From left to right: Christopher L. Payne, managing director, Sares Regis Group; Amy G. Price, chief operating officer, Bentall Kennedy U.S.; Jason Kern, chief executive officer, North America, LaSalle Investment Management; and Matthew B. Slepin, managing partner, Terra Search Partners, LLC., speaking at the ULI Fall Meeting in San Francisco.

Many established real estate firms face the challenges of succession, especially when a younger generation takes the reins from accomplished leadership. A 2015 ULI Fall Meeting session organized by the ULI Next initiative explored the meaning of leadership in mature companies, where success is not just about transactions but about building the business platform amid generational, cultural, and technological changes.

Moderator Matthew Slepin of Terra Search Partners discussed what he calls the yin and yang of real estate, in which “yin” comprises traditional activities like deal making, while “yang” is about people, organization, culture, values, succession, and more. Successful real estate companies, he remarked, are focusing increasingly on the “yang.”

Jason Kern, CEO of LaSalle Investment Management, Americas, one of three next-generation panelists, discussed how he does just that. “I came from the more volatile investment banking sector; real estate tends to be more long-term,” he said, noting that he has employees that have been with the firm for 30 years or more. It can take several years to develop a relationship with a client and raise capital from them, then invest that capital on their behalf—and those assets can then be under management for decades. “This dynamic leads us to think strategically and for the long term,” he remarked.

“While our clients value longevity and stability, it creates a challenge for management: how and when do these senior people move on, and who will replace them? Millennials sometimes don’t seem to have as much patience to pay their dues; how do we keep them motivated and engaged? We risk losing the best of the bunch.”

Fellow panelist Amy Price, COO of Bentall Kennedy U.S., also came to the industry from investment banking, joining her firm at a critical time following merger of the U.S. and Canadian branches and changing ownership. “I was involved on the transactions side for 20 years—the yin—but now I spend a lot of time doing leadership assessments of our teams,” she noted. “We look at what types of leaders our people are: are they functional, strategic, or people people?”

Chris Payne came to Sares Regis Group, a private company focused in the western states , from AvalonBay, a national REIT.  Payne said,  “The product development, site selection, and location preferences are similar between the two companies, but the culture and organizational structure are much different.  I come from the yin background, but now spend more of my time on the yang, including strategy and organizational issues.  Dedicating more time toward nurturing younger talent with a goal towards the organizations long term objectives is a sound business practice.  Both companies have a dedication to this practice.”

“We are working hard to grow strong leaders from within the organization and allowing them to have a greater role in driving the company forward.”  Payne continued. “These are proactive efforts that take years of planning and coordination to provide opportunities for new leaders to emerge and provide the guidance and tools they need to succeed.”

Kern pointed out that he himself is a part of his company’s succession plan, having replaced a CEO who had been with the company for 30 years. “Hopefully, I bring a fresh perspective,” he said. “I see myself as the manager of a baseball team in that a big part of my job is assessing talent and place our ‘players’ in positions in which they are most likely to succeed.”

Later in the session, the discussion turned to diversity. Said Kern: “A lot of our clients are younger and more diverse, and they like to work with people who reflect their viewpoints and values. I am trying to bring in more diversity to our management team, whether in terms of gender or type of business experience. It just makes for better decisions and more innovative thinking.”

Price commented that “the goal is evolution, not disruption.” The situation is complex, she added, because many women started careers in real estate and left for different reasons. Because of this gap, it’s important to focus on retaining the best employees. “As an industry, we need to create multiple career paths and opportunities and ways to define success,” she remarked.

Kern pointed out that his company’s older employees can be just as productive, yet the organization still has to plan for succession. For each clear leadership role, the organization identifies an immediate (i.e., hit-by-a-bus scenario), a mid-term, and a longer-term successor.

The panel also addressed the meaning of the word culture within real estate businesses. According to Price, corporate culture answers the following question: why work for us instead of our competitors? What is the experience of working here? People need to enjoy being at their places of employment, she added, noting that “it’s not just what you do, but how you do it.”

When asked for specific career advice, panelists agreed that regardless of one’s age, it is important to find an organizational culture that fits your sensibilities and a mentor within the organization. “Wherever you can find that relationship, latch onto it,” said Price. She also suggested seeking out and listening to constructive feedback. “You can be on the right track,” she pointed out, “but if you’re standing still, you’ll get run over.”