Real Estate Alert: Market Slump Puts Bigwigs in Play

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Reprinted from Green Street's Real Estate Alert:

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The decline in property valuations and sales activity has created a rare window of opportunity for firms aiming to pick off once unmovable senior investment professionals, recruiters say.

The so-called promote — the equity share on deals offered to senior-level acquisitions, development and some asset-management staffers — typically serves as a retention tool. Pros forfeit those gains when they jump ship, and so prospective poachers often must provide some form of compensation to win over candidates. But for the most experienced investment specialists with outsize promotes, that can be prohibitively costly.

However, as property values have dropped, “a lot of those promotes have significantly decreased or vanished,” said Kent Elliott, principal at RETS Associates. “Real estate staffers no longer have the golden handcuffs to keep them at their existing employer for the long term, and so it has become an opportunity for them to put their periscope up and look around in the marketplace.”

That could put more high-value specialists in play than the market has seen since the global financial crisis.

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