Starting a career in commercial real estate

Why do you want to be in commercial real estate? Thats the frst

question I ask folks who call asking adice! Why do I ask this? "ecause
the adice I gie them is directly related to their answer to my why
question!
#ere are some of common answers I receie$
I want to make lots of money
%y family has dabbled in it
I hae some family money or land which Id like to deelo&
I know so ' so who is in the business
I heard about it in school and wanted to know more
I used to own a business and leased from a commercial broker
I was in banking(lending(architecture) etc!
So you see) the motiations are quite di*erent and in some of these
cases) the &erson seeking information already has a leg u& on the
&erson o* the street but doesnt know what to do with it +or een that
they hae it,-! This is when they turn to me for adice!
.o you make more money on commercial real estate? /ets try some
math$
0esidential e1am&le$
2gent sells 3456)777 home! 2gent co8brokes! 2gents frms gets 9:!
2gent gets ;6: of his(her frms share! 2gents commission < 369;4!67!
=ommercial >1am&le$
2gent leases 5677 S?) 9 year lease) 3@4(sf! =o8brokes) agents frm gets
9:! 2gent gets ;6:! 2gents commission < 364;6!77
Ah ho, What about selling a 367)777)777 mall? Well) likely) you wont
be doing many +if any- of those right away! Sure) you can make a &ile of
dough on big deals) but they take much longer B one of mine took three
years +and it was no where near 367%,-! I had a bunch of marketing and
&romotion bucks in it and had it cratered +which it threatened to do
seeral times- I would hae been out that money!
%ost residential deals +een the big ones- usually close within @ B 4
months of contract! Cot so on commercial deals! >en the 5677 S?
lease e1am&le aboe could hae taken ; months or more to get done
and &aid!
Since I am one of the few commercial real estate instructors +outside the
higher leel designation &rograms like ==I%) SIA0) =D%) etc-) I receie
numerous calls from &ast attendees of my classes! There is ery little
information about commercial real estate training) unlike the wealth of
information about residential real estate! While there are many
di*erent aenues one can take in residential real estate) there are een
more +and they are more distinct) I think- in non8residential real estate!
/ets take a look at the maEor categories of non8residential real estate$
AFce
0etail
Industrial
Institutional
Inestment
0esort(0ecreational
Is there oerla&? Ges! 2re there sub8s&ecialties within these
categories? Ges! ?or e1am&le) in larger markets) a broker or deelo&er
may s&ecialiHe in only high rise oFce in a certain &art of town! In small
markets) to surie) most brokers do a little of eerything) een
residential) as the market does not hae the de&th to allow
s&ecialiHation unless they do most of their deals out of their area or
handle a ery large area!
So why do the resources seem so limited? I would say that there 20>
ast resources) but they are industry s&ecifc) not marketed nor directed
toward the general &ublic or een the commercial real estate generalist!
#oweer) one must be aware of the numerous &rofessional organiHations
in commercial real estate to know where to look! 2lso) many of the
&ublications are somewhat technical) flled with industry Eargon) again)
meant for those in the business! Some information may be restricted to
its members!
.ont worry) later on in this article) I will list many of the organiHations
so that you may look them u&) &eruse their o*erings and make your
selections based u&on your needs and direction! I say u& front that I do
not know of any Sell a %ulti%illion Sho&&ing =enter in ;7 .ays ty&e of
book you would think youd fnd at a "arnes ' Coble bookstore! The
&ublications which hae what most folks are seeking will be aailable
through industry related organiHations! Its the nature of the business) I
think!
AI) getting startedJ!! /ets say that you are either a successful
residential real estate agent or a business &erson looking to change
careers! Gou are not sure which area of commercial real estate youd do
best! Gou hae business e1&erience and you know &eo&le! +Well call
these folks your s&here of inKuence!- What should you do? #ere is
the adice I gie eeryone$
/ist eeryone you know in commercial real estate
=all all of your relaties and closest friends and list eeryone they
know in commercial real estate
Start calling
What you are going to do is what is known as an informational
interiew! Gou are CAT seeking a &osition) because you dont know
what you want yet or where you may ft in! %ost of us are somewhat
clueless at this stage and to ask for a &osition when we are clueless is a
mistake and can &erha&s make us look ery stu&id! Cot the way to
begin a new career which de&ends u&on re&utation and business say!
#ere are the ste&s$
=all frst those from your list you feel will gie you some time! 2sk for
a @68minute slot! >1&lain that you are gathering information only) not
seeking a &osition at this time!
.uring the interiew) ask the real estate &rofessional how he(she got
started and what adice would they gie a newcomer! 2sk for a brief
oeriew of their business and their industry! "efore you leae) ask
for 4 B 9 names of others you should talk to! 2sk if you can say that
this &erson referred you! +This can really o&en doors for you!- Thank
the &rofessional for his(her time! Send thank you follow u& note a
few days later! +Cot an email) &lease!-
=ontinue to call those on your list for informational interiews! 2t
some &oint you will begin to eliminate areas of commercial real estate
and start honing in on those areas we are becoming interested in!
When you think you hae narrowed it down) go to the industry
s&ecifc web sites +shown later in this article- and do some research!
What should you seek? Well) get to know the Eargon) ty&es of
&roEects and key &layers! Gou can do this by reading their
&ublications! +Ah) yes) do ask your hel&ful contacts if you can hae or
borrow some industry &ublications B usually found in the rece&tion
area or their library!- Lisit com&any websites to learn more!
/ook at &roEects done by local com&anies or being brokered by the
com&anies you are interested in! =reate some questions about these
&roEects!
2ttend as many commercial real estate classes as you can! Cot only
will you learn stu*M you will &robably make your ">ST contacts there!
Net an idea of com&ensation structure! Some are commission only)
some may be draw against commission) some may be salaryJ!!
.ecide what you can lie with and what you cant! Onless you hae
something really swell of bring to the table +i!e! you are the Wal8%art
heir- you will not be in much &osition to negotiate! ?eel free to try)
theres usually a little wiggle room) but if others are seeking the
same o&&ortunities as you) J!
Gou are now ready for serious interiewing! Carrow your fnal choices
down to no more than 6! Onless you are in a ery large market)
commercial com&anies will know e1actly who is in the market and whom
they hae talked to! Pust like commercial &ro&erties) we dont like to
hae them sho&&ed) hence) you need to narrow your list down!
2t this &oint I am usually asked) Should I go with a deelo&er or a
general broker? I answer) It de&ends! Will you hae some &roduct to
market? Co? Then I think you should start with someone who does!
Starting with a deelo&er allows a new broker to learn the &roduct and
market with the safety net of haing ca&tie &roduct! >entually) the
brokerage community will know you and you them) through your
marketing of your deelo&ers real estate! Gou can decide once you
hae some e1&erience behind you what you should do ne1t! "ut this
article isnt about your life in commercial real estate) its about getting
started) so back to getting our toes wetJ!
=all back your contact &erson for another meeting! >1&lain that you
hae talked to many &rofessionals) hae narrowed it down to QGR
feld +retail) oFce) etc-) youe isited some of their deals(listings and
hae some s&ecifc questions!
When you meet) ask your questions) share what you hae learned +we
are a gossi&8y bunch so any a&&ro&riate tidbit you can share without
sounding gossi&8y will earn you some attention- and ask what
o&&ortunities his(her com&any has!
Iee& in mind that most commercial frms dont hae o&enings but
create slots de&ending u&on need or o&&ortunity!
>1&lain what you can bring to the table! 0emember that the com&any
is interested only in WII?% +whats in it for me?-! .ont rattle on
about your wants) needs and desires unless s&ecifcally asked) then
be brief! Who cares?
If you hae an in OS> IT, If your dad and the com&any head are
golf buddies and you hae decided that you can do well there) go for
it, %ost o&&ortunities are created!
AI) you got a &osition! #ow to establish yourself!
2ttend eery commercial real estate eent! +Goure &robably not
doing deals yet anyway) so its something to do!-
A*er to hel& an e1&erienced broker in your oFce for either 37 or a
ery small cut! A*er to do his(her scut work! +0unner) &ut u& signs)
measure s&ace) hand out Kyers) etc!-
Send out announcements!
0ide around and iew commercial &ro&erty! %ark a ma& with areas!
Take &hotos! /ist occu&ants and owners!
#ae your "roker in =harge create a training &rogram for you! +good
luck,-
#ae lunch) etc with other brokers and learn about their &roduct!
#ae 4 B 9 brokers who will mentor you B you can call with questions
and ask adice!
=reate a resource list B lenders) a&&raisers) builders) architects)
engineers! >tc who you can bring in on a deal to hel& you close! Talk
with them often and understand their businesses!
2ttend eery commercial real estate class you can! 2lso attend those
which relate to your business!
Start working on a designation!
Net inoled in ciic) charitable and goernment a*airs! Net on a city
or county commission) Eoin 0otary) get actie in a &olitical com&aign)
etc! The key here is ma1imiHe e1&osure! .ont s&end too much
energy where other) more established real estate &rofessionals are
actie +unless you want to ally yourself with one of them-! Gou want
to be the commercial real estate &erson in your organiHation! Net
into a /eadershi& &rogram!
Poin one or two commercial real estate organiHations and get actie
early! Its easy because these organiHations are always looking for
workers!
2nd W#2T>L>0 you do) if you fnd yourself in oer your head on a
deal with a client or customer) dont try to wing it, Net hel&! Noofng
u& a deal can terminate your career quickly) or at the ery least) label
you a rube +which can hae the same e*ect) but it takes longer and is
more &ainful-! >eryone will know! Were a small grou& B it doesnt
take long! Someone +ho&efully your su&erising broker- WI// hel&
you when you ask for hel&! Well cut ya for the listing) but once you
hae it and you need hel&) we will be there for you! +Af course) we
will take the credit for saing the deal) but thats much better than
tanking along with your client who will sue your butt o*!-
This list could go on and on) but the ti&s for being successful are &retty
much the same in any business) so buy some book on networking or
&rofessional deelo&ment and follow ti&s!
Iee& in mind the most commercial &ractitioners are a di*erent breed
from the residential agent! %ost commercial frms are small) most o*er
little or no training and commercial agents are ty&ically hesitant to
share any information B you hae to ask and then you still may not get
what you need! We usually work alone) not in teams or grou&s)
Eealously guard our &otential client list and dont always use %/S! In
some areas it is like a secret society) you need to know the &assword
and secret handshake to get in! 2nd once in we still dont freely share
information! %ost of us dont &artici&ate in regular meetings or
commercial real estate grou& actiities) we dont show &ro&erty at
night or on the weekends and we dont hae our &hoto on our business
cards! Cow the e1ce&tion to all of this is the &ractitioner whose market
is smaller and does both residential and commercial! The &ure
commercial agent tends to more closely align with inestment bankers!
Some 0esources$
Some organiHations o*er adanced education and designations! The
designations are shown after the organiHations name in + -!
==I% Institute +==I%- www!ccim!com
=ounselors of 0eal >state +=0>S- www!cre!org
Institute of 0eal >state %anagement +=D%S- www!irem!org
0ealtorsS /and Institute +2/=- www!rliland!com
Society of Industrial ' AFce 0ealtorsS +SIA0- www!sior!com
Cational 2ssociation of 0ealtorsS www!realtor!org
0ealtorsS =ommercial 2lliance
www!0>2/TA0!org(rca
International =ouncil of Sho&&ing =enters +many- www!icsc!org
"uilding Awners and %anagers 2ssociation +0D2-
www!"A%2!org
Orban /and Institute www!uli!org
=ommercial 0eal >state Women www!nncrew!org
There are many other commercial related organiHations and grou&s
and they are also s&ecialiHed and ty&ically for the adanced or cor&orate
commercial real estate e1ecutie! Seeral of the aboe organiHations
are also com&rised of e1&erienced &ractitioners) but most o*er
educational &rograms aailable to all) and are therefore) a good
resource for a new agent!
What can one e1&ect as far as com&ensation) hours) etc!) in this e1citing
business? Well) it de&ends! If the market is strong and(or the agent
well connected with &roduct or buyers) the sky is the limit! "ecause of
the nature of commercial real estate it is hard to accurately cite
aerage com&ensation of a broker! Onless a new broker comes in with
&roduct or buyers or is &laced at an actie &roEect) it may be months
before a deal is done and then another few months before it is closed
and the agent is &aid! In some areas) the &ractice is to &ay &art of the
commission when a lease is signed and the balance when the tenant
takes occu&ancy! In other areas) it may be all &aid when the tenant
takes occu&ancy! With a sale) commission is ty&ically &aid when the
deal closes!
There are many brokers I know who make in the 3;7)777 8 3T7)777
range! I also know some +fewer- who make 3467)777 U! Ironically) I
know some that hae made 3467)777U one year and 356)777 the ne1t!
It can be a cruel business! It takes time to build a good re&utation and
only minutes to ruin it! It also takes time to deelo& the say to be
trusted with the bigger deals! Training +outside the national designation
&rograms- is hard to fnd!
Why would anyone want to subEect themseles to this? 2h) a
commercial &ractitioner becomes &art of the community) knows whats
what and whos on frst! =ommercial real estate inoles so many other
industries B banking) inestment) construction) architecture)
engineering) etc) that the actie commercial broker quickly becomes a
known fgure in the area and may hae an inKuence on the growth and
deelo&ment of the community! ?or those in deelo&ment) driing by a
building he(she created adds a certain continuity and &ermanence to life
in our rather disEointed and dis&osable society!
=indy =handler) ==I%) =0>
The =handler Nrou&
4779 =hair) 0ealtorsS =ommercial 2lliance of the C= 2ssociation of
0ealtorsS