Become a Commercial Real Estate Agent in 5 Steps
If you are looking for a new career and considering getting into commercial real estate, there are some things you need to know. We’ll break everything down in this article, and go over the things I wish I knew when I started.
What Is Commercial Real Estate?
Commercial real estate is property for business. They include things like hotels, shopping centers, office buildings, retail stores, etc..
The vast majority of commercial deals are leases, which rent out the space to tenants. The lease terms are typically longer than a regular residential lease. The average lease is between 5 and 10 years long and usually correlates with the size of the company (i.e. bigger companies will typically take out a longer lease than small ones). Leases don’t just include the monthly rent payment. It also includes who takes responsibility for paying property taxes, insurance, and maintenance costs.
There are different factors involved in commercial vs residential real estate. Just because an office space is available for rent, doesn’t mean any business is allowed to operate there. There are zoning laws and regulations to consider.
What Is The Job Like?
Not all real estate jobs are the same. If you are thinking about working in commercial real estate, you should be prepared to commit to this 100% as your full-time job. You won’t have the flexibility of doing this part-time like you can do selling single-family houses. Pursuing a career in commercial real estate is lucrative and very stable, but it takes a while to get there.
In commercial real estate, you’re not selling a dream home to a family. You are providing demographics, environmental research, and statistics to your client. You are not going to know all of this information when you first start. If you want to truly succeed, you will have to become an expert and learn as much as possible about your area. Basically, you’re showing them how they can make lots of money by buying/renting your property.
It’s a different type of sale. Commercial real estate deals take an average of 6 months to a year to close, which means you won’t see a dime for awhile. However, when you do get that big commission check, it will definitely put a smile on your face. A single $20 million deal can result in a $400,000 to $500,000 commission check.
How Much Money Can You Make?
According to the Bureau of Labor Statistics, half of all real estate agents (commercial and residential) were making $48,690 per year in 2018. Commercial real estate agents generally make more than residential real estate agents. According to Indeed, the average salary for commercial real estate agents was $82,345 per year. Agents are typically paid on a commission plus bonus structure.
What are the Qualifications?
First things first. You’ll need to get a real estate license.
There’s no such thing as a commercial license. They (residential, commercial, and industrial) all fall under one license for the entire state. It’s usually pretty easy to obtain. Every state has its own requirements.
However, all states have the same general requirements. You have to take course(s) and a state exam. The courses educate you on basic real estate laws and terminology. The whole process is not hard. The hardest part about it is the content can get a little boring at times.
How do you Find a Brokerage Firm?
If you are new to real estate, you won’t be able to start your own company right away. You legally have to work for a brokerage firm.
Although you’ll be eligible to set up your own company after several years of experience by getting a broker’s or managing broker’s license, the vast majority of agents in commercial real estate will work for one of the big firms. They already have a deeply entrenched position in the space and competing against them on your own will be like David going up against Goliath.
Jumping straight into commercial real estate is hard. Really hard. Here are the 5 steps you should go through to get started in commercial real estate.
Reach out to family members, friends, friends of friends and network to see if anyone knows a commercial real estate agent who will show you the ropes.
Attend networking events and seminars. The great thing about the real estate industry is there is no shortage of conferences, trade shows, activities, etc… to go to. Make sure you go to these “dressed to impress” and have your business cards handy.
If you want to get into commercial real estate right when you get licensed, you really need to know someone. If you don’t have anyone in the industry, your best bet is to start with residential real estate first to get your feet wet for a couple of years. You never know. You might actually enjoy residential real estate better and stay put.
Like any sales job, the key to success is persistence. Keep reaching out and applying to the commercial brokers. Hopefully, you will be building your resume as time goes on with experience and accomplishments. This could take months (if not years).
Working in commercial real estate is fiercely competitive—even more than residential because there are fewer “spots” available. It is important to have a good-looking resume. Unless you have connections already, a college degree is a must for standing out.
You’ll want to consider moving to a large metropolitan or urban area. That is where the biggest brokerage firms have their offices. This will increase your chances of any job openings that become available. A typical office can have 10 to 40 agents. However, you will be spending the majority of your time out in the field with clients.
That also means you will need a reliable source of transportation and professional business attire (i.e. suit and tie).
Research, research, and research some more.
If you want to work in commercial real estate, it’s a good idea to see who the big players are and what they are looking for. They all list their job openings on their website, so you can see exactly what qualifications they want in an ideal candidate.
Here are some of the biggest commercial brokerage firms in the US:
- CBRE – 90,000 employees – $21.3B annual revenue in 2018
- JLL – 88,000 employees – $16.3B annual revenue in 2018
- Cushman & Wakefield – 51,000 employees – $8.2B annual revenue in 2018
- Newmark Knight Frank – 16,000 employees – $1.5B annual revenue in 2018
- Colliers International – 17,000 employees – $2.8B annual revenue in 2018
At the end of the day, working in commercial real estate is a sales job. At the heart of it, it’s about connecting with people and building relationships. Learning the terminology and laws is the easy part. To succeed, you having to be patient, persistent, and committed. This is a long-term game.