When choosing a commercial real estate brokerage to “hang your license with” (as we say in the biz), you need to consider a number of important factors.
Whether you’re a newly licensed commercial REALTOR® and you’re considering your first commercial real estate agency to join, or you’re a seasoned commercial associate broker with many years of experience and transactions under your belt, here are 8 important things all commercial agents should consider when looking into a potential commercial real estate brokerage to work for:
1. Number of agents working at the commercial real estate brokerage
If you work in commercial real estate sales, you have a smorgasbord of choices for commercial brokers to join.
There are larger national brand companies like Cushman & Wakefield, CBRE, Marcus & Millichap, SVN, JLL, Colliers International, Newmark Grubb Knight Frank, NAI Global, and a bunch of other big players in the commercial real estate industry. Think larger, multi-million dollar transactions that might span multiple states and take years to complete.
Joining one of these offices may put you into a large office with dozens of other commercial agents.
On the flipside, you may also choose to work at a smaller, regional commercial real estate brokerage (like Pyramid Brokerage Company in Upstate New York) that focuses on doing business just in specific locations, like a few counties, or in a specific niche, such as commercial retail or industrial properties. These smaller firms typically have a smaller number of agents on their rosters.
2. The office facilities and location
While most of your time will probably be spent out of the office doing commercial property showings, driving neighborhoods to learn the streets and what’s popping up/leaving town, and knocking on doors to drum up new business, you still want a home office that you can take pride in calling home.
Think about times when you’ll bring clients into the office for meetings and to sign paperwork. Would you be embarrassed or proud to bring them to your commercial real estate office?
Also, think about commute time from home to the office. Do you have to drive an hour to get to the commercial office, or is it just a few streets over?
While this most likely is not as big of a factor since you’ll usually be on the road getting paperwork signed or going to meetings and showings, you still need to go to your office at least a few times a week if not everyday before hitting the streets again.
In addition to aesthetics and location, you also want to see what your potential new commercial real estate office has for essential equipment like copiers, computers, printers, fax machines, kitchen, coffeemaker, and other must-haves like parking and proximity to restaurants, coffeeshops, and other types of establishments.
Again, these are mostly personal preference, but it’s worth it to tour your potential new commercial real estate office (and the neighborhood) and see what the company offers their agents to help them grow their commercial real estate sales businesses.
3. Types of training programs offered
If you’re new to commercial real estate sales, you definitely want to join a commercial firm that offers training for new agents. You’ll need to invest your time, energy, and even money into getting the proper knowledge on how to handle commercial real estate deals from start to finish.
Most if not all commercial firms offer training to new agents, however some do it better than others.
During your interview with the managing broker, you’ll want to ask about the kind of training for new commercial real estate agents that is offered and when these take place, such as weekly or only once a year.
There’s a lot to learn, and depending on your business experience, you may need to spend significant periods of time honing your sales techniques and closing skills.
You may also need to brush up on things like writing up listing agreements or drafting Letters of Intent for commercial leases.
And how would you even know how to properly price a commercial property if you’ve never done it before?
That’s where commercial real estate training comes into play, and if your prospective commercial real estate brokerage offers it to new and veteran agents, then you’ll want to take this into consideration.
4. Company management
You’ll likely meet with your potential commercial real estate firm’s managers, who provide leadership and guidance for the other agents to follow.
You’ll want to know their experience and background, and whether or not they are also selling properties.
If they are still selling commercial real estate properties, then they might not have as much time to help you compared to a manager who is full-time behind a desk and there for you as a resource.
5. Marketing and admin support
Most commercial offices have at least one admin person to answer the phones and greet visitors at the reception desk.
Sometimes this person might also do other support tasks like enter your listings into the commercial MLS, transaction paperwork, and creating marketing brochures for new property listings for sale or lease.
Ask about the support staff and how the office is managed. A well-run support team can free you up of many hours of tedious paperwork and mundane tasks so you can do what you do best: helping more people become aware of potential commercial real estate opportunities for growth and expansion.
6. Commission splits
If you are new to the world of commercial real estate sales, then here’s how commissions (i.e. how you get paid) works.
When a commercial real estate deal closes, you are entitled to collect an agreed-upon percentage of the final sale price (or aggregate rent if it’s a lease) for your efforts in helping ensure a fair transaction for all parties involved, whether you’re representing the seller or the buyer (or tenant).
However, you do not get to keep all this commission. It gets split up in several ways, which you’ll want to inquire about when researching different commercial realty firms to join.
Find out how much is split with the commercial real estate brokerage, and how much is then given to the agent.
How all these split percentages work out is typically up to the commercial broker you work for as an agent, so it makes sense to ask about these numbers when you’re speaking with the managing broker of the firm in your information gathering interview.
But typically in commercial real estate agencies, as much as half (or more) of your commission goes to the commercial real estate brokerage to keep the lights on, admins paid, the printer filled with toner, and the coffee machine running.
7. Office culture
Each commercial real estate brokerage office has its own culture, and it’s worth it to put some focus into evaluating the culture of the office you’re thinking of joining. See for yourself which aligns best with how you see yourself running your commercial real estate sales business.
If you like a high energy environment with a lot of collaboration and teamwork, then you’ll want to join a commercial real estate agency that has that type of culture. This might be an office with a mix of both new and seasoned agents.
However, you may prefer a quieter, more subdued type of environment.
That’s why it’s a good idea to check out at least 3-4 commercial real estate brokerages and see for yourself what it might be like working there.
You might also want to contact a commercial agent or two at the firm and ask them what it’s like to work there and what the culture is like.
Some commercial real estate firms specialize in just one or a few areas of commercial real estate, such as retail, multifamily apartments, or industrial properties.
Others can do deals of all types, including residential real estate.
If you are just starting out in commercial real estate, and do not know what you want to specialize in, or if you consider yourself a generalist and you can sell a bit of everything, then you’ll want to find out about what specific areas of focus your potential new commercial real estate employer might be in.
Some commercial real estate companies also have property management divisions, which is another area that commercial real estate agents can look into for additional income streams.
When choosing a commercial broker to work for, it’s worth it to take your time and do your homework, especially if you are new to the commercial real estate business.
If your values and vision are aligned with those of the company, then things will run much smoother and your commercial real estate sales business will grow much quicker as you help generate more jobs and introduce more opportunities to more communities ready for expansion and growth into a brighter future.
And that’s what you really want…isn’t it?
Then take the time to research, ask questions, and trust your gut instincts when it comes to choosing which commercial broker you’ll hang your license with.
James K. Kim
James K. Kim (Jim) is a commercial real estate advisor with Pyramid Brokerage Company of Albany, Inc. in the Capital Region of New York, specializing in helping business owners expand into new locations or sell/lease a commercial retail, office, industrial, or investment property.