Career Advice needed as a CRE Broker
Hello everyone,
I would appreciate if you guys could chime in on my situation with an objective view.
I recently finished my undergrad at a mid-tier school and majored in business administration. I then started to speak with a bunch of brokers and decided to join this team of 2 brokers who got 30+ yrs in the industry. The reason I joined was because these veterans (now my partners) have very strong relationships with buyers who can buy up lots of multifamily and commercial assets. Long story short, It's been 13 months since I made a sale and I'm starting to question myself. To be fair I only pursue owners of $10M portfolios because my clients prefer to buy larger assets than a bunch of smaller ones. In my second year in the industry I am getting much closer. For example, as of now my team and I are working with a owner and going back and forth on working out the terms of the deal for a commercial portfolio but nothing solid yet :(
Side note: Recently I met another broker who functions as a broker to other brokers... but he has introduced me to a trustworthy seller's agent whose client is looking to sell a larger portfolio and we're working together to get it done.
My reasoning for staying with this small unknown team:
i) Larger commission splits and more control relative to what a person can expect at CBRE as a new broker
ii) The potential sales volume that can be achieved with this team is very large because of the great relationship my senior partners have with their buyers. I for one don't have a network of buyers.
iii) If my team can sell a few portfolios soon, I can finally create a CRE brokerage company.
My questions are:
a) Should I stick it out for a few more years before thinking about joining a firm like CBRE?
b) Is it wise to work with brokers who are basically just intermediaries to other intermediaries?
c) Anything else I may need to know that I haven't covered on here?
Thank you for listening guys & gals,
The only real way to make it in brokerage is to be on the sell side. “Buyers brokers” have zero control over their deal flow. It sounds like your partners are the dreaded “boomer brokers” I see so often, who have no specific asset class, and try and eke out a living by ramming together a deal or two a year.
if you haven’t made a sale in 12 months it means 1) they don’t have relationships that are actually that meaningful 2) they aren’t allowing you to leverage their relationships (so what’s the point of being their “partner”) 3) both
Try and get into a reputable shop that has a specialization and you’ll be 100x better off
tldr; I hate boomer brokers
Hi,
Thank you for your response.
Here's some more context:
We were very close to closing a $50 Nashville MF portfolio up until the Seller decided to up their price by $10M at the last mile. The other thing is, my partners only go after off-market properties because the clients don't want to buy on market. I also have contacted about 500 private firms that own properties and everyone one of them said "We don't sell off-market" and so I been stuck in this no-sale rut. What I realized was how funds want to buy off-market but usually cannot get it to happen.
It's a hard choice to make when deciding on leaving them or not.
Thank you,
I’m a little confused here. So your partners clients (buyers) only want to buy ‘off market’ deals. But they won’t take deals from sellers on market? A client to a sales broker is anyone who is willing to buy a deal. You run a full marketing process to find the buyer who will pay a top price. Do the people you work with ever run a full marketing process?
Also, my buyer clients don't sell on-market. they usually sell off-market to those they know well.
For example, during the height of pandemic in 2020, our client went to Blackstone and etc to know if they would buy their Apartment portfolio. BX and Brookfield didn't like the portfolio too much and so he asked us to find some buyers. Long story short the buyers we went for didn't like it either and the seller sold it to a buddy of his for a 9% discount. We didn't get paid even though the team spent 1.5yrs on it.
Note: it was a portfolio of 10,000 units across the US. Sadly we didn't close :(
Hi,
We only go after off-market deals and our clients don't touch on-market deals. We tried and they don't pursue it. Our clients are a group of very private family offices and are not known publicly. They 90% of the time buy and sell off-market.
And no, we don't list and/or run marketing processes for properties. A good analogy would be to think of us as commissioned-acquisitions team for a PE fund.
This is why I been having serious doubts about my position and wanted to get the WOS community's POV.
Thank you once again for all the replies.
You’re missing the point. You weren’t close on the deal, you were $10mm off. If you were on the sell side, there would be 30 offers on the table and you would be in the drivers seat. As a “buyer broker” you have zero control over your deal pipeline, and from what it sounds like, these “buyers” are bottom feeders who aren’t competitive on pricing. They don’t care if you waste all your time and go broke, they are just using you as an unpaid acquisitions guy. Do you really think that sell side brokerages don’t have (better) relationships with buyers? Do you even realize that outside of NNN and local yokel BS, buy-side brokers are basically non existent?
You’re wasting your time. You haven’t closed a deal in over a year. If you can’t see this, and still feel it’s a hard decision then I don’t know what to tell you. Get to a sell side brokerage as soon as humanly possible. Don’t even show up on Monday, your time is better spent networking to find a better job, and I’m 1000% serious.
Hi,
Thank you for the reply.
I'll start speaking with as many broker teams as I can for my area. If I were to leave then I guess it makes sense to either join CBRE's national investment sales team or JLL correct national investment sales?
Hate to break it to you, but CBRE and JLL don’t hire newbies to national teams. Those are highly competitive and political internally.
Main take away here, is that you are spaghetti being thrown at a wall by these two brokers. No real players are “buyer brokers” in this game. You list and lease, that’s it. Buyers come to you direct. Second, you need deal volume under your belt. Deal volume = closed deals. “Potential” deals = 0. Pipeline = 0. Almost closed = 0. Forget about portfolios, get single deals done. You need experience. Portfolios are often sold direct without brokers. And when they are sold with brokers, the listing team works direct with buyers. Even if you bring a buyer, fees aren’t paid to buy-side “brokers”.
Wouldn’t you rather make less of something than all of nothing? Big name CRE firms can provide experience (if you get in). Maybe you take a small fraction of a fee, and it’s small deals starting out, but you might be put on small assignments with big name clients. Resume building names that build your career.
Join a team at a big firm and be useful on real deals. Prove yourself and don’t be delusional in thinking you don’t have to earn your experience and earn your reputation. No one cares about “almost”.
What others have said is accurate, with one exception. Go to the "clients" and tell them that you want acquisitions control. They set a deal size and yeild threshholds and you and your team go out and execute on the deals from a broker position. If you can get this then that completely changes the ballgame. But if you can't then I agree it is time to jump ship. Also a $50M deal isn't that large.
Hi,
I sent a DM to you!
The clients I work for have given us a detailed mandate about what properties to buy, the deal size to go after, the yields needed, the markets to pursue, and more.
That's what I've been doing for a while now, I would cold call and email Owners/banks/PE funds about the possibility of entertaining our offers. 90% of the owners say they only sell on-market OR that "We don't sell".
Thank you for the reply.
I was in a similar spot, was at a brokerage for 2 years and the two brokers I worked with (at a larger overall firm but not a CBRE) had sold $120mm in the past year together. I thought great team but that wasn't the case. You have to realize in general there is a reason they're at where they are, there's a reason they prefer a smaller or their own firm and if they are not doing hundreds of millions+ a year in business they are not legit. My first year with them they sold nothing, I didn't get anywhere either and had terrible traction/no direction from them so I was spinning my wheels. A lot of the same stories you shared - had a $60mm deal got a $50mm offer from a broker in our office went no where. Only off market, they were fine with the 1-2 deals a year and overall not motivated to succeed. My thoughts are you will find more motivated people at larger firms (CBRE). These guys seem like my bosses I work for fine with not putting in 100% they don't show up at 7-8am and work until 7pm. They don't have answers to a lot of your questions.
Compare this to someone I know who is on a $1 billion team and his boss who is widely more successful than the guys I worked for shows up at 7am still, beats in the hunger guys, is incredibly knowledgable. I was in the same place you were very lost because these guys candidly don't care about your future, maybe you're on revenue split but in general these guys are fine making $1-200k a year (nothing wrong with it) and do not care if you fail and if you succeed they will take their cut. What you need to do is leave, you may not close a deal in the next year like was the case with me. Even if you go to a CBRE and make 0 you have legit contacts over the next year, you have a name on your resume so when you move on from there you have prestige.
The way I went about it was reach out to alumni at CBRE, reach out to guys closing deals in your market. Send them cold emails saying you have worked a year at xyz firm looking to move to a bigger firm and if you can get on a call. Other ways that work is legit saying you've worked a year at xyz firm and saying you are interested in joining his team, you have expertise in whatever asset class they focus on (actually do and know what you're talking about) ask for a phone call. Don't be too eager, know your worth, embellish your story of working but seeing a lot more traction at tother firms and ability to learn and see more deals. I guarantee they do not get a lot of cold emails from people looking to join their team - this will show your actual interest. Ask to grab coffee if they may have an opportunity, be willing to take all commission WITH revenue sharing, hint all of these teams should be sharing commission with all members especially you an early employee so yo can survive. They may also have a salary with commission, say you're willing to do whatever it takes.
Let me know if you have any questions.
Also in terms of deal flow you should have 10-15 things in different stages. You need that because many will fall apart like you've seen. I was in the same spot with 1-5 things in stages and it never went anywhere you need volume which you will find at the larger more successful shops. I'm on the principal side now and even the best brokers people try to not use if they have a relationship so it's tough for even them too.
Would you say this advice about emailing to join a team applies to the development / acquisitions side as well. I think it does but just want to confirm.
Yes, that's the one thing brokerage helps with I have no problem emailing anyone asking to get on a call. For acquisitions/development I would apply to a role and literally cold email the head of development, an dev associate or the head of acquisitions and someone more my age like an acquisitions analyst. I would also ask friends or people i had spoken to before and built some sort of a relationship with "hey I saw you were connected to xyz on Linkedin, I recently applied to an acquisitions/dev role there can you connect me".
On these cold emails I would introduce myself "I graduated from xyz in x year, I've worked in brokerage for the past two years. I recently applied to x role and am interested in getting on a call to learn more about your day to day" something like that. Did not get many responses, but even if you do and don't move forward stay in touch if they're open to it and build a relationship. May be opportunities in the future.
Also have your modeling down before you reach out and keep working at it. If you get a first round it could be a week or even a few days before you take a modeling exam so you can't really get proficient in that time. Justin Kivel helped a ton on Udemny.
I'll add a few points (note, my POV is from the institutional developer world, not as a broker, for what its worth)...
- The world of CRE assets has been getting more and more institutional every year since the 70s (has to do with a law called ERISA, but that's another story)
- More asset classes have become "institutional" (like SFHs/BFR at the wildest end), and nobody even talks "four food groups" anymore
- Apartments are leading the charge (sounds like where OP is focusing), and even sub 50 unit bldgs are entering institutional portfolios, and the days of the "mom and pop" owner of a 200 unit complex are coming to an end as they sell
- Private buyers (i.e. mom-pop, which sound like the OPs buyers, or some form thereof) are having more and more time competing to buy, and this is unlikely to change anytime soon
- SOOO... the world the OP is in, where the seniors of this firm used to make a lot of money, is frankly getting smaller and smaller
Thus, if it isn't working now (which it seems it isn't), I can't really see much hope of it getting better, this may have worked for the old guys, but I wouldn't bank on it working for the next generation (this happens in lots of industries... go talk to "stock brokers" from the 80s....). So... what should you do?
- Network/apply for jobs where you want to work (shocker advice I know..), but I'd recommend being open/flexible (tbh, not sure if this experience is going to get valued a ton by a lot of shops, I could be wrong, this is very YMMV..)
- Places like CBRE/JLL are really really hard to get hired into on a good IS platform (even the private client groups), and while easier at the lower tier institutional shops (like Avison Young, Colliers, etc... who are very legit in many markets I'll note) these are NOT walk on jobs (your post implies you could join this world at anytime, trust me, you can't, getting hired on the IS/DE teams of those firms is just about as hard as BB I-banking in many markets, just a fact).. and the longer you do this current type of work, the less attractive you will be in the big name broker shop world (unless you can bring in clients/deals day one that they want, your story does not suggest that is trending your direction).
- You will probably need to take a less "exciting" job (meaning, more fixed salary + bonus) and give up the immediate "unlimited" earning potential (if you want that possibility, go join Marcus & Millichap, you can read WSO for more that one). Personally, I'd recommend thinking long-term on this, that's what matters.
- Is there a world of private deals and deal making? SURE, is it hard/crowded? YES, and it always has been. I don't think making it in this world has ever been "easy", but I think you know this!
- Just have fun, but you gotta make a living, and if you are not closing deals, then you aren't learning and you aren't earning... so something has to change!
Thank you for the detailed response, very much appreciated. I think you're right about it being a game played in the 1990s and it being different now.
So you believe its best to try and join a reputable team at CBRE or JLL and if I can't land one there I should join Marcus & Millichap to maximize income in a short time period?
My end goal in life by the time im in my 50s is to become an Owner of assets either by joining a small ownership team and grow from there or partner with a few guys and build a new ownership firm.
Thank you once again,
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