Are you considering a potential career as a commercial real estate agent? You’ve come to the right place to learn all you need to know before you embark on your journey! Here we will walk you through the responsibilities, pre-requisites and helpful skills necessary to find success in the commercial real estate industry.
Commercial real estate agents play an important role in the world of commercial properties, which can include office buildings, retail spaces, industrial complexes, and more. They help clients who are involved with buying, selling, leasing or managing these properties in order to facilitate necessary transactions.
Agents that excel in this role have a strong pulse on the ever-changing real estate market, including trends and commercial real estate transactions in a given market. In their day to day, they work to prepare contracts, negotiate deals, and advise clients. The ability to maintain and grow strong relationships with potential clients and fellow real estate professionals is crucial to long term success.
The license is the same for residential real estate agents and commercial real estate agents in California. The basic education is the same. Yet the skill set is different, the learning curve can be longer, and the rewards might not come as rapidly for a commercial realtor vs. a residential agent.
Interested in a career change or growth opportunities in your current real estate position? Here’s what you need to know if you’re looking for how to become a commercial real estate agent:
To embark on a career as a licensed real estate agent, the first step is to meet the educational and age requirements.
The minimum age requirement to become a real estate agent is 18 or 19 depending on the state. The level of education needed to become a residential or commercial real estate agent is a high school diploma or GED- you are not required to obtain a college education.
If you meet the minimum requirements, the next step is completing your real estate courses. You will then need to enroll in real estate courses, online or in person, and complete the amount of required instruction hours to meet the eligibility for the licensing exam. California requires 135 hours of instruction.
Upon completion of your courses, you’ll need to apply to take the real estate license exam and pay the corresponding fee. From the time you submit your application, you have two years to pass with a score of 70%.
Before you can operate as a fully independent agent, you’ll need to work under a commercial real estate broker to gain the right experience and build your portfolio. Working at a firm allows you to gain real world experience and understanding of the market.
As you start out in the real estate industry, networking is key. To start expanding your network, try attending industry events, joining professional organizations, and participating in local business communities. Connections you build now can lead to potential clients down the line and lead to valuable business opportunities.
Choosing a commercial real estate brokerage is an important consideration as you’re establishing your career as an agent. You should select a firm that complements your goals and priorities and provides the resources you need to thrive. Consider factors such as the brokerage’s reputation, market presence, training opportunities, and commission structure.
Aside from the educational foundation you gain leading up to getting your license, there are other key skills that will set successful commercial real estate agents apart from the rest.
Negotiation Skills: Since you’ll be dealing with high-value transactions as a commercial real estate agent, you will need to be skilled in the art of negotiation. Success will come from your ability to strike favorable deals for your clients.
Business Acumen: In the business, you will need to evaluate the financial viability of commercial properties and guide clients through related decision making. As such, it is important to understand the ins and outs of how businesses operate and how to analyze financial data.
Communication and Networking: Strong communication skills will help you connect with potential clients and build a robust professional network. Focus on the skill of articulating your ideas clearly and learn how to build strong rapport so you can attract new business opportunities.
One of the most enticing aspects of a career in commercial real estate is the potential for growth and income. You play a vital role in facilitating lucrative transactions for businesses and investors, so there is strong upside to earn substantial commissions from big-ticket deals. As you gain experience and build a strong client base overtime, your earnings have the potential to soar.
If you’re committed to pursuing a career in the real estate industry but not quite sure whether you want to work in residential or commercial, there are a few key differences to keep in mind. For agents and potential agents who want to deal more with business people instead of consumers, the commercial space is a road worth traveling, says Gary Losey, a Commercial Senior Associate in our Carlsbad office.
After founding and operating multiple building supplies, services, and energy management companies for many years, Gary decided to become an agent in 2005. Utilizing the skills he developed as a business owner, he became a top commercial producer, and never looked back. We talked with Gary about how commercial real estate differs from residential, and what it takes to succeed in his chosen field.
In Gary’s case, it was his experience in industries that typically rely on commercial real estate. He founded and owned five traditional businesses that were primarily construction-related. So he became very familiar with the construction of different types of buildings, and properties, such as office, industrial, shopping centers, medical, as well as residential. He recently had a residential home in Del Mar in escrow for $2,550,000.
The primary benefits from that experience are threefold, Gary says. First is knowing how to operate a business, the finances, the expenses, the revenue-stream evaluation. So how to actually operate a business or multiple businesses is paramount. Second, and more important, is knowing how to write contracts. Gary has written and completed tens of thousands of contracts. The third is knowing how to negotiate, because commercial deals are highly negotiable, especially in large, high-profile deals.
Most if not all developers are attorneys, according to Gary, so commercial agents often deal with the attorneys in their development departments. Gary conducted transactions ranging from small $50 service calls to multimillion-dollar contracts and supplied lighting to over 3,000 new housing units per year. Having those three experiences is invaluable, he says.
As an example, Gary says, he concluded three or four deals last year that had over 300 different negotiated items each. His suggestion for new agents, if they don’t have that type of experience, is to focus on residential first, and become successful at it.
“My overarching recommendation probably would be to refer some deals out to an experienced commercial agent and ask if you can shadow them,” Gary says. “For example, I get asked a lot to mentor, and frankly I don’t do that, because it’s too challenging to go from a residential agent with zero experience to commercial. The distance is way, way further in order to be successful. You have to do a lot of deals. The gestation period for a commercial deal is much, much longer than it is in residential. The potential rewards are there, but the time in order to build up a base also is longer than it takes in residential.”
Gary believes having a large number of contacts might be the most important key to success. He was born and has lived in San Diego County his entire life. He attended San Diego State University, his father was a Navy Seal, and the family rarely moved. “So I know an enormous amount of people, plus my businesses had about 3,500 active clients at all times. An agent really needs to work on contacts if they expect to be successful in commercial real estate.”
Commercial agents have to follow the same licensing and education procedures as a residential agent. Even though many people think a different license is required for commercial, it’s the exact same license.
Gary’s take: “With the large brokerages, it’s a job, meaning full-time employment, not a part-time job. You have to be there. You have to be at all the meetings. You can’t go and come when you please. So you are having to put in anywhere from three to five years as, a lot of times what they refer to, as a runner or junior associate, and you’re learning every single day. It’s getting pounded into you.”
Whether it’s residential or commercial, consistency is incredibly important, Gary points out. It’s not the type of career where you expect to sign a few contracts and make a few big deals, then take some time off. “It’s constantly having to work the business,” he says. “It’s a profession and not just a catch-as-catch-can. In order to be successful, you have to be able to hit all the bases. Especially when it comes to leases, which are sort of the bread and butter of commercial.”
Learn more about our commercial division or connect with one of our Commercial Specialists.
Reviewed by Martha Mosier
Martha Mosier is the President of Berkshire Hathaway HomeServices California Properties and proudly serves as the top executive in this role. A real estate legal expert, she also has an extensive background in escrow, title, and commercial transactions. In addition to this role, Martha sits on the board of the company’s Charitable Foundation and also its I.M.P.A.C.T Council for Diversity and Inclusion. She has been honored with being named one of the nation’s Most Influential Business Leaders in real estate.
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