Once prodigal dot-commers are welcomed home

Real Estate Weekly, Jan 17, 2001 by Parke Chapman

Scores of executives are reverse-defecting from real estate dot-coms back to the brick-and-mortar realm. And the stalwart firms originally left in the lurch are giving remarkably few of their ex-employees cold shoulders.

"If you look at all the statistics, people who lose their jobs are finding new ones real fast. It's wrong for anyone to think that there is a grudge," said Anthony E. Malkin, president of W & M Properties, Inc.

Malkin wondered "if people's memories would be better" in a less competitive job market. Unemployment is hovering around 4% and approximately 94,000 new workers were added to payrolls in November.

Perhaps now more than ever, firms must retain their workforce rather than rely on luring new talent into the fold, for the new talent is already working for someone else.

Thanks to the gloomy dot-com climate, the talent pool is getting homesick. Stories of terminally ill commercial real estate dot-coms are becoming common; the list is long and growing by the week.

Just last issue, Real Estate Weekly reported that comro.com (Commercial Realty Online) had dissolved while RealtyIQ had laid off more than 100 employees.

It's deja vu for one real estate executive who has been there, dot-'commed' that.

Justin Krebs, a 30-year-old investment officer at JP Morgan Real Estate, once accepted a position with RealtyIQ as vice president of sales after fleeing UBS AG's real estate department.

Krebs at first worked with RealtyIQ as a consultant while employed with UBS. "Then after a few months, the glamour and the options appealed to me, along with the opportunity to get real estate-technology experience."

Krebs readily admits that he accepted the position knowing full well that the market was experiencing a "correction." That was less than one year ago.

Then in November 2000, Krebs fled RealtyIQ to join JP Morgan, where he now works. RealtyIQ's sales force thinned considerably since he left.

"The dot-com experience has pollinated the brick and mortar industry," said Krebs. Pollination is as apt a word as any since you now find executives using their high-tech experience at brick & mortar firms. Their market share -- from a firm's perspective -- goes up considerably.

Krebs has no regrets about his stint at a dot-com. In fact, he credits the technical experience that he garnered there for allowing him to "work with the technical guys here [at JP Morgan.]"

Krebs compared his dot-com experience to an MBA, in that each "gives you an edge on other potential employees. I now understand all of the real estate dot-com business."

Far from hurting an employee, it seems that leaving a firm to work at a dot-com can actually be a valuable career move (even when the dot-com runs aground).

An adjunct professor at New York University's Real Estate Institute agreed, while cautioning that salaries might take a hit on the return trip.

Despite "their failed efforts," said Lawrence Fiedler, these people "have gained experience and should be welcomed back into mainstream companies."

"They might not get the overall compensation levels that they were used to or were hoping for, however."

Fiedler has heard about some "middle-level execs rumbling over sour grapes" when it comes to bringing a person back on to the staff. "If a company needs a person with the type of experience that a beached dot-com person has, I don't think that their aborted experience will hurt for long."

Marion Flomenhaft, the associate director of the center for career education & life at New York University's school of continuing professional studies, described those seeking dot-com work as "skittish."

"We are seeing people go back to brick-and-mortar companies. They got paid more at the dot-coms but it wasn't really real money. In general, the more traditional outlets are better options," said Flomenhaft.

The world of real estate dot-coms is, by anyone's lights, fragmented. Here today, gone tomorrow is one way to sum up the bulk of the business. But the advantage to real estate executives in garnering dot-com experience might just outweigh the short-term risk.