Let's Talk About Broker Compensation

How much do brokers actually pull in?

I'm talking about your net of everything. So you pull in your commission and have a split with the company (anything from HFF/ CBRE to smaller boutique shops). Larger deals typically have multiple hands in the bucket (at least from what I've read- correct me if I'm wrong). So you split with your partner(s). Typically brokers have to source their own business- so after expenses of doing that (maybe it's client dinners, maybe software, etc.)

I am just curious. Comp has been talked about on other threads and I know it can go wildly all over the place. Some lazy broker in the middle of nowhere can make 0, Darcy can make it rain. I'm just curious.

This question applies to both Investment Sales, Leasing, and Debt/ Capital Markets/ Structured Finance.

** Also, where do you see the future of broker compensation? Is the space getting more or less crowded?

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Comments (13)

Most Helpful
Mar 9, 2019

You more or less answered your own question - it's all over the map. Some people make $0 while others make multiple 7 figures. It's also highly dependant on market - a NYC tenant rep can do a 10,000 square foot deal at $65 per foot over and make a lot more than the Charlotte tenant rep doing a 10,000 square foot deal at $28.50 per foot. It really is a hard question to answer because it's all over the map. What I can say is it looks like most brokers make a lot of money because it's self selecting in a sense. If you are not a good sales person you just won't last making $0 so people wash out. The sales people who have remained, remained because they do / did well.

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Mar 9, 2019

Great points.

I should articulate my question better: Off of a $50,000,000 sale/ loan, how much should a broker expect to net? I understand the numbers for a sale and loan will be very different. And a loan can vary widely, so just assuming a senior note.

Mar 11, 2019

In my experience the fee for a sale is typically ~50-100 bps split 50/50 with the firm and then anywhere from like 5-50% of the net is distributed to other brokers/support staff who helped out (and then taxes take a big chunk of the remainder).

Mar 11, 2019

I'm at my second major brokerage and knowing nothing about the deal besides its size, I would say probably 90-100 bps for a sale and 55-60 bps for the financing. So for example, if you work in IS, you're looking at a bit under $500k in fees and then half to the house. Brokers would take home roughly $250K on that, but if its a team (which it almost always is for that deal size), that is split up between the group (assume the top broker gets half of that?)

I personally think it is a much better time to be a debt broker in terms of comp.

  • No "retrades". Yes a lender can back out at the last minute, but assuming it is a good deal/numerous bids were made, a lot of the time it's just next man up.
  • Tons and tons of liquidity in the debt markets.
  • The best debt brokers know how to raise equity for the sponsor and generally have a great understanding of the capital stack as a whole.
  • A lot of deals are quite easy, truthfully, and thus the broker and his team can juggle a bunch at once. There is significantly less work for a $50 million refi of a stabilized asset than for a $50 million construction loan.

Just my $.02 but would love for others to chime in on whether they think its more lucrative (speaking very generally) to do debt/equity vs IS.

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Mar 11, 2019

yeah, all over the map with a lot of survivorship is basically the whole thread.

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Mar 11, 2019

What would someone like Darcy come out of the Stuyvesant deal with for example?

Mar 9, 2019

I read that she got 90-100bps on it gross. No clue how to calculate the net though. Above responses provide some clarity though, although I'd imagine Darcy's splits are far from the usual.

Mar 11, 2019

Per this article, https://therealdeal.com/issues_articles/large-deal..., the brokerage commission was .09%. It came out to $5MM. I think worst kept secret is that everybody discounts commissions, but would never advertise that they discount because then everybody would start asking for reduced commissions and it would be a race to the bottom.

Mar 12, 2019

Yeah well that makes sense, right? Brokers aren't taking any risk, and from a pure effort standpoint, it's hard to make the case that there is 20x more effort going into selling a $2b asset than a $100mm asset. Making that five million is a lot of money, regardless of project; the idea that broker pay should be tightly scaled to sales price is laughable to me. On smaller deals, it should be a higher percentage to properly compensate a brokerage team for their work, and that should scale down (on a percentage basis) as the dollar amounts rise. That seems to be the industry standard, as well.

Mar 14, 2019

I know a few. Anywhere from 0 ro millions a year. In residential starting off is hard but once you are rolling opportunities often present themselves in the form of referrals.

Mar 15, 2019

Aside from the top 3-5 people in a given market/specialty, most brokers rarely exceed a net income average of 350k a year (pre tax). I would say most good brokers fall into the 100k-200k a year range. Sure, some brokers may be hot for a couple of years, but the good years must carry you through the bad years. A lot of "top" brokers live in fairly modest homes. Every year begins at zero.

You can count on one hand the brokers who fly private. For most, it's a decent way to make low six figures but not much more than that.

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