Leasing Stigma
Why does it seem like leasing is so frowned upon in the industry? You always here things like “oh they do leasing…”. I know some leasing guys that absolutely crush it; it just seems like there’s a big stigma around them and not really sure why.
The money can be great (huge survivorship bias). However, it isn't investing... it is just sales/client services (not a bad thing just not real estate investing). The right leasing folks add a ton of value (in any asset class), but if you're wired for investing, it seems a little low brow. The good leasing brokers have a great lifestyle, but it is a grind to do it well.
As you get older, you stop caring about the prestige of all that stuff. I have a ton of buddies who are office/industrial leasing brokers, and those guys always know what is going on, and they're the best networked dudes in any given market. You can get a ton of intel from them, and they're always a blast to hang out with/play golf with.
This business takes all kinds of kinds, but if you're naturally very extroverted and very connected it can be a very lucrative/fun career path.
Crazy because the best leasing guys make more money than everyone I know in RE in my peer set.
Absolutely. All the leasing brokers I know in their 40s - 50s are the ones with ski houses / beach houses vs. a lot of the guys who are on the investing side who are still grinding bc their deals blew up in the last cycle and they lost all their carry.
This is so laughable.
First off, the leasing brokers in their 40s or 50s represent something we like to call "survivorship bias". They are the 1% of people who made it big in their field. And you're juxtaposing them with someone who is not a comparable. That leasing broker pulling down $10mm a year? His comp is Jonathan Gray, not some random VP at Blackstone who is grinding out a low 7 figure comp a year because their carry didn't come through.
This constantly comes up on WSO. You can make a lot of money in brokerage (leasing or otherwise). If you have the right personality type, it's a great place to be. But people don't grind their way through that for decades. You either succeed or you don't, and you get winnowed really fast because no one wants to support dead weight who don't bring in deals, whereas a good project manager or analyst in development or acquisitions can have a lovely, low stakes career doing what they do for a W2.
Moreover, people point to the absolute highest earning brokers, the pinnacle of the pyramid, and then try and compare that to some 25 year old in REPE and have their "gotcha!" moment. In real estate in particular, the thing to remember is that the people who take on the riskiest positions, get paid the most. Brokers take 0 risk. Do the math
Agreed, leasing brokers can do very well especially on the tenant side. Landlord brokers can do well but they can max out because they can only handle so many buildings. I think some on the investor side feel that they make too much money for the value they add.
Agree with all comments above. Would add that it is very low barrier to entry relative to IS or principal investing seats which naturally makes it “less impressive” than finding a acq role… I guess.
But prestige is BS and all made up. Some IB/PE look down on CRE roles. Some HF guys look down at IB/PE. And so on.
In the end people who care aren’t making real money and/or are unhappy. Need to justify themselves in other ways.
I never hear of anyone saying it in my day to day, I do hear it on this website though and my hypothesis is because this place has a high concentration of 20 year olds who think they are destined to be the next Jonathan Gray.
Fact remains that the top ~15% of leasing people earn on par with virtually anyone in REPE/Development/IS/D&E etc., and are probably smart enough or connected enough to pivot to those if they wanted to, but have a pretty solide lifestyle and it’d never make sense to do so.
But on the flip side of that coin, it is low barrier to entry and low overhead for a brokerage to bring you on, so the bottom quartile (or half honestly) can be pretty greasy until they are eventually filtered out.
I've said a bitchy thing or two about CRE leasing brokers. 1) Because they run a cartel, especially in certain markets, 2) they seem to have a lot better lifestyles than me (especially in terms of balance), and 3) they control institutions like your local country club at a disproportionate rate than they should, clogging up the golf course and using their clout to push in their dumbass college fraternity brothers, who are often other leasing brokers
Doesn’t have anything to do with money. They’re quasi-industry; that’s why you see responses here like all they can provide is market intel. There is a stigma upon lower-quality leasing brokers in that many of them don’t even care or put in actual work to do anything of value - not uncommon to receive blasts with mistakes, no knowledge of simple questions regarding a building, or doing anything but driving prices up / down depending on what side of the aisle you’re on they are always the bad guy.
I think a lot of it’s jealousy. I’ve given 7 figure commission checks to guys who did nothing more than make an introduction. It hurts to hand over the check but the alternative of having a 100k+ SF building empty is more painful. So you kind of just have to force a smile and hand over the check.
You’d think tenants and landlords could cut out the middle men and make things more profitable for both parties. E.g., come to me without a tenant rep broker and I’ll give you an extra $500k in free rent because I saved a million in broker fees. But for some reason that seems to rarely happen.
I used to do industrial asset management and when it came time for a renewal I saw the tenant and landlord brokers spilt a 1.5M+ commission check on a 5 year lease. Doesn't seem like a bad gig if you can actually land the big buildings or clients. Keep in mind the tenant had a national warehouse presence and the landlord rep was on multiple buildings in the tri state area. I would say there are not many that are successful but the ones that are rake it in. Also spoke with a guy who did landlord rep on an office cluster in a major metro and he has been doing probably 800k a year for the last decade in a somewhat down office market.
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