REAL ESTATE MANAGEMENT JOB ANALYSIS EXECUTIVE SUMMARY

REAL ESTATE MANAGEMENT JOB ANALYSIS EXECUTIVE SUMMARY August 2015

ACKNOWLEDGEMENTS IREM would like to acknowledge PSI Services LLC and thank IREM s volunteers for their guidance throughout the job analysis process. Specifically, we would like to thank the subject matter experts who volunteered for this project. Over 1,400 real estate management professionals participated in this study as Task Force members, Pilot Survey reviewers, Survey participants, and Test Specification Committee members. We have deep gratitude to the members of the Task Force and Test Specification Committee for their insight and leadership. The contributions of each subject matter expert were essential to the quality of the job analysis. We would also like to thank our consultants at PSI Services LLC for all their efforts in conducting the job analysis and helping prepare the information in this executive summary. Dr. Rory E. McCorkle, VP Certification Services Beth Kalinowski, MBA, Director, Client Services Certification Siddiq Kassam, M.S, Client Services Certificaiton Melissa McElroy, Client Services Analyst Certificaiton PSI Services LLC 2950 N. Hollywood way, Suite 200 Burbank, CA 91505 USA For Additional Information: IREM Headquarters Phone: 800-837-0706 430 N. Michigan Ave. 312-329-6000 Chicago, IL 60611 Fax: 800-338-4736 Internet: www.irem.org E-mail: getinfo@irem.org 2015. Institute of Real Estate Management. All rights reserved. This document contains information that is proprietary to the Institute of Real Estate Management (IREM) and requires permission for use, in portion or in full, for any reason. This document may not be disclosed to any third party without the express written permission of Institute of Real Estate management. IREM logo, IREM, CERTIFIED PROPERTY MANAGER, CPM, ACCREDITED RESIDENTIAL MANAGER, and ARM, are registered marks of the Institute of Real Estate Management. Page 2

INTRODUCTION The Institute of Real Estate Management (IREM) is a professional association dedicated to providing resources, services, and recognition for real estate managers. IREM supports the expanding real estate management profession by maintaining multiple prestigious and nationally accredited credentialing programs, offering educational tools and professional resources to real estate managers and their employers. IREM upholds the professional standards of real estate management professionals by offering the credentials, CERTIFIED PROPERTY MANAGER (CPM ), ACCREDITED RESIDENTIAL MANAGER (ARM ), and ACCREDITED COMMERCIAL MANAGER (ACoM), to recognize the professional experience of industry standard practitioners. These credentials signify to the greater professional community that credential holders have the experience and skills necessary to perform the real estate manager role effectively and competently. To fulfill organizational objectives and maintain compliance with testing and measurement standards, IREM contracted with PSI Services LLC in 2015 to perform the job analysis for the real estate management profession. DEFINITIONS, PURPOSE, AND USES OF JOB ANALYSIS Organizations involved in credential development conduct job analysis studies to identify the critical practices of a profession. A job analysis study is also referred to as a role and function study, practice analysis, or Role Delineation Study (RDS). Job analysis studies are a method of identifying information about a job role, which is then used to establish the necessary, critical, and important requirements to ensure that practitioners in such a role have the requisite knowledge for credentialing. A job analysis is typically conducted in three phases. In the first phase, a description of the profession is drafted using available literature. In the second phase, this description is refined through input by groups of practitioners referred to as subject matter experts (SMEs). In the final phase, a survey validates the description of practice. Survey participants evaluate each element of the description of the profession via specific rating scales. The rating results produce a picture of practice in the profession. Further data analyses identify response patterns, such as differences among job titles, geographic regions, professional backgrounds, and other aspects of the industry (specialization) across the rating results. IREM conducts a job analysis approximately every seven years. Updates ensure that IREM s credentials address the most current practice of the profession. Job analysis studies in credentialing typically have a final purpose of generating an examination specification or blueprint. However, the results from a job analysis study may also be used to generate: Page 3

certification eligibility criteria professional development guidelines educational curriculum, courseware, and materials competency development or competency models a body of knowledge The task and knowledge statements that comprise a job analysis can provide concrete information regarding the job role and can be used to define the professional workspace. Figure 1. Phases to Identify Task and Knowledge Phase 1. Draft Role and Function Content Research the role of a real estate manager using existing literature Draft task and knowledge areas of a real estate managers based on previous Job Analysis and a literature review Phase 2. Refine Role and Function Content Review, revise, and refine task and knowledge statements through multiple, iterative reviews by subject matter experts Finalize the task and knowledge statements Phase 3. Validate Role and Function Content Conduct a public survey of real estate managers Obtain demographic and firmographic information to document the survey sample Obtain importance and performance ratings for tasks and knowledge Use the data from the survey to refine the IREM credentialing requirements to reflect changes in the industry Page 4

JOB ANALYSIS METHODOLOGY The steps below depict the methodology for the job analysis. Step 1: Planning Meeting Step 2: Drafting Task and Knowledge Statements Step 3: Subject Matter Experts/ Task Force Meeting Step 4: Survey Review and Pilot Testing Step 5: Survey Administration In preparing for the study, PSI Services LLC staff started by conducting research on tasks and knowledge critical to real estate management. Select literature and publically available job descriptions for real estate managers were gathered and summarized to revise and add to the existing delineation from IREM s previous job analyses. The initial list of task and knowledge statements was then submitted to a group of subject matter experts (SMEs) to add and refine potential survey questions. The SMEs demonstrated varied perspectives of the real estate management profession, as they represented a diverse range of professional experiences. Following development of the draft job analysis survey, the survey was sent to an additional set of subject matter experts for pilot testing and revision. The Real Estate Management Job Analysis Survey was launched in June 2015 via multiple communication campaigns. The final version of the survey consisted of task statements, knowledge topics, and demographic questions. It should be noted that the task domains differ from those of the knowledge/skills. This differing domain was created at the Task Force meeting based upon logical organization of the task and knowledge/skills statements. TASK STATEMENTS The tasks performed by real estate mangers were organized across six domains: 1. Maintenance and Property Operations 2. Financial Operations and Asset Management 3. Legal and Risk Management 4. Leasing and Marketing 5. Human Resources 6. Client/Owner Relations The task statements were rated using the two scales below: 1. How important is performance of this task in your current position? Utilizing a 5 point scale (0=No Importance, to 4=Very Important) Page 5

2. Do you perform or manage the task? Utilizing a 4 point scale (0=Neither perform nor manage the task, to 4=Both perform and manage the performance of the task) KNOWLEDGE TOPICS The statements of knowledge required of real estate managers were organized across seven domains: 1. Maintenance and Property Operations 2. Financial Operations and Asset Management 3. Legal and Risk Management 4. Leasing and Marketing 5. Human Resources 6. Client/Owner Relations 7. Cross-Functional Skills The knowledge statements were rated using two scales below: 1. How important is this knowledge to perform your job responsibilities in your current position? Utilizing a 5 point scale (0=No Importance, to 4=Very Important) 2. At what point is the knowledge/skill first acquired? Utilizing a 6 point scale (0=Never, to 5=After 5 years of experience) DEMOGRAPHIC QUESTIONS All respondents were asked a series of demographic questions to confirm that a representative cross-section of real estate managers were surveyed and to conduct sub-analysis of the results that will provide additional definitional guidance based on property type, position, and other subgroups. The demographic questions covered: Primary job function (e.g., asset manager, regional manager, officer/director, site manager) Organization type (e.g., REIT, full-service real estate firm) Type of property comprising largest share of portfolio (e.g., apartment, office building, condo, medical, retail) Number of employees managed and/or working in organization Years of experience in real estate management Country, state, province, and/or territory where work Highest educational level Gender Age Page 6

JOB ANALYSIS RESULTS A total of 1,415 survey responses (sample size) were deemed appropriate for inclusion in the analyses. An examination of the demographic data from the survey, combined with comparisons with previous studies performed by IREM, demonstrated the representativeness of the sample. OVERALL TASK AND KNOWLEDGE RATINGS Table 1 summarizes the survey results by grouping the top rated task and knowledge statements into main categories. For example, a number of highly rated specific task statements all related to different aspects of property operating policies and procedures. Similarly, all the highest rated knowledge statements are related to cross functional or soft skills. A list of the top 30 specific task and knowledge statements is provided at the end of this report as Exhibit A. Table 1 Top 10 Task Areas for Real Estate Managers (all respondents) Based on the highest rated task statements, clustered by function Enforce, maintain, establish, and review property s operating policies and procedures Inspections, maintenance and repair services Capital improvements and/or replacements Investigate and resolve complaints from residents/tenants/unit owners, and maintain community relations Prepare, monitor, implement, and present for approval annual budgets (e.g., operating, capital, marketing) Enforce terms of the rental or lease agreement Manage, evaluate, and develop employees Manage and monitor accounts receivable, property collections/bad debt Ensure vacancies are prepared for occupancy in a timely manner Collaborate with property owner(s) and/or board of directors to develop ownership goals and objectives Top 10 Knowledge Areas for Real Estate Managers (all respondents) Based on the highest rated knowledge statements, clustered by function Cross Functional ( soft skills) (e.g., communications, problem solving, interpersonal Skills, critical thinking, team building) Professional ethics Property operating policies and procedures Managing property performance (e.g., owners goals, objectives) Finance (e.g. NOI, financial and operating reports, budgeting) Maintenance (e.g., preventative maintenance, maintenance objectives, property service requirements and expectations) Landlord-tenant procedures and legal regulations Property management software and technology Lease types, terms, conditions Government regulations and guidelines related to property operations SUB-ANALYSIS HIGHLIGHTS The following highlights are drawn from a sub-analysis of survey results based on demographic information, such as property type and job position. Cross Functional Skills Soft Skills The IREM 2015 Job Analysis highlights the importance of soft skills real estate management professionals. Of course, industry related knowledge about finance, maintenance, risk management, marketing and leasing, and other property operations continue to be rated as Page 7

important. What is telling, however, is that cross functional skills (i.e., people or soft skill) rank even higher in importance. Of the top 25 ranked knowledge statements, 19 are cross functional skills (including all of the top 15 ranked items). The term cross functional is used because they are skills and knowledge that are needed to successfully perform a variety of industry specific tasks and responsibilities. While the sub-analyses contain minor variations in the priority order, the general ranking of cross functional skills are consistent across all property types and all job descriptions. And while 85% of survey respondents said they manage people, even the 15% who do not still ranked these skills higher than industry specific knowledge. When asked when they acquired these skills, roughly 20% to 25% of the respondents said they developed them during their formal education. Approximately 70% of people surveyed said they developed them during the first five years on the job. While the higher people advance in a company the less they manage properties and the more they manage people, even entry-level property managers recognize the value of cross functional skills. While the value of cross functional skills is certainly not unique to this industry, real estate management is a sophisticated business. It requires the utilization of the latest technology to increase operating efficiencies, maximize revenue streams, and monitor property performance. However, the survey results confirm that real estate management is still essentially a personal service profession. Real estate managers realize that managing people and relationships are just as important as managing buildings, because of the individual relationships they have with building owners, tenants/residents, and employees. Sustainability With a few exceptions, sustainability and green buildings rank relatively low in importance for real estate managers. Overall, less than 50% of all survey respondents ranked developing and implementing sustainable practices as important or very important. There are, however, some notable exceptions. The office building sector is the only property type where over 50% of respondents ranked sustainability issues as important or very important. Most green building research, initiatives, and government regulations have been directed at office buildings, which may help explain the rankings in this industry sector. Among office building managers, site and regional/district managers gave sustainability tasks the highest rankings which is understandable, since they would generally have the most involvement in implementing green practices at properties. Another outlier is Real Estate Investment Trusts (REITs), which rank sustainability issues higher than other property management firms. Many REITs are publically traded, and even when they are privately traded there may be a greater need to display a higher social conscience for shareholders and investors. As REITs are often larger than other real estate firms, they are also more susceptible to government regulations and policies related to sustainability. Sustainability generally doesn t register high on tasks for multifamily managers. But, site managers at residential communities do believe that it is important for them to educate residents on the role they play in sustainable practices (e.g., energy and water conservation). Finally, while most real estate managers may not rank sustainability tasks highly, a majority at least agrees that it is important or very important to at least know about sustainability practices. Page 8

Property Management: Apartment Communities vs. Office Buildings The types of job functions and knowledge required of apartment community and office building managers are generally similar. Putting together a budget for an office building might be somewhat different than putting together a budget for an apartment community, but it is a similar function common to both types of managers, as is the knowledge required to construct them. In fact, of the top 10 tasks for both office building and apartment managers, 7 of them overlap There are some areas where the two types of property managers diverge in terms of what s important for them to do and know. One of those areas is in sustainable practices as already mentioned which is much higher in importance for office building managers. Marketing and leasing functions are considerably more important for apartment community managers. This includes not only developing and implementing marketing and leasing plans, but implementing resident retention plans, and developing social media and reputation management strategies. For office buildings, the primary people responsible for marketing and leasing are brokers, rather than the property manager. It is also something that is likely to come up less often for office buildings, since office leases can be 5, 10, or even 20 years in length rather than the 12 months or less for conventional apartments. Hiring, staffing, and employee engagement/retention is also more important for apartment community managers. Just as resident/tenant turnover is higher in the multifamily industry, it is often also true with employee turnover. Asset Managers vs. Property Managers There has much discussion about the blurring of the lines between asset managers and property managers. The Job Analysis confirms that there are a lot of traditional asset management functions that apply to a wide variety of property management positions. Preparation and management of property budgets are important functions across the board, as is collaborating with owners to develop ownership goals and objectives. Analyzing a property s financial performance (e.g., cash flow analysis, internal rate of return), preparing management plans, and overseeing the property s financial obligations (e.g., approval of leasing activity, debt service payments, ownership transfers) were cited as important for anyone serving as a regional manager or above. As can be expected, however, asset managers tended to rank financial-related tasks and knowledge higher than other real estate managers. Property managers tended to rank property operation tasks and knowledge higher. There are also some apparent distinctions in areas that only received high rankings from asset managers and top executives at real estate firms, including: preparing and approving long-term financial models; analyzing proposed property improvements relative to future value/return on investment; making recommendations and performing due diligence for acquisitions and dispositions; and assessing the market value of the property. In fact, top executives (e.g., Presidents, CEOs, Officers, Directors, and VPs) are likely to assume more traditional asset management functions than those in the industry with the formal title of Asset Manager. Page 9

Avg. Rating (Max = 4) 0 = No Importance 1 = Low Importance 2 = Moderately Important 3 = Important 4 = Very Important Exhibit A: Top 30 Task and Knowledge Ratings Task Ratings: How important is performance of this essential activity in your current position? % of Respondents by Rating (All property types, all job positions; 5 point rating scale) Enforce property's operating policies and procedures 3.42 3.06% 2.28% 6.41% 26.05% 62.21% Inspect the property to identify and document needed repairs or improvements and notify responsible party 3.35 3.77% 3.49% 7.76% 23.84% 61.14% Maintain property's operating policies and procedures 3.31 3.77% 3.70% 7.97% 26.98% 57.58% Resolve complaints from residents/tenants/unit owners 3.29 5.21% 3.35% 7.35% 25.32% 58.77% Identify needed capital improvements and/or 3.27 4.42% 3.21% 8.69% 28.35% 55.34% replacements Prepare annual budgets (e.g., operating, capital, 3.25 8.31% 2.82% 5.78% 21.60% 61.49% marketing) Enforce the terms of the rental or lease agreement 3.25 7.56% 3.64% 5.06% 24.11% 59.63% Investigate complaints from residents/tenants/unit owners 3.23 4.71% 4.79% 7.93% 28.36% 54.21% Monitor annual budgets (e.g., operating, capital, marketing) 3.21 7.59% 2.89% 6.36% 27.40% 55.75% Coach and mentor employees 3.19 9.20% 2.61% 5.44% 25.61% 57.13% Obtain approval for needed capital improvements and/or replacements Assess needed capital improvements and/or replacements (e.g., life expectancy, inefficiency safety, condition) 3.16 6.92% 3.93% 7.99% 28.27% 52.89% 3.16 5.70% 3.78% 9.98% 29.79% 50.75% Establish property's operating policies and procedures 3.16 5.35% 5.13% 10.76% 26.16% 52.60% Manage employees 3.15 9.79% 2.52% 5.89% 26.86% 54.93% Review property's operating policies and procedures 3.13 3.28% 4.99% 13.03% 32.76% 45.94% Implement annual budgets (e.g., operating, capital, marketing) Manage and monitor accounts receivable (e.g., rent, utilities, Common Area Maintenance [CAM], reimbursable) Present annual budgets for approval (e.g., operating, capital, marketing) 3.10 9.48% 3.76% 5.72% 28.87% 52.17% 3.10 9.53% 2.65% 7.66% 28.72% 51.43% 3.08 11.06% 3.83% 5.64% 24.80% 54.66% Evaluate employees 3.04 11.35% 2.99% 6.90% 28.30% 50.46% Manage and monitor property collections/bad debt 3.01 10.11% 3.37% 9.68% 28.84% 47.99% Ensure that vacancies are prepared for occupancy in a 3.01 11.34% 4.51% 7.66% 24.87% 51.62% timely manner Collaborate with property owner(s) and/or board of directors to develop ownership goals and objectives 3.01 10.40% 4.77% 9.60% 24.40% 50.83% Schedule maintenance and repair services 3.00 7.20% 7.42% 8.84% 30.74% 45.79% Monitor maintenance and repair services 3.00 6.22% 6.37% 9.87% 36.34% 41.20% Provide training and development for employees 2.97 12.05% 3.45% 7.60% 29.62% 47.28% Update property's operating policies and procedures 2.95 6.70% 5.99% 14.19% 31.74% 41.37% Manage community relations 2.95 8.60% 6.45% 11.68% 27.87% 45.42% Evaluate bids for contract services (e.g., capital improvements, janitorial, security, landscaping, trash removal) 2.94 8.57% 4.85% 11.85% 33.48% 41.26% Page 10

Avg. Rating (Max = 4) 0 = No Importance 1 = Low Importance 2 = Moderately Important 3 = Important 4 = Very Important Exhibit A: Continued Knowledge Ratings: How important is this knowledge to perform your job responsibilities in your current position? % of Respondents by Rating (All property types, all job positions; 5 point rating scale) Communications 3.64 0.75% 0.75% 3.00% 25.00% 70.51% Problem solving 3.62 0.65% 0.84% 3.35% 25.79% 69.37% Interpersonal skills 3.61 0.84% 0.56% 3.46% 27.06% 68.07% Time management 3.59 0.75% 0.75% 3.56% 28.56% 66.39% Customer service 3.55 1.21% 1.58% 6.24% 22.72% 68.25% Critical thinking 3.55 0.84% 1.22% 4.49% 29.12% 64.33% Business etiquette 3.50 0.75% 0.75% 6.26% 32.06% 60.19% Conflict resolution 3.46 1.03% 1.77% 6.91% 30.25% 60.04% Leadership 3.46 1.96% 2.43% 5.99% 27.13% 62.49% Motivation 3.41 1.03% 1.40% 8.43% 33.80% 55.34% Professional ethics 3.36 5.82% 2.63% 5.35% 21.95% 64.26% Emotional intelligence 3.31 1.97% 2.25% 11.14% 31.93% 52.72% Negotiation strategies and techniques 3.29 1.88% 2.53% 10.60% 34.71% 50.28% Team building 3.26 2.61% 3.45% 10.36% 32.12% 51.45% Delegating 3.26 2.33% 2.05% 10.63% 37.31% 47.67% Property operating policies and procedures 3.22 4.49% 3.07% 8.97% 33.06% 50.42% Coaching and mentoring 3.21 3.36% 3.36% 10.84% 33.46% 48.97% Presentation skills 3.19 2.06% 3.64% 13.27% 35.23% 45.79% Managing property performance (e.g., owners goals, 3.19 5.55% 2.44% 9.25% 33.22% 49.54% objectives, closing ratio, accounts receivable) Management styles 3.17 2.42% 3.07% 13.50% 37.06% 43.95% Networking 3.14 1.97% 3.56% 16.01% 35.58% 42.88% Net Operating Income (NOI) 3.12 8.40% 3.34% 9.03% 26.65% 52.57% Preventive maintenance procedures 3.11 4.01% 4.10% 11.45% 37.96% 42.47% Financial and operating reports 3.08 8.30% 3.34% 9.11% 30.39% 48.87% Maintenance objectives (e.g., optimal function of property, 3.08 5.00% 4.00% 11.91% 36.64% 42.46% lower operating costs) Landlord-tenant procedures and legal regulations (e.g., 3.05 6.87% 4.70% 11.56% 30.62% 46.25% evictions, security deposits, lease provisions) Property service requirements and expectation (e.g., 3.04 4.52% 4.44% 13.14% 38.33% 39.58% janitorial, pest control, trash, landscaping) Property budget variances 3.02 7.84% 3.88% 9.83% 35.17% 43.28% Property management software and technology 3.01 5.31% 4.47% 13.41% 37.18% 39.63% Lease types, terms, and conditions 2.99 8.10% 4.79% 10.59% 33.43% 43.09% Page 11