One of the most consistent human capital challenges in commercial real estate is the skill gap observed in mid-level management. Nearly 9 out of 10 CHROs report visible leadership and managerial shortcomings at this level, and three-quarters state that addressing these gaps is either extremely or very relevant to their organizations. For an industry that depends on execution discipline, client relationships, and long-cycle asset strategies, underdeveloped management capability at the middle tier represents both a performance risk and a missed opportunity for organizational leverage and retention. People do not leave jobs. They leave bad managers. Several CHROs mentioned that enhancing leadership capabilities in mid-level managers often comes down to training and mentorship. One opined, “When leaders are promoted into their role to manager because of technical capabilities, we must support their development into being a leader, which requires a different skillset.”
Findings suggest that larger company size amplifies the problem. As firms grow, the relevance of mid-level skill gaps increases, highlighting the need for more structured leadership development and targeted capability-building efforts. In smaller firms, gaps may be masked by lean structures and close oversight by senior leaders. But as headcount and complexity rise, the ability of mid-level managers to think strategically, develop talent, and communicate with clarity becomes a critical determinant of performance and culture.
When asked which capabilities were most lacking, CHROs cited coaching and talent development (61%), strategic thinking (58%), communication (50%), and delegation and prioritization (48%). These skills are core to scaling organizations, engaging talent, and executing complex investment and operational strategies. Weaknesses in these areas often translate into teams that underperform, high-potential employees who disengage, and senior executives who are forced to spend time in the weeds.
The CHRO’s call to action:
- Integrate leadership expectations into performance management: Hold mid-level managers accountable for people leadership to ensure skill development translates into daily practice.
- Build a culture of coaching and feedback: Encourage managers to adopt coaching mindsets supported by tools and training to increase engagement, retention, and long-term capacity.
- Invest in training: Particularly for first-time people managers, provide skills training to actively bridge gaps, anchored in the company’s strategy.