One11 Advisors - Annual Real Estate IT Survey - 2018

As an integrated professional services firm focused on the Real Estate Industry, One11 Advisors is pleased to release our first ever real estate IT survey. Through our expanding People Services, we offer broad and creative solutions in providing services to owners, builders and operators of real estate and investors, General Partners, Limited Partners and fund managers leveraging our team of industry experts and proven solutions.

We are grateful for the participants of our first ever real estate IT survey targeted Chief Information Officers (CIOs) and other senior real estate IT executives. Our objective is to gain insight into how these executives are compensated across the industry and highlight the variables which may influence the results.

The real estate industry continues to be challenged by complex legacy architectures and organizations in a fast moving and quickly evolving market. CIOs can sometimes be overwhelmed with maintaining the status quo and making piecemeal improvements, rather than driving critical business innovations and strategies. In general, survey participants have extensive experience, with 61% of the participants with more than 15 years of real estate experience and 70% have more than 20 years of technology experience.

Survey participants also represent diverse types of real estate companies including Private Equity, Investment/Fund Management, Operators, Developers, Retail REITS and Public REITS. The two dominant groups in the survey are currently engaged in retail real estate (35%) while more than 33% are engaged in commercial real estate.

The median size of the organization for the participants was 100 to 499 employees with more than 52% with over 500 employees in their organization. The report reflected 84% of the participants as having 1- 9 direct reports, and 59% are responsible for more than 10 employees.

We were intrigued by the results in a number of ways: First, factors like number of years of real estate and technology experience, as well as size of company, had no material impact on compensation. Secondly, 26% of IT executives currently have responsibilities outside of the traditional technology role. Finally, our results yielded noticeable differences in compensation between men and women, which we discuss in more detail later within this document.

One11 Advisors compiled the data and performed the analysis in this survey. Confidentiality was maintained throughout the process. One11 Advisors disclaim any liability, loss, or risk resulting directly or indirectly from the use of the data presented herein. This report may not be reproduced, sold, licensed or otherwise transferred without the prior written consent of One11 Advisors.

Below are summary sections from the survey:

  • Overall Results

  • CIO Roles Outside of IT

  • Impact Industry and Technology Tenure

  • Gender in Real Estate Technology

  • One11 Advisors Contacts

OVERALL RESULTS

Overall, median base salary for the entire survey was $250,000 – $274,999 with a mode of $175,000 - $199,000, and the median cash bonus was 26% - 35% with a mode of 16% - 25%. Please note: “Other” category below represents 4 individuals who were the only respondent within 4 separate categories.

Screen Shot 2018-12-26 at 8.54.43 AM.png

IT leaders who hold the title of CIO had median base pay of $225,000 - $249,000 with a bonus average of 43%. The lowest CIO base pay was less than $199,000 and the highest CIO base salary was in excess of $400,000.

The graph below illustrates 44% of CIOs report to the CFO while 26% report to the COO.

Screen Shot 2018-12-26 at 8.55.55 AM.png

Our analysis found that some factors do not appear to impact compensation. One example is the average time spent with their current organization. With the exception of an approximate $10,000 salary jump on average between the 4-6 year bucket and the 7+ year bucket (with the average reported bonus of approximately 38%), there are no other noticeable correlations for length of time with the current organization.

Note: There were 6 respondents who did not complete how long they have been with their current organization, those 6 responses fell into the 'No Response' bucket- averaging $254,000 for base salary and 28% for bonus.

Screen Shot 2018-12-26 at 8.56.47 AM.png

Based on the responses, executives with a Master’s degree reported a slightly higher bonus than our other respondents. In total, 93% of respondents reported having either a Bachelor’s or Master’s degree.

Screen Shot 2018-12-26 at 8.57.28 AM.png

As far as the percentage of IT projects outsourced, there’s no noticeable correlation between the amount of outsourced versus the total square footage of property managed.

Screen Shot 2018-12-26 at 8.58.30 AM.png

Also, there does not appear to be any correlation between the size of the company and the number of IT projects outsourced as illustrated below:

Screen Shot 2018-12-26 at 8.59.41 AM.png

CIO RESPONSIBILITIES OUTSIDE OF IT

Screen Shot 2018-12-26 at 9.00.30 AM.png

According to the survey, 26% of respondents with the title of “CIO” are responsible for areas outside of Information Technology or Information Systems. These results differ significantly from the 2018 Gartner survey of more than 3,000 CIOs where “At least 84% of top CIOs surveyed have responsibility for areas of the business outside traditional IT. The most common are innovation and transformation. Based on the top CIOs' responses, the ideal balance is 56% of metrics related to business outcomes, such as revenue growth, business margins and influencing business strategy, and 44% related to IT delivery.”

While the Gartner survey reported that “51% of the respondents said that the CIO in their organization is in charge of innovation”, less than 5% of the CIOs in the Real Estate IT Survey listed innovation as their responsibility. Marketing was listed by 50% of CIOs with responsibilities outside of IT.

The graph below shows CIOs with responsibilities outside of IT, with an average base salary over $280,000 and an average 50% bonus. This contrasts with an average base salary below $257,000 and a 35% bonus for CIOs without responsibilities outside of IT.

Screen Shot 2018-12-26 at 9.01.16 AM.png

Other characteristics of the CIOs expanding their role outside of IT include:

  • 50% of the CIOs report to the COO

  • Median Years of Technology experience: 25+

  • Median Years of Real Estate experience: 20-24

  • 100% male

    IMPACT OF TENURE IN INDUSTRY AND TECHNOLOGY

    On average, the respondents had more than 20 years of technology experience and over 10 years of real estate industry experience, with the average tenure in their current role of 4 to 6 years. This is consistent with our own observations. Many CIOs within our space have stayed within industry when leaving their current positions to find another CIO role. In addition, and not surprisingly, most CIOs with 20 plus years’ experience validate the importance of identifying and working with the emerging leaders within the real estate technology space. It is our feeling that most open CIO positions are filled by existing CIOs and not through internal promotions. Based upon that and with an aging CIO population, there is a potential operational risk which enterprises should identify and mitigate within their Organizations by hiring and working with their non-CIO leaders in their organizations.

    It should also be noted that there were no significant differences between the number of years of technical or real estate experience as compared to their time with their current organization. For all ranges of tenure, from under 1 year, 1-3 years, 4-6 years, and over 7 years, all respondents showed an average of 15-25 years’ experience in both the technical and real estate fields. Whether they are a new hire or have been with the company 7+ years- their experience appears to be consistent in all experience categories. This again validates that the same people are finding themselves in IT leadership roles with limited new entrants from within or outside the real estate industry.

Screen Shot 2018-12-26 at 9.02.03 AM.png

GENDER IN REAL ESTATE TECHNOLOGY

Of the respondents surveyed, 13% were women while 7% of respondents did not indicate gender. Our survey found that 13% of women respondents made $250,000 or above; whereas 33% of male respondents reported earnings above $250,000. Based on our survey, compensation reported at the junior level was inconclusive; however, at the C-level, males out-earned women by 13%. It should be noted that women reported higher than average bonus compensation, where they could possibly be making up the gap.

Screen Shot 2018-12-26 at 9.02.41 AM.png

Women who replied as reporting to directly to CEO’s, CFO’s, or COO’s earned almost 12% less than their male peers.

Screen Shot 2018-12-26 at 9.03.26 AM.png

One11 Advisors – “Where Experience Matters”

One11 Advisors is an integrated professional services firm focused on front to back office strategy, structure, process and technology advisory and delivery services within the real estate and alternative investments industries. We specialize in providing services to owners, builders and operators of real estate and investors, General Partners, Limited Partners and fund managers leveraging our team of industry experts and proven solutions.

If you have any questions regarding our survey or People Services, please contact:

• Bernie Ocampo – Managing Director bocampo@one11advisors.com

If you have any other questions regarding One11 Advisors including: Business Consulting, Asset & Energy Management, Alternative Investments, Technical and Infrastructure Services, or Managed Services. Please feel free to contact:

  • Jim Carr – Executive Director jcarr@one11advisors.com

  • Scott Morey – Executive Director smorey@one11advisors.com

  • The information contained in this document is strictly CONFIDENTIAL and may contain privileged information. It is intended solely for the use of the individual to whom it is addressed. If you are not the intended recipient and have received this communication in error, please contact the sender immediately at the telephone number or e-mail address set forth above and destroy all copies of this communication. In addition, you are notified that any distribution or use of this communication is strictly prohibited.

David Kennedy