Keller Augusta Partners

'There's A Cost': CRE’s Mental Health Struggles Hit Early Career Workers Hard

'There's A Cost': CRE’s Mental Health Struggles Hit Early Career Workers Hard

Apr 9, 2023

Kaitlin Kincaid, senior managing director of Keller Augusta, talks about how companies are offering solutions and mentorship to young professionals.

Over the course of her commercial real estate career so far, Beyond Commercial founder Amy Calandrino has felt the strain of hustling in her early years, launching her own business, and navigating the challenges of maintaining a career while raising children and tackling postpartum depression.

The Orlando, Florida-based Calandrino realized in recent years that she was continually chasing more volume and more deals, aggressively growing her boutique firm and doubling deal volume in a year, yet that pursuit wasn’t bringing her success or happiness.

“I didn’t want to go to my church because I didn’t want people to find out how unhappy I was,” she said. “I wasn’t being honest even with my best friends about how unhappy I was. The more and more I did, the more unhappy I was, and I had to make a change.”

She found that setting more boundaries around time, for her and her employees, and being more selective about who she works with helped relieve stress and burnout without, in the end, sacrificing much business.  

“Early in your career, you feel like you have to do everything,” Calandrino said. “And there’s a cost to it.”

Calandrino's experience is a familiar one for commercial real estate professionals, especially younger ones, who are facing mental health challenges as they look for success in the notoriously grinding profession that is CRE.

During the early period of the pandemic, when deals dried up and working from home caused significant strain and isolation, many employers in CRE responded with additional benefits, employee support, and a greater awareness of mental health and work-life balance, especially for their newer staff members. 

The industry was reflecting more on the traditional gung-ho, “always be closing” broker mantra, which can interfere with professional achievements and personal health in the best of times. Companies began looking at and then increasing benefits as a necessary recruitment and attraction tool, Keller Augusta Senior Managing Director Kaitlin Kincaid said. Candidates weren’t just looking at titles but also at the supportive environment of a firm.

But now, during a period of job losses and belt-tightening, some of the gains around workplace mental health are in danger of being lost. 

“It’s inevitable that it's not going to get the attention it needs because a lot of people in our line of work are in survival mode,” said Isabella Zellinger, a 28-year-old senior adviser and broker at Cresa’s Orange County office.

And according to CRE professionals interviewed for this article, this is happening just as a diverse group of employees starting out in the industry needs guidance, support and — what could be considered a challenge to the industry’s recruitment prospects — a reason to stay or consider CRE careers in the first place.  

“Young professionals are weighing an opportunity,” Kincaid said. “They want to know what the path is before they've come in and proven themselves.”

Roughly 1 in 4 workers in the sector suffer mental health problems, according to new joint research by Cambridge University and University College London that surveyed 20,000 Britons. A Baylor University report broadly categorized the myriad industry and transaction stressors at play in the CRE environment, especially for brokers and those working on commission, such as market cycles, negotiating, “long hours dealing with emotional, tense clients” and “external events that, while out of your control, determine your ability to complete a transaction.” 

“It’s easy to start thinking, ‘Am I failing? Am I doing this right? Am I going to make it?’” Zellinger said. “Especially if you don’t have a mentor who’s coaching you. That’s why people leave the business, because they can’t mentally weather that.”

Generational differences often make it difficult for younger workers to speak up about mental health concerns. Generally in American society, a tide is turning toward more open communication about these issues, but for many older people, the instinct remains to simply be quiet and push through — to toughen up.

“Old-time people will say, ‘Well, they just didn't have what it takes. They didn’t have the stamina,’” Zellinger said, referring to critiques of younger CRE employees burning out and abandoning the industry. “I beg to differ. I think a lot of the people who ‘weathered it’ before, maybe they had a support system where they had parents who were paying their bills while they were figuring it out.”

The silence of significant sectors of older CRE employees around mental health and the unwillingness to discuss what some see as a weakness is detrimental, said Casey Flannery, senior associate at Nashville, Tennessee-based industrial brokerage Foundry Commercial and co-host of #CREChat on Twitter. Younger workers approach their roles with a better sense of work-life balance, she said, and sadly, they often get put in a place where they need to advocate for change. 

“Big groups in CRE need to implement changes to accommodate more employees and get younger employees into commercial real estate,” Flannery said. “It’s going to be hard to retain the talent if they have a superior who expects them to work 24/7.”

The kinds of workplace stressors described only make it harder to recruit and retain young workers in the profession. Those who have started in recent years, during abrupt changes in workplace rules and remote work, have had it even harder. 

In particular, mentorship and support were cited by organizations like the Commercial Real Estate Women Network as challenges and barriers to women’s success in CRE. The group’s last report found that while 76% of respondents said their companies have policies or benefits to support employee mental health and well-being, the overwhelming majority still wished their workplaces would offer more mental health benefits, followed by mental health days and therapy. 

Zellinger, who said she had the benefit of a good mentor, said it was still extremely challenging to feel successful early in her career. A self-described “competitive and self-motivated” worker, she had many moments early in her career where she lost a deal to someone who might have looked more like the client or had decades of business experience. In those situations, it’s easy to go home and “feel like the game is rigged,” she said. 

“We have a massive problem in how we communicate to new young talent what our business is,” Zellinger said. “And for a long time, the commercial real estate industry got by on hiring out of relationships, which is why you see a massive, systematic problem. Everyone's fraternity brothers hire their fraternity brothers, kids, and it just was a bad cycle.”

It also exacerbates feelings of isolation and lack of mentorship for more diverse members of the real estate profession, making it more challenging for the industry to make long-term progress toward a more pluralistic, representative employee base.  

Fixing these issues requires more support across the board for younger workers in CRE. Flannery said her current and previous firms offered confidential numbers to call and reach counselors, which was a helpful resource. Some therapists suggest offering flexible, online services, which are better aligned with the shifting schedules of CRE professionals. But Flannery said to really make that commitment to change stick, management and leadership throughout the organization needed to become more comfortable talking about these issues, recognizing struggling employees, and getting them the attention and support they need. 

But it isn't impossible for firms to revert to the progress they were making a few years ago, even though the industry is in survival mode.

More firms are spending additional resources training younger workers, especially those who started during the pandemic. Mandira Mehra, the chief marketing officer at MRI Software, a proptech firm focused on multifamily, said many younger hires who started in recent years did so at home, and when offices reopened, they needed additional time to adjust and learn office etiquette.  

And others have altered how they support and reward younger employees. That includes more frequent reviews and feedback, plus more coaching, mentorship and support resources, Keller Augusta’s Kincaid said.

There are also changing workplace dynamics supporting more collaborative teams. Brokerages, especially large ones, have been shifting their business models toward more data-oriented, services-focused, long-term relationships with clients. This makes it more of a priority to eliminate workplace toxicity, often sparked by competition, feelings of unwelcomeness and a lack of collaboration, which Cindy Spivack, a real estate consultant and coach, said is the top reason brokers feel compelled to leave their firms. 

This strategy is also a big recruitment advantage. Many brokers Spivak has worked with are willing to take significant pay cuts and alter their compensation plans in exchange for a healthier workplace. 

“I’ve had people go from 80% or 90% to 50% commission, and the response is, ‘I don’t care about the money in the long run,’” she said. “‘I am in a better environment, and I’ll make up the money.’”

Like workers elsewhere, they crave a more empowering, collaborative and safer environment with common goals and a more family-like atmosphere. As younger millennial and Generation Z workers tend to take a more holistic look at their lives and crave more work-life balance, the limiting belief that success only comes from being cutthroat and working 80 hours a week won’t work. 

“Now, I think the commercial real estate sector doesn't have enough good young talent coming in,” Zellinger said. “Now, the real estate sector really needs to go out and recruit talent. And that’s really changing the paradigm.

“There has been a healthy shake-up in the industry, and it’s up to people like me, we’ve been doing it this way forever, and maybe we shouldn’t do it this way. Just because I struggled my first four years, why does the next person coming up need to go through the same thing?”