Real estate accounting and property accounting of all types is changing, growing and full of opportunities right now. During this exciting time to be a property accountant, we reached out to an expert in the space: Katherine Jackson, Vice President of Accounting for Bayer Properties.
In this episode, Katherine shares property accounting insights for you to take advantage of and gives us a glimpse into the ever-growing industry of property management, commercial real estate and mixed-use development on this episode of CFO Weekly.
Real Estate Accounting Offers Unique Opportunities
Some may think that the accounting profession is not something different every day, but perhaps those same people haven't worked in real estate accounting. Property accounting is a niche that Katherine discovered as she sought to follow her father’s advice about building a flexible career while using her accounting degree.
She discovered that the real estate industry is where her passion lies -- especially as commercial development continues to grow.
As mixed-use buildings and sustainable development practices rise in popularity, property accounting practices must evolve too. Katherine believes that some of the greatest opportunities in property accounting actually exist as early on as entry-level roles. It’s a niche, sure, but it’s so broad in what it offers that there’s enough scope to work through and apply your accounting knowledge.
As a property accountant, you’re maintaining the books for the property assets, doing journal entries, reconciling balance sheets, managing fixed assets and straight-line rentals, budgeting, forecasting and so much more. It’s exhilarating, and it’s a catalyst for your resume. The thing about this niche is that -- it’s more than just the numbers.
You’re required to work with owners and decision-making executives early on in a property accounting career. Your network value increases exponentially with each project you work on, and your rate of learning is unlike anything else. There’s a sense of ownership you feel, working on a project like a shopping center and actually walking the length and breadth of it on site, doing the same once it’s been completed.
Scope for Career Growth
As a green associate it can be intimidating to sit at the table with high-profile experienced executives. To this end, managers at Bayer Properties try to accompany younger staff members into meetings to model the appropriate behavior. Over time, this becomes a transition for the green associates to take over as the project accountants.
Bayer’s secret sauce is practice meetings. Katherine gathers people into a conference setting and roleplays as the client or executive team. Her experience introduces questions that may otherwise throw greener teammates off course.
“If you focus on the needs of your local community, and the tenant mix, and the needs of the tenant in your shopping center, the ROI pretty much takes care of itself," Jackson said.
The idea is to coach the team through the process, preparing them to deliver consistent professional measured responses. The broad exposure that junior accountants receive in the property niche can sometimes reveal a calling to enter another niche. Katherine has seen people branch out into property management, general business management or facilities management, lease administration or even legal work. The diverse career options make entry level property accounting roles all the more attractive.
The Challenges of Real Estate Accounting
To embrace the rewards you need to conquer the challenges. In Katherine’s view, it’s the solvers of the industry that probably encounter the most challenges. There are a lot of accountants who excel at drawing on their memory: rules, processes, formulae, you name it.
It helps up to a point in the property niche but it’s not the approach that gets you to the career peak. Real estate is a broad industry. It’s driven by leases which govern asset revenue streams and there’s a lot of variation about how assets function.
There are different ownership groups, some with complicated processes to move things along on a project. Analytical thinking skills are vital, and you need to process new information quickly and thoroughly.
Not Everyone Thinks Like an Accountant
Working with a diverse group of people in your day to day routine is great, but it also presents a challenge. You’re the accountant. You’re working with a lot of non-accountants. They don’t think like you do.
“Don’t just process. Think about it,” Jackson said.
It requires a lot of patience to backtrack in the middle of a conversation. There’s a fair amount of hand-holding different project stakeholders through the accounting logic. The key is to adapt your communication style to what works for the people you’re talking to.
Bayer also covers this when coaching and roleplaying internally.
Communication and Real Estate Accounting
Working in silos is damaging. We know this already. But what so many of us are still working out is how to blend communication and accounting in a way that prevents costly business mistakes.
Katherine’s advice on how to achieve this includes encouraging curiosity and participation among junior staff. She shares that it could be as simple as showing a person where they actually fit into the organization. That guidance is sometimes all it takes to unlock access to someone’s full potential.
“If you’re perceived as a roadblock, people will do everything they can to avoid involving you. If they see you as a ‘safety net’ they’ll call on you without thought,” Jackson said.
As much as accounting is about the numbers, people management is undoubtedly a skill required to excel at property accounting.
Another way to use communication to prevent costly errors is to consider how silos even form to begin with. Today may be a day you’re comfortable saying that nobody works in a silo in your business but if you don’t maintain it, three months from now could look very different. How you model communication within your business is how your team will model communication with all the stakeholders they encounter in the business setting.
No two people are exactly the same, which is why flexibility and adaptability of communication is important in a niche like property accounting. Some people need your patience and understanding while you’re guiding them to grow outside of their comfort zones.
Getting the Right Person for the Job
What do job descriptions and resumes have in common? They’re limiting the perception of a role or a person to what’s listed on a piece of paper. The other common form of bias we use when deciding on who’s right for a job is our affinity for someone’s personality.
The people we like are not always going to be the best fit for the jobs we need done. Katherine’s own experience of this resulted in her encouraging a client to trial a recommended person for a specific project. It was received with hesitation because the client had wanted to work with someone else specifically but Katherine knew the parameters of the project and she knew her team inside out. Her decision turned out to be a major success for the client and she put it down to two things:
- Managers must learn and understand how people work and respond to project-related or environmental stimuli.
- Managers must be willing to be guided by their own insights and experience.
You don’t need to use your most experienced person for every query that emerges. You need someone with enough knowledge who needs minimal support for that specific context.
Real Estate is Changing
Katherine found that real estate was just beginning to take shape, being informed by new spending habits and shopping trends. The COVID-19 pandemic sent it all up in smoke. What would have been continual observations because brainstorming sessions for her team to find new opportunities for assets.
There are hundreds of contrasting studies. Some are proposing that office life will never be the same and others predicting that office culture will bounce back even stronger after the pandemic. The only way we’ll know who’s right is to make it to the end and find out.