Exploring Careers in Commercial Real Estate
Many people consider getting into commercial real estate (CRE), and when you take a close look at the business, it’s easy to understand why. There’s a lot of money to be made as a commercial real estate broker, but there’s a tremendous amount of work required as well.
If you’ve been wondering about commercial real estate jobs, you’re not alone. Keep reading to learn how to get into commercial real estate, how much agents get paid, and some of the top commercial real estate companies to work for.
Why Work in Commercial Real Estate?
It takes a particular type of person to build a career in real estate. Unlike most residential agents, who sell homes to the general public on the MLS, commercial real estate agents specialize in much more complex transactions.
For example, CRE agents work in different niches, including office and retail, apartment buildings and mixed-use developments, industrial and distribution property, land sales, and property management.
Agents can also represent multiple real estate players in the space. These include commercial real estate buyers or sellers, landlords or tenants, high net worth individuals, private equity firms, large institutional investors, real estate investment trusts (REITs), and asset managers.
How Commercial Real Estate Agents Get Paid
Compensation for real estate agents usually follows one of four different models:
- Traditional straight commission model where the agent only gets paid when a property is sold or leased.
- Companies may pay hourly compensation to beginner brokers (along with a small commission split) while a new agent is learning the ropes.
- Recurring retainer or fixed fee compensation models are often found when the agent’s work is not transaction-based, such as property management.
- Hybrid compensation models are sometimes used in repositioning projects, such as converting a hotel into a multifamily property. The agent receives an hourly rate plus a commission on each transaction when the development is brought to market.
Average Earnings of a Commercial Real Estate Professional
Compensation (including salary and commission) for someone working in commercial real estate ranges from $86,180 to $115,107 per year. By comparison, residential real estate agents earn an average of $49,261 per year, roughly half of what a skilled CRE agent earns.
Of course, some real estate markets are better than others in terms of compensation. The top 5 highest paying cities in the United States for commercial real estate agents are:
- San Diego
- New York City
How to Get Into Commercial Real Estate
Now let’s talk about how to get into commercial real estate, a field of lucrative potential. There are five general steps to follow if you’re interested in becoming a commercial real estate agent:
1. Get your license
Each state requires new agents to take a certain number of courses and pass a state exam before being awarded a real estate license.
The Association of Real Estate License Law Officials (ARELLO) publishes a state list of real estate agency licensing contact information. The required courses and hours vary by state and range from less than 80 hours in New York to nearly 200 hours in Texas.
Most states also require yearly continuing education. After passing the test and getting your real estate license, you can select continuing education classes focused on different commercial real estate niches.
2. Specialize in a niche
There are a wide variety of asset classes and subclasses in commercial real estate, including medical offices, neighborhood strip retail properties, transit-oriented mixed-use development, extended stay hotels, and last-mile distribution centers.
Real estate agents who specialize in a niche develop a deeper knowledge about the specialty and find it easier to target clients and build a reputation in the chosen field.
3. Join a professional organization
Networking is the name of the game in commercial real estate, with the best agents understanding that the business is as much about who you know as what you know.
Commercial real estate investors look for trustworthy agents to help minimize risk, boost deal credibility, and act as a guide to making the best investment choices.
Some of the best-known commercial real estate trade organizations include:
- International Council of Shopping Centers (ICSC)
- Building Owners and Managers Association (BOMA) International
- Certified Commercial Investment Member (CCIM)
- National Association of Realtors, Commercial (NAR)
- NAIOP Commercial Real Estate Development Association
- Society of Industrial and Office Realtors (SIOR)
- National Multi-Housing Council (NMHC)
- Commercial Real Estate Women (CREW) Network
4. Market yourself
Creating a plan to market yourself is another step to take when you’re getting into real estate. After choosing a niche, identify properties and target clients, the unique selling point (USP) that makes you different from other CRE agents out there, and a marketing plan budget and guidelines.
5. Find a commercial real estate firm
Some new agents join a real estate firm so that they can handle both residential and commercial transactions. Residential deals are often more frequent and easier to close, so they can provide income while you work on more lucrative commercial transactions.
The drawback to handling both types of transactions is that clients and other CRE brokers may not view you as a credible commercial real estate broker when you work for a firm that sells homes. As such, many new agents choose to interview with one of the top companies in their market.
Top Commercial Real Estate Companies
Investment sales and leasing transactions help to make these ten firms among the top commercial real estate companies to help jump-start your career. Firms are ranked by square feet leased worldwide in 2021, except for Newmark which is leasing activity in North America only:
|Company||Sales Volume||Leasing (SF)||Brokers|
|CBRE||$181.6 billion||1.2 billion||9,450|
|Cushman & Wakefield||$88 billion||738 million||4,036|
|Newmark||$72.6 billion||200 million||1,941|
|Colliers||$23.5 billion||403 million||2,427|
|Lee & Associates||$10 billion||285 million||1,092|
|NAI Global||$17 billion||166 million||6,000|
|Marcus & Millichap||$43.4 billion||Data pending||2,097|
|Avison Young||$9.9 billion||80.3 million||1,937|
|TCN Worldwide||$21.8 billion||64.9 million||1,500|
|SVN International Corp.||$12.5 billion||29.2 million||1,340|
Is a Career in Commercial Real Estate Right for You?
There are some significant differences between a career in commercial real estate versus residential real estate. For a career in commercial real estate, educational requirements and training are more specialized, properties are more complex, and transaction prices are higher. The clientele base in commercial real estate is very different from homebuyers. Commercial agents often work with clients who are buying and selling property as a form of investment, including retail, industrial, office, and multifamily commercial real estate.