(044) 223-27-26
(095)-283-88-88
(067)-506-16-04
(044) 223-27-26
(095)-283-88-88
(067)-506-16-04
ÐóññêèéEnglishÓêðà¿íñüêèé
HomeSite mapContacts
Main page / News & Events / Top news / Real estate firms shedding workers as sector slows

Our projects

 
Region: Kyiv region
 
Amount of houses: 499
 
Area of lot land: 119 Ha
 
 
Region: Kyiv region
 
Amount of houses: 1511
 
Area of lot land: 234 Ha
 
 
Region: Kyiv region
 
Amount of houses: 1979
 
Area of lot land: 300 Ha
 
 
Region: Kyiv region
 
Amount of houses: 596
 
Area of lot land: 80 Ha
 

Real estate firms shedding workers as sector slows


 
17.10.2008

Real estate firms shedding workers as sector slows


 

A round of layoffs is quietly rippling through the commercial real estate industry as companies hope for the best but prepare for the worst.

With the rise of inflation and the evaporation of credit markets over the past year, the development projects that support an entire industry — architects, construction companies, leasing representatives, sales agents and others — have gone the way of the dot-coms of the late ’90s.

Residential real estate “has really been at the center of the storm, so the job losses there have been dramatic,” said John Challenger, president of Chicago-based outplacement company Challenger, Gray & Christmas Inc. “Commercial real estate has been more insulated from the losses but has been feeling more pressure since the spring, and it’s likely to continue to get worse.”

With much of the real estate industry dominated by private companies, accurate layoff and employment statistics are hard to come by. News of layoffs typically leaks out through whispers and word of mouth.

Occasionally, companies will release statements, often in response to media inquiries. Rockville-based James G. Davis Construction Corp., for example, confirmed it has reduced its work force.

“Over the past several years, Davis has increased its staff in order to construct many large projects, including several major high-rise residential projects,” a recent statement said. “These projects are now complete, and the market has slowed. It is our expectation that the real estate and construction market will be less robust than previous years, and Davis elected to address our staffing levels to match our expectations.”

The company, which posted $813 million in metro-area revenue in 2007, would not say how many employees were let go.

JPI East also declined to give specific numbers when the McLean-based multifamily developer laid off half its development division this fall.

Word leaked earlier this month that CB Richard Ellis Inc., a Los Angeles-based full-service commercial services company, had laid off an undisclosed number of employees as part of a cost-containment plan.

The layoffs included the managing director of its Baltimore office, but the impact in Washington was expected to be “minimal,” a company representative said.

CBRE experienced a significant drop in income over the past year because of steep declines in sales and leasing activity.

In July, the company reported second-quarter net income of $16.6 million, down from $141.1 million for the same quarter of 2007. CBRE will formally announce the layoffs in its third-quarter earnings report, scheduled for the end of this month.

Conventional wisdom — and common sense — says that virtually every company in the real estate industry has laid off at least some employees. Still, calls to many companies rumored to have laid off workers were met with silence.

“It’s not just a few companies; it’s everyone,” said one former development executive who asked not to be named to preserve relationships. “People don’t want to talk about it. They don’t want to become the bastion of layoffs or the focus of an article.”

Companies typically are required to notify the government of layoffs only when they close units with at least 50 full-time employees or lay off 500 at a single site.

The U.S. Bureau of Labor Statistics estimates that the region’s real estate-related job sectors saw precipitous losses over the 12-month period ending in August.

In D.C., Arlington and Alexandria alone, the “natural resources, mining and construction” sector lost 5,600 jobs, and the “financial activities” sector lost 2,600 jobs.

Those were the two sectors that lost the most jobs in the bureau’s labor survey, said Gerald Perrins, a regional economist at the bureau. With little mining and high finance going on in the Washington area, it is a safe bet most of the layoffs in the two sectors were related to real estate, he said.

At least one economist thinks most of the damage to residential real estate jobs has already been done. “And commercial real estate was slowing down anyway because we’ve been overbuilt,” said Stephen Fuller, director of the Center for Regional Analysis at George Mason University.

What will happen to the real estate worker bees cast out of their hives?

Looking down the road, Challenger sees energy, health care and overseas work as three of the strongest growth areas. Most people in real estate have portable skills to capitalize on that movement, he said.

Construction workers may move into mining and energy, perhaps targeting jobs in an emerging green economy, and sales and administrative professionals could go into health care, Challenger predicted.

And how about those more narrow specialists, like architects? “They might head toward Dubai and catch some of that boom.”

Êîìïàíèÿ "SV Development"