Careers in real estate fall into two broad categories, each of which has its own unique set of challenges and rewards. Residential real estate agents work with individuals to find them their dream homes or investment properties, whereas commercial real estate agents also help businesses find and secure the perfect premises.
There is a degree of affinity between the two, as brokers in both sectors require excellent sales and networking skills. If you are considering moving into commercial real estate, it is important to appreciate what the differences are between residential and commercial real estate agents and assess whether they suit your skill set and ambitions.
Commercial real estate can be a fast-paced and exciting industry to work in, but sometimes things move slower than in the residential sector. While residential property sales can close within two months, commercial deals may take six months or more to complete. This is because there are additional factors involved in commercial property transactions, such as legal restrictions on how buildings can be used. However, this side of real estate can also be even more lucrative than residential, with the American National Association of Realtors reporting an average commercial salary of $96,000 last year. Many brokers will earn in excess of that, showing that there are impressive rewards for those willing to wait longer for deals to close.
Commercial clients are less emotionally involved in the process than residential ones, which does have its advantages for analytical thinkers. It can be more difficult to close a residential sale, as it's harder to accurately predict what home buyers want and to account for any sentimental factors in their reasoning. However, commercial clients will by necessity prioritise properties that have all of the features their businesses need. Providing you work to their specifications, there should be little reason for them to reject properties that do fulfil the brief – although conversely, this does mean that they’re less likely to agree to premises that are not exactly what they are looking for.
The right attitude
The way you engage with your clients must be far more formal when they are financially aware business people. This is an unspoken but crucial rule, because although a more relaxed, amiable demeanour might be appropriate when dealing with individuals, corporations are more interested in seeing how commercially capable and astute you are. Firms in this sector consequently prefer to hire brokers with an education in business and look for financially literate employees, comfortable with concepts like capitalisation rates and gross rent multipliers.
Committing to success
Residential positions are often very flexible and give the opportunity of working part-time. However, the commercial sector is very competitive, so prospective brokers need to be fully committed in order to establish themselves in the industry. Working with a reputable company that can give you expert training and access to the most exclusive clients and properties will give you the best foundation for this.
If you believe you have the skills to become a commercial real estate agent, consider a career with Engel & Völkers. Our commercial department is constantly expanding and we’re always searching for bright, motivated agents around the world. Visit our careers page for more information.