Commercial Brokerage and Leasing
Commercial real estate brokers are the professionals that help lease newly developed and existing real estate to new tenants. Usually brokers work on either the tenant representation side which means they help clients identify and lease space or they work on the seller representation side meaning they try and find new tenants to go into specific properties.
Commercial brokers may have a specific type of real estate that they focus their efforts on. They may only work on retail opportunities or focus on finding companies in need of new office space or industrial facilities. In order to do this, brokers obtain listings which are agreements between owners to place properties for lease with the individual or firm or it could be an agreement to be the representative seeking their new space.
When listing a property or seeking a new property, brokers compare the listed property with comparable properties that recently signed leases, in order to determine a competitive market price for the property. In order to be successful, commercial brokers tend to focus on very specific geographic areas. To be successful they need to have a strong knowledge of their local markets. Without the knowledge of what spaces are currently vacant or what new space is being developed, they broker cannot properly represent their clients.
If a broker is working on tenant representation then they need to create relationships with developers and property managers in order to find their clients the best space for the least amount. A broker may also represent a developer or property management company who needs to tenants fill their vacant space. In this case the broker must network and facilitate relationships with retailers and companies that may be in the market for new or upgraded office or industrial space.
It is important for brokers to have an entrepreneurial and sales mentality. They need to constantly be making contacts and seeking new opportunities because most brokers work on a commission basis. The more space they can help lease the more financial gain for the individual.
Jobs are available in brokerage in two capacities. There are national and international brokerage firms such as CB Richard Ellis, Jones Lang LaSalle, or Trammell Crow that have multiple offices with each focusing on their specific city and submarkets.
The first year or two could be difficult financially as a broker because the individual needs time to build up their contact and client base before being able to make a great number of deals come to fruition. These large companies will likely offer a base salary that will be minimal because of the expectation that the broker will make substantially more off their commissions.
The other way to work in brokerage is to do so independently. This is probably recommended more for experienced professionals who have a strong client base and know the market and real estate community well where they do not need the support of a large company.
There is no easy way to get right into brokerage though. To get into brokerage having a more marketing and sales mentality is important. It is also helpful to have some finance experience in order to analyze the transactions they are trying to undertake. Big companies like the ones mentioned above would probably hire for transaction analysts or marketing research positions as a way to train future brokers.
This way new employees have an opportunity to learn about their specific real estate market and learn all the elements it takes to put together a successful transaction. Majoring in marketing would be important for these types of positions because it will allow students to understand sales tactics and the marketing research necessary to have a lucrative career. Some companies may hire brokers directly from MBA programs as well.
In addition to the college education, some states also require some undergraduate work as a part of obtaining a broker’s license. Some states require brokers to take licensing classes and pass examinations in order to be considered licensed. In addition to the initial course and exams, brokers have to maintain their license by attending continuing education courses that keep them up to date on current trends and issues in the industry.