A commercial real estate agent’s job is much different from that of a residential real estate agent. Generally, selling or leasing commercial property takes a significantly longer time, and commercial real estate agents must provide substantial analytical data and financial information. Agents can work on their own, for a real estate services firm or for a commercial broker. Most commercial real estate agents are paid on a commission basis.
- Commercial real estate sales can be a lucrative career choice given the relatively higher commissions earned on larger properties.
- At the same time, commercial practice is considered a more difficult terrain than selling residential real estate.
- Commercial agents must be licensed and be able to have a high degree of resilience and practical knowledge of the sector - along with good interpersonal skills.
Qualifications and Requirements
The Bureau of Labor Statistics (BLS) lists a high school diploma or equivalent as a basic requirement for commercial real estate agents, but most are college graduates, since most firms and other commercial property services require a degree.
Community and four-year colleges offer real estate degree programs, with the lease or sale of commercial property being a focus or specialty. If not a specialized degree, an educational background in real estate-related matters is almost essential. Courses that benefit potential agents the most include finance, statistics, economics and business administration. In many cases, brokerage firms will offer educational courses, mentorship and on-the-job training. The National Association of Realtors also provides a list of beneficial courses specific to commercial real estate sales.
Real estate agents and brokers must be licensed everywhere in the U.S. They typically acquire this license after passing state-administered real estate exams. Some states require only a basic real estate license, while others require a specific commercial real estate license. Prospective commercial real estate agents can obtain state-specific requirements by contacting the state's real estate commission or department of real estate.
The commercial real estate agent career is not for everyone, as it requires a very specific combination of skills. Education and the ability to work quickly with numbers and analyze data are essential. Agent positions are best suited to multitaskers who enjoy working in a fast-paced environment with a variety of people. Interpersonal skills, dedication to customer satisfaction and persuasiveness are all important.
Primary Duties and Responsibilities
Although commercial and residential real estate agents share some duties, the differences are substantial, and the commercial practice is typically more demanding. Finding a suitable home and making clients fall in love with that home is generally the hardest part of residential real estate sales, while commercial real estate sales involve more parties and demand far more information.
A commercial real estate agent must provide a commercial buyer with market demographic studies, environmental research and significantly more financial analysis. Additionally, commercial clients are concerned with area, local statistics and data involving the property's location, as well as the demographics of nearby businesses and the area's population. Most of an agent's clients are businesses that depend on placing their firms where the immediate and nearby population suits the goods they sell or the services they provide.
A daily to-do list for a typical commercial real estate agent involves cold calls to business owners and managers, both to locate new potential sales and to glean statistical information. Agents also research and analyze typical lease payments for other commercial properties and office complexes in the area.
Additionally, commercial real estate agents must employ statistical analysis techniques, including break-even analysis, to help clients determine a basic margin of safety. Other common responsibilities include researching and discussing property maintenance costs and possible renovations, networking with local businesses, negotiating between buyers and sellers, overseeing property inspections, arranging for financing and facilitating final transactions.
The BLS reports an average yearly income just over $44,000 for all real estate agents and $56,790 for higher-trained real estate brokers, but its statistics are generally skewed toward residential real estate sales. Most sources indicate that commercial real estate agents earn somewhere around $85,000 annually. Keep in mind that these figures vary, as most real estate agents' incomes are based on commissions and the geographic area where their properties are sold.
Higher-priced sales and repeat business, along with a credible reputation, typically bring commercial real estate agents larger commissions and higher yearly incomes. In general, income variability can be organized into four regions in the United States: Northeast, West, South and Midwest. As of 2015, the average yearly income for the Northeast region falls between $80,000 and $100,000. The lowest income in this range is typically brought in by agents in Pennsylvania, while the highest is found in New York.
For the Western region, commercial real estate agents in California saw an average yearly income just under $100,000, while agents in Hawaii saw approximately $65,000. Southern commercial real estate agents brought in a $75,000 yearly average income in Louisiana, while their peers in Mississippi enjoyed about $105,000. Agents in the Midwest brought in between $70,000 and $95,000 for the year, with the lowest incomes in South Dakota and the largest incomes in Illinois.
The BLS indicates that real estate agent jobs will continue to grow 6% from 2016 to 2026, about as fast as the average for all occupations. The profession's outlook is largely dictated by the economy. Company expansion will likely increase as the economy continues to strengthen, so more positions will be available to prospective commercial real estate agents.