Commercial Real Estate Hiring: Why Structured Interviews Reduce Risk

Commercial real estate hiring is often treated as a relationship decision. Familiar names, shared history, and industry reputation carry real weight. But research shows that when hiring relies too heavily on informal conversations, decision quality drops.

The video walks through why.

Structured interviews are about twice as predictive of job performance as unstructured conversations, according to decades of industrial-organizational research summarized by the U.S. Office of Personnel Management and a 2022 meta-analysis in the Journal of Applied Psychology.¹ ²

That finding matters more in commercial real estate than in most industries.

CRE is relationship-driven by nature. Everyone knows everyone. That familiarity increases bias, often unintentionally. When interviews are unstructured, likability begins to replace evidence. Strong storytelling can outweigh actual judgment.

Research consistently shows that structured interviews, defined as predetermined, job-related questions asked consistently and evaluated against the same criteria, lead to more accurate hiring decisions and reduced bias. Behavioral and situational questions outperform casual "fit" conversations because they reveal how candidates actually think, prioritize, and make decisions.¹

Senior commercial real estate roles require technical judgment and strategic reasoning under ambiguity. Leaders are expected to make decisions that affect capital allocation, asset performance, client relationships, and long-term risk. Charisma and familiarity don't predict those outcomes. Decision quality does.

Unstructured interviews tend to reward polish, charisma, and storytelling. Structured interviews surface judgment.

There is another factor many firms overlook. Formalizing the interview process changes candidate behavior. When interviews are structured, candidates prepare more seriously. Answers become more specific. The conversation shifts from narrative to substance. Hiring teams get better data to compare across candidates.

Likability still matters in commercial real estate. Relationships always will. But structure ensures that likability does not outweigh evidence.

Commercial real estate hiring mistakes do not stay contained. They show up quickly in execution gaps, missed deals, strained client relationships, and internal disruption. That is why, in CRE, structured interviewing belongs with risk management.

Reach out directly to Kristin here.

Sources

1. U.S. Office of Personnel Management, Structured Interviews. opm.gov/policy-data-oversight/assessment-and-selection/other-assessment-methods/structured-interviews
2. Sackett, P.R., Zhang, C., Berry, C.M., and Lievens, F. (2022). Revisiting meta-analytic estimates of validity in personnel selection: Addressing systematic overcorrection for restriction of range. Journal of Applied Psychology, 107(11), 2040–2068. pubmed.ncbi.nlm.nih.gov/34968080