About me:
Multifamily Investment Sales Broker at Top 4 (CBRE, JLL, NGFK, Colliers) shop with a Nationally ranked team. We transact over $1B annually.
Experience:
Been in the business for 5+ years and previously worked in sell-side Equity Research.
Commercial Real Estate is a phenomenal industry and there many avenues within the space and I love what I do. I left Equity Research because I felt the opportunity cost for a MBA or CFA was too great at the time and have always been entrepreneurially minded - wanting to be my own boss.
The most conventional way to get into brokerage (big shop) is through its research platform (typical comp: $40-$50k). You will learn the various sectors, learn the market, and show off your talents to the office. Each sector (Multifamily, Office, Retail, Industrial, Hospitality, etc) behaves different and also attracts different personality types, in addition there are numerous arms within each sector that you can work on. In bigger markets, Brokers become extreme specialists whereas smaller markets you need to be a generalist due to lack of deal flow. I see typical research analysts lasting 12months before moving towards a more permanent role but if you are talented, you could get picked off in 6months.
Larger teams have limited openings, so it is common for someone to wait for an ideal match or end up at a team from a competitors shop. When joining a team, you will still be conducting a lot of market research with little client interaction. Client interaction comes down the road and eventually you will be able to make your own clients. Comp ranges greatly with what you bring to the table and deals you source. I work off straight commission, however most analysts that are in transition are on salary and could be moved towards a draw before leaping into commission only. Our team employs 6 staff and their comp ranges from 60k to 150k with 70-80k being the average.
Brokerage is certainly a grind and not for the faint of heart. The barriers to entry is relatively low, however the learning curve is steep and not many people make it far enough to live comfortably. Sales is a big part of positioning yourself ahead of your competition and everyone cuts their teeth cold calling :)
With that.. go ahead and ask questions
Doing deals yourself on the side?
If you are referring to rolling fees into deals under an LP syndication, then yes, depending on sponsor, structure and size. It also needs to be with a fairly nimble GP.
How difficult is it to break into research positions at the bigger companies at approx. 50k salary?
Would you say there is a difference between those that sell at say M&M vs. CBRE? I know from the get go M&M is like the boiler room and other firms try and educate their future brokers from the ground up and was curious if that reflects on the future broker.
I’m also curious if certain sides of the brokerage business seem more on the principle of selling and others on potentially consulting? Just for example, I’d be curious if being a debt broker would be more of a consultancy job than say a multifamily broker.
Also, any advice on breaking in? All I hear is the business is not for the faint of heart and not just anybody can make the money that most intend to. What differentiates those that make it and those that get out because they can’t take the heat?
Thanks for doing this btw. Always enjoy picking people’s brain in different specialities.
Generally, it is not difficult and pretty easy to land a research role, especially in larger markets. Right now, you are seeing hiring freezes across the board and cut backs due to loss of revenue.
M&M is much smaller than CBRE, so you will not be exposed to as much (sector/product wise). Culture will also be a bit different, if that matters. M&M has a good training platform [for brokers] and I hate to stereotype, but M&M is known to have an aggressive style.
A mortgage broker type role will still have a lot of sales involved, especially if you want to be a producer. Not many shops have advisory arms and would not recommend going this route if you aren’t already established within a market.
Most don’t stick it out long enough or get enough traction early on to keep them in it. It’s not for everyone and it isn’t easy. No secret ingredient but hard work, likable personality and level head goes a long ways..
it’s very easy if you come from a decent school, with decent internships + background.
As a recent undergrad who should I be targeting my networking towards to either gain a research or broker position? Also, this may sounds like a dumb question, but what titles do brokers have, I’m having a hard time finding the right people on LinkedIn?
thanks!
Target VPs and directors in your networking. That said, Brokerage shops hand out VP and director titles like candy. If you've closed a few deals you're probably a VP. I've seen directors at JLL who are like 4 years out of UG. CBRE is comical with all their titles... VP, First VP, Senior VP, Executive VP. Typically if you see "executive" in front of the VP or director title they are the top dog in their group. They're also less likely to return your email.
Most CRE titles are honorary and do not carry the same weight seen within most corporate organizations. Each shop often uses their own designations, but generally it goes Associate -> VP -> Managing Director or Chairman with minor steps between. Berkadia uses Director as their Associate designation, so it’s not always apples-to-apples.
Best place to start for openings would be with the Office Manager, they have to keep tabs on each team for quarterly/annual reporting. You can also email the Research Manager within the office, however that would solely be for feedback and they have no pull on hirings. Best advice when trying to find an opening is be persistent but not annoying or desperate. I’d recommend email or call 1x/week (not both) until you hear back, but no more than that.
Also, emailing brokers would largely be a waste of time. I get hundreds of emails a day and if you aren’t a seller or buyer, I probably wouldn’t give you any time.
Thanks for doing this AMA.
Forgive my lack of couth, but are you guys looking for an analyst?
We always keep an open door on potential candidates, but to be candid we lost over a quarter worth of production from COVID and are likely on a freeze until revenues increases back up.
What has your comp progression been? how much should a decent broker be making by year 5?
Best way to indirectly answer this, average broker in our shop does $350k of GCI (gross commission income) and the House usually takes 50% off the top. Plus all brokers are 1099’s, so take some off for that also.
You do see guys step down to boutique shops around the 5yr mark, where House splits are 65%-70% to maximize what goes in their pocket.
I work in MF development and in my market (Southeast US), if you want to sell your MF property you use HFF for the shiny new developments or Newmark for newer stuff, value adds, but also 20-yr old gardens. Maybe CBRE if you got the land from them. Colliers sells B Office here... How much value do buyer's place on the "rank" or "prestige" of the broker?
I'm assuming buyers don't care but I can't understand why smaller brokers don't undercut on commissions or are the big brokers already low and making it up with scale?
There are great teams are each of the major shops and no firm dominates every market. Our market has 7 institutional teams (us included) from almost every big house. The JLL/HFF merger has proven to be somewhat dysfunctional and a lot of great brokers have left there over the last 12months, plus teams can get paid significant incentives when moving to another shop - which is why it happens a lot. Sellers care more about the brokerage firm than buyers, especially in the institutional realm.
Commissions are fairly standardized and competitive in Multifamily, some sectors with less competition like Hospitality, Mobile Homes and Land have fatter commissions from less competition driving it down. Commissions can also vary slightly by market. We never want to lose a deal over commission and will almost always match, however if a seller is nickel-and-diming to the point it is excessive, we usually pass on the business.
Thank you for your answer. To your point, the HFF team bailed here to start a development shop and left JLL with no IS leaders. On the plus side, a young analyst who I respected was bumped up to director of office IS (Chaos is a ladder.)
HFF was known for wining and dining clients here, makes since developers would love this and buyers just want a deal. If you were a developer selling your new lease-up, how would you evaluate/select an IS broker?
In my market (Southeast) it went far beyond dysfunctional to "complete shit show." The JLL team, which was arguably the top or at least one of the top MF sales teams in the market, all bailed at once.
HFF sold to JLL like...early 2019.
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As someone looking to make investments in multifamily (likely smaller), but without any connections in the industry, any advice on how I can go about sourcing good deals in my local area?
Good deals are always hard to find and every broker has a "go to" list. On small deals, my recommendation is get access to the MLS and keep an eye out for deals with a certain criteria that are often listed by residential agents. I've seen a number of properties get listed based off Zillow's Zestimate vs. Cap Rate, etc - usually they are picked off within hours.
In many states, 4-units and below are technically considered residential where financing is more aggressive
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