5 Things that Determine Your Success as a Commercial Real Estate Broker

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Those of you looking to break into commercial real estate brokerage careers have a number of factors to consider. These will determine your career path, income level, ability to be successful, and how enjoyable you find your job.

How To Be A Successful Commercial Real Estate Broker

There are a number of elements to consider when starting your commercial real estate career but we've narrowed them down to five key components that will set you ahead of the competition.

The following five factors are essential to your success as a commercial real estate agent.

Your Company Determines Success

The top five commercial real estate brands according to The Lipsey Company are as follows:

  1. CBRE
  2. Colliers International
  3. Jones Lang LaSalle
  4. Cushman & Wakefield
  5. Eastdil Secured

The importance of working for a reputable commercial real estate company cannot be stressed enough. Of the 25 service providers ranked the five I have listed are ahead of the game on reputation. While the top 25 list can be debated, what isn't debatable is that CBRE dominates the landscape.

Below are a few of the ways CBRE has been recognized as an industry leader.

Until you build your reputation, your company name will get your foot in the door more than your name alone ever could. CBRE, Colliers, JLL, etc, are known international entities which provide clients with the security and success stories they are looking for.

There are also more informal rankings in individual cities. A company further down on the Lipsey Company list, nationally and internationally, can still do exceptional work in their specific, target markets. Denver comes to mind as a place where the typical hierarchy doesn't necessarily apply.

Your Market Plays A Key Role In Success

While investment banking is highly centered in New York City, commercial real estate brokerage is big business in most major cities. They typically have more commercial activity and higher broker fees than smaller metro areas. While New York City, Los Angeles, Chicago, etc. are huge markets also consider the strength of smaller local commercial real estate markets. Brokers in Houston, San Francisco, and Seattle, for example, are finding loads of success with development projects signing huge leases before they are even built.

In smaller markets, the deals are smaller, the companies are smaller, and the fees are smaller than the major markets. However, breaking into one of the above-listed companies in New York City is much more difficult than in Atlanta. In a smaller market, you can have a more immediate influence. Also, smaller markets carry the advantage of higher commission percentages due to less competition and a handful of brokers can dominate the market. There are five brokers in my city who literally have over 75 percent of the office landlord market locked down.

The Specialty You Choose Plays A Factor

As the industry matures more people are finding niches within the commercial real estate market Major specializations include office, industrial, and retail. These can sometimes be broken down further based on people and teams, and into tenant rep and agency-landlord representatives.

An additional specialization is investment sales. Selling, instead of leasing, a property requires more financial knowledge and probably sets you up better for exit opportunities if a brokerage role is not your long-term goal. Some markets even have further specializations such as hotels, resorts, or corporate solutions, which is a lot like management consulting but with a real estate focus.

Certain people and personality types gravitate to certain specializations. Industrial brokers are usually more down to earth and blue collar. They are the type to wear button down collars and boots with their suits as they'll be walking through warehouses and industrial plants all day. They are usually more no bullshit-types, the salt of the earth so to say.

Office brokers are by far the most common and personify the stereotype, if there is one, of a commercial real estate broker. Corporate, business-like, and perhaps even banker-esque, office brokers deal with businesses and building owner groups and dress and carry themselves accordingly. Think Mad Men if anything.

Retail brokers might be the exact opposite. They are dealing with landlords who own strip malls or the first floor of buildings and their tenants are mom and pop stores and major retail chains alike. Typically high energy, a little pushy, and more on the sales side than consulting. Retail brokers gather every year for a conference in Vegas. You get the point.

Your specialty obviously determines what types of properties you represent, but it also determines the sorts of people you interact with, the environment you will be in, and required knowledge you need during the process. Many people will say that a specialization chooses you as much as you choose it.

Firm Culture Determines Broker Success

Starting out in commercial real estate, your superiors basically control your bank account. Whether or not you have a draw, get put on listings, get a decent split, benefits, or paid when you should, is all determined by your superiors. Unlike banking, where salaries are almost lockstep and bonuses by firm get charted and distributed, commercial real estate income numbers vary wildly by market, company, specialization, and group.

When you start, you could be groomed in research with a salary, put on a solid team with a draw, or be given a phone and a computer and told 'good luck' on straight commission. I've said before that almost everyone burns out within a year or two. Unlike banking, however, you don't burn out with an $80k salary plus a huge bonus. You burn out because you didn't make any money. A company that fosters your growth and wants you to succeed is easily the best gig to get into. Being an employee and not a contractor is key.

Another important cultural distinction is how the office functions. Certain places lock their files, their doors, and don't talk to one another in fear of one of their office mates stealing a client. This is stupid and inefficient. Some firms have a 20 percent referral fee. For example, if an office broker gets an industrial assignment through a connection, the office broker hands it off to an industrial specialist for a 20 percent cut. The client benefits by having a broker who knows the market and both brokers benefit as well.

Team structure is also important. A junior broker-senior broker team that functions well is a thing of beauty. The junior guy does the legwork with a connection that he wouldn't otherwise have and the senior guy closes the deal with more time for sourcing future clients.

A minimum 50/50 split is what you're looking for - both with your co-broker and between you and your firm. I've heard some 20/80 or even 10/90 nonsense. That's atrocious and you'll never make any money. 40/60 isn't bad starting out, but you want to get to 50 and over as soon as possible. These splits are negotiated the same way salaries are.

Ultimately, you want a place where coworkers understand that everyone makes more money when there's a team dynamic. Everyone then gets and retains more clients, and dominates their piece of the market. Places, where distrust and competition are more important, are not functional.

The Right Personality Type Is Essential

Finally, the intangibles. You can work on self-improvement and transform weaknesses into strengths but there are simply certain types of people who succeed in this industry and those who don't. It isn't about the hard-sales, ABC lifestyle either. As a broker, you are simultaneously an architect, contractor, salesman, lawyer, designer, management consultant, and financial analyst without actually being any.

Watch this video for more advice on starting your commercial real estate career.

Can you manage a lifestyle on commission knowing if you don't close a deal, you don't eat? Can you deposit a six-figure check and not blow it all because you might not be getting paid for the next eight months? It takes a certain person to be able to ride these highs and lows.

There are several approaches and personality styles, but successful brokers are personable and driven to a fault. You need to be 'that guy or gal' otherwise you're doomed to toil in mediocrity or worse. In commercial real estate brokerage, 'fit' determines everything. You have to fit the industry, fit your company, fit your team, fit the lifestyle, and fit your specialization. Do you have what it takes?

Read More About Careers in Real Estate Brokerage on WSO

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Comments (28)

Best Response
May 9, 2013

Yay, my former firm is in that top 5.

I think "Your Personality" may be far and away the most critical thing. You're basically an entrepreneur with group health insurance provided. If you can't be an entrepreneur you can't be a commercial broker or really anything else in real estate.

    • 3
May 9, 2013
DCDepository:

Yay, my former firm is in that top 5.

I think "Your Personality" may be far and away the most critical thing. You're basically an entrepreneur with group health insurance provided. If you can't be an entrepreneur you can't be a commercial broker or really anything else in real estate.

Great comment

May 9, 2013

Thanks for the post man, you have any thoughts on Marcus and Millichap?

May 9, 2013
Jeezy:

Thanks for the post man, you have any thoughts on Marcus and Millichap?

They're a known company but for a firm that size it really depends on the market. Some cities might not have them. Other cities they could be one of the best.

May 9, 2013
CRE:

Other cities they could be one of the best.

... but probably wouldn't be, let's not kid ourselves

May 9, 2013
Jeezy:

Thanks for the post man, you have any thoughts on Marcus and Millichap?

Someone please chime in on M&M!!!

May 9, 2013

I think you should emphasize more on the importance of THE team.

I believe your success as a broker is determined by one thing only: your team. During my time in brokerage, my team killed it in the Mid-Atlantic region. How do I know this? Well many clients had us compete with "top" brokerage firms, and during my time there we only lost one listing (Colliers overvalued the property and failed to get ONE offer)!

Working alongside successful brokers will give you the platform to take part in a wide range of transactions. You'll work like them. Think like them. Heck, even breath like them. My team put me in a great position because after about a year I had multiple headhunters reach out to me with opportunities at top REPE and development firms. I owe it all to my team. No buyside for me without them.

Btw, your personality section is 100% spot on.

    • 1
May 10, 2013
fez:

I think you should emphasize more on the importance of THE team.

I believe your success as a broker is determined by one thing only: your team. During my time in brokerage, my team killed it in the Mid-Atlantic region. How do I know this? Well many clients had us compete with "top" brokerage firms, and during my time there we only lost one listing (Colliers overvalued the property and failed to get ONE offer)!

Working alongside successful brokers will give you the platform to take part in a wide range of transactions. You'll work like them. Think like them. Heck, even breath like them. My team put me in a great position because after about a year I had multiple headhunters reach out to me with opportunities at top REPE and development firms. I owe it all to my team. No buyside for me without them.

Btw, your personality section is 100% spot on.

Another terrific post. SB for you, brother

May 12, 2013

I heard people break into CRE without undergrad degrees and can do very well for themselves. (didn't finish or just didn't go to a 4 year all together.) Is this actually true? What are the chances someone can do this nowadays (with a good amount of RE experience)?

May 14, 2013
Udechukwu:

I heard people break into CRE without undergrad degrees and can do very well for themselves. (didn't finish or just didn't go to a 4 year all together.) Is this actually true? What are the chances someone can do this nowadays (with a good amount of RE experience)?

It happens, but like every Bill Gates dropping out of Harvard then becoming a billionaire story, these ancedotes are the exception, not the rule. There is a girl at my office who was an admin for years with only an associate's degree I believe, eventually became a broker, and is now a VP. She will never be a rainmaker or a heavy hitter, but she does alright I think.

Remember, the bigger the market, the better the firm, and the longer you wait - the less likely you can break in without a quality education. CRE brokerage is getting more and more corporate every year. Don't even think about getting into REPE or a REIT without a degree already.

Additionally, residential experience is usually looked at as a negative. Residential agents are very much so looked down upon by commercial brokers - similar to how a investment banker would look down upon a retail branch banker.

May 14, 2013
CRE:
Udechukwu:

I heard people break into CRE without undergrad degrees and can do very well for themselves. (didn't finish or just didn't go to a 4 year all together.) Is this actually true? What are the chances someone can do this nowadays (with a good amount of RE experience)?

It happens, but like every Bill Gates dropping out of Harvard then becoming a billionaire story, these ancedotes are the exception, not the rule. There is a girl at my office who was an admin for years with only an associate's degree I believe, eventually became a broker, and is now a VP. She will never be a rainmaker or a heavy hitter, but she does alright I think.

Remember, the bigger the market, the better the firm, and the longer you wait - the less likely you can break in without a quality education. CRE brokerage is getting more and more corporate every year. Don't even think about getting into REPE or a REIT without a degree already.

Additionally, residential experience is usually looked at as a negative. Residential agents are very much so looked down upon by commercial brokers - similar to how a investment banker would look down upon a retail branch banker.

I'm not planning to do this by any means. I was just very curious. One of my teachers I had my senior year of HS had told me about their best friend that went this route who made a killing. Very entrepreneurial like mindset, no formal education just a RE license and broke into a commercial brokerage. But then again that was back in the day. Times have definitely changed.

Edit:

Also, why exactly are residential brokers/agents looked down upon? I know some very intelligent, professional, and hard working individuals who work in residential and do very well. I do agree there are some shitty and unprofessional people out there working in that industry but that goes with any.

I find that pretty silly that professionals look down at others in different industries. As long as you work hard and make on honest living I don't see the problem. Sure some jobs might require more out of a person but those jobs aren't for everyone. Maybe that's just me though.

May 14, 2013
CRE:
Udechukwu:

I heard people break into CRE without undergrad degrees and can do very well for themselves. (didn't finish or just didn't go to a 4 year all together.) Is this actually true? What are the chances someone can do this nowadays (with a good amount of RE experience)?

It happens, but like every Bill Gates dropping out of Harvard then becoming a billionaire story, these ancedotes are the exception, not the rule. There is a girl at my office who was an admin for years with only an associate's degree I believe, eventually became a broker, and is now a VP. She will never be a rainmaker or a heavy hitter, but she does alright I think.

Remember, the bigger the market, the better the firm, and the longer you wait - the less likely you can break in without a quality education. CRE brokerage is getting more and more corporate every year. Don't even think about getting into REPE or a REIT without a degree already.

Additionally, residential experience is usually looked at as a negative. Residential agents are very much so looked down upon by commercial brokers - similar to how a investment banker would look down upon a retail branch banker.

This is true with regard to how people look down on what careers. I'm from an investment banking and commercial real estate background. I held the same type of contempt for the "smaller" players. The thing is, smart guys can come into these "small" ponds and tear it up. In my bank's market, virtually all of the top residential real estate brokers have college degrees, ranging from places such as James Madison University to the University of Virginia and Georgetown. I even know a top broker with a law degree. What I've come to realize is that a job for many people is a title that they carry with pride. For others, a job is a way to make a living. If a person with our background can leave our pride at home we'll realize that the "retail" market is where most of the money is at.

    • 1
Oct 5, 2017

Hows the transfer from brokerage to REIT / REPE? Possible? Difficult?

May 31, 2013

Thank you so much for this write up. Best info and detail I have found by far.

Opstar lifestyle, might not make it

Jun 6, 2013
Jamin:

Thank you so much for this write up. Best info and detail I have found by far.

Thanks for the shout out. I've been crazy busy, but I should have a new blog post soon enough

Jul 9, 2013

Is it hard to change locations as a CRE Broker? Basically if you start working in one city is it hard to move somewhere else and work there? It seems to me like you have to pick a city early on and build a reputation there making it hard to switch to another city and start over. Am I right?

Jul 16, 2013
Matt-Harbert:

Is it hard to change locations as a CRE Broker? Basically if you start working in one city is it hard to move somewhere else and work there? It seems to me like you have to pick a city early on and build a reputation there making it hard to switch to another city and start over. Am I right?

Yes, you pretty much nailed it. I wouldn't work somewhere more than a small handful of years if it's not the city you want to work forever in, and once you get established, it would be an enormous pay cut to leave.

Feb 2, 2017

I'm Derose & Appelbaum professionals in Commercial Leasing in San Francisco tell, you are sharing very useful information to real estate students.

Mar 8, 2017

I have really enjoyed your article that is informative. I got a good idea after reading this. I'm working in realestateindia. I agree with your opinion that importance of working for a reputable company in commercial real estate, especially in brokerage, cannot be stressed enough. Thanks for sharing this kind of information.

Oct 6, 2017

Most brokers can't tell me what part of the client's journey they are most needed for. It's not specific to CRE, but outsourcing has everything to do with success. Progressively outsourcing EVERYTHING so that you can do more of your 80/20's. I'm going to plug my company here, but we all know the classic roles of a business, so, everyone knows to hire an assistant asap if you suck at admin (even if you don't suck at admin). But even further than that, why do your own lead gen when there are companies who specialize in CRE lead gen specifically? Let us do what we do best so that you can do more of what you do best. If you don't know what that is, it might be hindering your growth.

Feb 2, 2018

Regarding your rankings:

"1. CBRE
2. Colliers International
3. Jones Lang LaSalle
4. Cushman & Wakefield
5. Eastdil Secured"

I thought colliers was looked down upon (at least from my research). I heard that they don't get as many institutional clients as JLL/CBRE/CW?

Feb 2, 2018

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