not concernedabout picking a successor then it won’t happen.”
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
