In this interview with The Newport Groups Executive Vice President, Tom Chaparro, we discuss the hiring optimism and initial forecast for hiring in the key areas of specialization of an executive search company. Those areas are Real Estate, Construction, and Upstream Oil and Gas sectors for 2021. Tom specializes in executive search in all classes of real estate as well as the upstream oil and gas sectors.
- What is your outlook on hiring in the Real Estate Development industry for 2021? What should hiring managers and industry professionals expect?
The Newport Groups Real Estate Development executive search practice is primarily focused on Residential Development and Construction, Land Development, Commercial Development, and Asset & Property Management. We anticipate that hiring in 2021 will be reasonably robust in these markets by continuously breaking the barriers of common recruitment misconceptions. Like many of our clients, we had a successful fourth quarter in 2020 that is allowing us to hire more people to expand our team.
We saw numerous knee-jerk reactions with many developers at the beginning of the pandemic. This was completely understandable given the high level of uncertainty with the events occurring at that time. As we entered the 4th quarter, it was clear that the robust housing market would be one of the economy’s bright spots. New home sales set records in many markets.
Our residential development clients remain very active, and we are very busy helping them attract and hire highly valued key managers and contributors. We feel that this sector will only get busier.
Our multifamily and apartment clients stabilized late last year as well. We feel that that sector will remain reasonably stable. We don’t see current activity at pre-Covid levels. However, there is still a lot of activity on both the development/construction side as well as the acquisitions side. We remain committed to those sectors and are active on numerous projects right now.
- What shifts are you seeing in the Residential Development sectors? Are you seeing new markets emerge as a result of Covid?
With the pandemic forcing people to work remotely, we’ve seen people leaving densely populated areas and moving farther out from major employment centers. People are re-examining how they’re choosing to live, and now that they don’t have to commute, they’d like a little bigger slice of the American Dream. People are desiring bigger homes. With the home acting as a home office, the classroom, the gym, and more, people want and need a bigger home. All of the sudden they need a home with a yard.We are also seeing tremendous interest in areas outside of California in the west. Idaho, Utah, Colorado, Arizona, and New Mexico are very active for our clients. Once again, people are leaving densely populated areas to get more space and get more value. This includes significant activity on the land development side. We have also seen a lot of activity in the master planned community side. These large developments typically include shopping center, school, fire stations, and other extensive developments. We are seeing a significant uptick in the master plan community market.
A great example of renewed interests in master planned communities is a 5000+ homesite project being developed by one of our key clients east of the San Francisco Bay Area. Builders have lined up to buy lots. At this point, 3 different merchant home builders are building neighborhoods simultaneously and units are selling as soon as they are available. That pretty much sums up what is going on with residential development right now.
- What is your forecast for Construction, and what are your thoughts on 2021?
At The Newport Group, we have construction broken out into 3 industry sectors. Civil Construction which includes the building of roads, bridges and things of that nature; large scale Utility and Pipeline Construction; and the General and Specialty Contractor space.
We are seeing these sectors remain steady as they continue to move forward with essential projects. The gas pipeline construction activity has decreased due to the low prices of oil and gas, but that is starting to return as well.
The only sector that we think is going to be a little more tenuous is the general/specialty contractor sector. With the threat of continued COVID closures, some general construction projects have slowed down versus the large-scale infrastructure projects that are deemed essential. We remain busy recruiting for general construction, however we do feel it will be a relatively flat market for the remainder of 2021.
Overall, our clients realize that executive talent will become even more competitive.
- 2020 was a year of uncertainty and big swings in Oil, Gas, and Energy sectors. Do you believe this will continue and how do you see 2021 from a hiring perspective for these businesses?
For many years, The Newport Group has provided executive talent in the Upstream Oil and Gas sector. Currently, oil is back up to $53, $54 a barrel as of this interview. We have seen oil prices steadily increasing, which is healthy versus the spikes and valleys of 2020. Our clients in both the exploration and production space as well as our oil field services clients are starting to get busy again. Most of the companies we’re speaking with are cautiously optimistic. We have also seen many furloughed employees get rehired. This is a very good sign.
- How has the Coronavirus Pandemic impacted oil and gas?
It is no mystery that everyone has been affected by COVID. Demand for oil and gas has waned because of COVID. As people get back to living, as people get back to driving, flying, we will see all those issues disappear, and we’re going to see the demand for fuel continue to increase. We’re going to see a refining increase. We’re going to see prices increase. That’s just what we believe will happen as a result of us coming out of this pandemic. We’re already starting to see it.
We are cautiously optimistic about the oil and gas and energy sectors. With the new administration coming in, there’s a lot of uncertainty about what will happen with commodity prices. We don’t believe we’re going to see much of a decrease in commodity prices. It’s pretty much at equilibrium right now, from what we can see.
We Network With A Purpose
The Newport Group is a leading executive recruiting firm with expertise in numerous industry verticals. We deploy proprietary data sets and meticulous processes to identify, recruit, place, and help retain blue-chip talent at leading companies nationwide. Turn the challenges ahead into competitive advantages alongside our help. Roles we’ve placed include Senior VP, VP of Operations, Sr. Construction Manager, and Operations Manager Telecom, to name a few.
Our team of recruiters is active in all sectors of real estate development, including production homebuilding, multifamily, commercial, retail, land, and asset, and property management.