Working for a draw at JLL?

I am currently going through the interview process to work on a top brokerage team at JLL in a top 10 market. I graduated from a non-target about eight months ago. Since then I've been working for a PE consulting firm doing mostly due diligence on the buy-side of PE transactions. Although the work is very interesting and I'm doing well, I'd really like to get into commercial real estate.

After reading through discussions on here, I've limited my choices on firms to CBRE, JLL, and Cush-Wake. So far I've only interviewed with JLL and am going back for a third interview this coming week. The team I'm interviewing with is comprised of 5-8 members, lead by an MD (over 25 years in the business, very reputable in the market) - they focus on both IS, tenant rep/landlord rep. I think there is great learning potential for me at JLL but am cautious about working for a draw, especially because it's about 15% lower than my current salary (before bonus).

Could anyone give their opinion on working for a draw? Also, if anyone could give insight on their thoughts of the position / commercial real estate brokerage in general, I would really appreciate it!

Thanks in advance!

 

If you're trying to become a broker, you will be on a draw at any of those firms. For a dose of perspective, remember that your draw is a good thing. Your draw does not exist as opposed to a salary, it exists as opposed to a 100% commission based compensation structure.

The exact number of prospective brokers who strike out is different based on who you ask, but most people strike out and never make any money especially in the top markets. It is very likely to be ~12 months before you close a deal, and even then it's quite possible that it will not exceed your draw initially. There is big upside in CRE brokerage, but you definitely need to have balls.

 
MLE4444:
If you're trying to become a broker, you will be on a draw at any of those firms.

This really shouldn't be taken for granted. In the market I worked, only 1 in 4 of the big named brokerage firms offered a draw. It's definitely not a given, especially when management can find a rich kid whose parents will support him until he starts making his own money to plug into a role you want.

MLE4444:
For a dose of perspective, remember that your draw is a good thing.

I mean, it is "good" in a sense of "you get a check every two weeks and can eat" but it is still debt.

Commercial Real Estate Developer
 
Best Response

There is nothing wrong with a draw, think of it as your salary for the start, but know..you will need to pay it back. I don't want to scare you, but I know many guys who took 4-5 years to pay their draws back. For instance, they made no money year 1, paid off year 1 in year 2, etc. And slowly clawed their way out. Many people that I know went on half draw by year 3/4 and slowly worked out of their draw. I think brokerage is a great place to be, but you need to know it is what you want. I don't know your interests, but I would say try to focus on investment sales to begin with because if you decide brokerage is not for you, but real estate is where you want to stay, at least you have basic experience with underwriting, which will give you a wider range of options for a second job. Tenant/agency leasing representation can be extremely lucrative, but the skill set learned is not as applicable to many other areas of real estate. However, you can move to work for a landlord in their leasing department and still make a large amount of money. Additionally, there are people that move from leasing brokerage to REPE/acquisitions, but it is much tougher to do.

Brokerage teaches you a large amount about the market in a short period of time. It is also a great way to begin networking.

 

@"pudding"" @"MLE4444" thank you for your input and I appreciate the advice. Although the particular team does investment sales, I would be focusing on tenant representation to start. If I get an offer/decide to take it, I will hopefully be using this job as a learning opportunity to learn everything possible about the market and network like a mad man.

With that said, in your opinions, is would JLL look as strong as any on a resume - whether that is to move into solely investment sales or REPE/acquisitions? Also, any insight on how leasing/investment sales would look on a resume when applying to MBA programs?

 

Mogul_wannabe, I think JLL is strong on a resume. They are a top firm and one of the largest platforms in the world to become a salesperson on. I cannot comment on how it looks for MBA. Tenant representation may, and i stress may, get you familiar with concepts of valuation, but most likely, you won't see it. Most likely, you will be exposed to it just through learning about the market and how different assets are trading.

Your first year will most likely be spent cold calling and trying to get meetings as well as learning the market. Hopefully your team brings you onto deals to teach you, even if it means that you get a small percentage of the deal, you will learn.Others can chime in hear, but I would suggest asking them two main questions during your interview:

1) What is your purpose for brining on a junior at this point in time? This will allow you to find out if their team is growing and if they will help teach you by bringing you into current deals or new deals. It will also cue you into if they are bringing on a junior for the right reasons - such as they are getting so busy they need someone to help. It could also cue you into if they are bringing on a junior for the wrong reason - feeling pressure from the head of the office to bring a junior on because that is how new people are brought into the system. This happens at offices.

2) Will I be assisting in certain deals or will I only work on what I bring in? This will allow you to assess if they care about you learning. In my opinion, they should bring you onto a few deals so you can learn, though not all senior brokers will do this.

In my humble opinion, if they answer these two questions well, you may have found a good team to work under. Brokerage is a very hard job. You will be making 50 plus cold calls a day and may go weeks without getting a meeting. Because of this, you will need to make sure that you have a solid team supporting you and making sure you are learning skills and not just cold calling. You will want to learn how to abstract a lease, perform a remaining obligation analysis, perform a survey, and really learn sales skills. If anything, the job will teach you how to cultivate a network and allow you to learn people skills, which are of utmost importance.

 

JLL is a good name to have on your resume. You need to be careful and diligently research what exactly you will be doing on a tenant rep team. Having a good mentor and senior partners is arguably more crucial in brokerage than any other career track, and a good team can make or break your experience. The danger of working on the tenant side is that the majority of junior brokers are just cold calling machines who are not necessarily brought on to other deals to learn how transactions are sourced and worked, which is obviously very important. See if you can negotiate with your prospective team to get this exposure (whether in the form of participating with lease negotiations, going on tours, sitting in on presentations) and pitch it as a mutual investment in the team's future success.

As @pudding stated, almost any shop you go to will have you working on a draw...it is not a bad thing. He is spot on that you should expect to be clipping Kraft coupons for mac and cheese for the first year, scraping by the second year, and start to make some real money somewhere at the 3 year mark. I think landlord rep is a much better opportunity with better exit options--you get to interact with owners and build a solid network, learn how different operators thinks about RE deals (REIT vs PE fund very different for ex)...easier story to sell down the road in other RE jobs than tenant brokerage where you are basically finding people office space.

 
mogul_wannabe:

Could anyone give their opinion on working for a draw? Also, if anyone could give insight on their thoughts of the position / commercial real estate brokerage in general, I would really appreciate it!

Thanks in advance!

Working for a draw is better than working for straight commission when you're starting out, but it can be scary taking on that type of debt to a company, especially when the company has a lot of influence over your success.

CRE brokerage is the best sales position in the world, if you like sales. I hated it, however.

Commercial Real Estate Developer
 

This is dependent upon team, but if you go into brokerage, and can't claw your way out of the draw, many of the senior brokers will not force you to pay them back. They realize that they will never get the money back. If the relationship works however, the senior broker knows that they can make a killing off of a junior and that is why they use this system.

 

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