This article is part of a larger series on How to Become a Real Estate Agent.
Agents with a commercial real estate license have an average income double that of residential agents, with many agents bringing home six and seven figures. This is because commercial properties tend to be priced higher and transactions are more complex. However, this specialization requires additional skills and knowledge to serve the needs of landlords and lessees, which can also make commercial agents more in demand.
While the road to commercial real estate success is different for everyone, this guide will show you the first steps to take and the core skills you’ll need to get started.
1. Complete Courses Required in Your State
All prospective real estate agents, whether residential or commercial, take the same licensing courses as those who plan to become a residential real estate agent. While the requirements vary widely by state, they generally require somewhere between 60 and 120 hours of coursework followed by a state-administered exam.
The topics covered in these courses run the gamut from residential sales and leasing, fair housing laws, types of real property ownership, commercial real estate, and other national and state-specific content. Most courses are roughly on par with an entry-level college course.
As far as pricing goes, you can expect to pay anywhere from $150 to $900 depending on your state, and what format you decide to take the course in. As you can imagine, live courses or intensives are generally more expensive than online or study-at-home courses.
Here’s a quick breakdown of the course requirements needed to get a real estate license in the six largest states in the country:
Required Number of Education Hours
75 hours of the following courses
9 semester credits or 12 quarter credits (135 hours) of the following courses
63 hours of the following courses
180 hours of the following courses
90 hours of the following courses
75 hours of the following courses
If you don’t see your state listed here, or want to learn more about real estate licensing courses, you should check out Real Estate Express, which offers a number of affordable courses to help you meet state licensing requirements, exam prep support, and professional resources that can help you prepare for the next step in your real estate career.
Discount: For Fit Small Business readers, use promo code FSB25 for 25% off your purchase of any Real Estate Express class. Click here to get started.
2. Pass the Test & Get Your Commercial Real Estate License
Once you’ve completed the coursework required in your state to be eligible for a real estate license, you need to pass your state’s licensing exam. Exams are generally administered by your state and will have anywhere from 75 to 150 multiple choice questions covering the topics you learned during your licensing course.
Did you know: While the tests are not that difficult if you study hard, pass rates generally hover around 50% to 60%. If you want to make sure you pass your test on the first try, then you should strongly consider buying a real estate exam prep package or real estate practice exam software to help you study more efficiently.
Once you’ve taken your test, you may need to wait a few days to a few weeks to get your results and finally receive your license.
3. Find a Commercial Real Estate Brokerage to Work For
Once you’ve passed your test and received your real estate license, you can now pursue a career in residential sales or leasing, commercial sales or leasing, or even appraisal or property management. However, to legally, and successfully, start conducting business as a commercial agent, you must first find a sponsoring brokerage offering the experience you need.
To do this, there are two tried-and-true options:
Option 1: Look for Teams Handling Rentals & Sales
Since getting your first deal in commercial real estate can be more complex than residential real estate, you may decide to cut your teeth at a firm that allows you to do both. In a large city like New York or San Francisco, rentals can be an extraordinarily lucrative and quick source of income while you develop your commercial real estate knowledge and clientele.
This is because a commercial lease can take months to close, while most residential leases close in a week or less. A brokerage that handles both residential and commercial transactions, therefore, can mean quick cash for rent and groceries while you work toward getting your first commercial deal.
The only slight drawback here is that very few brokerages are evenly split between commercial and residential sales and leasing. Most are either all or mostly residential, or all or mostly commercial. That means while you may get a quicker, easier source of income, you’re probably not learning from a very experienced commercial broker.
Option 2: Look for Brokerages With a Salaried Training Program
The second way to start your career in commercial real estate is to join a commercial real estate brokerage that has a training program for new associates. Generally speaking, most training programs will last a year or more, and some brokerages offer salaries to their trainees, which means no need to hustle for deals right away.
The only drawbacks here are that brokerages that offer salaried training programs are generally pickier about who they hire. That might mean a longer job hunt, and, possibly worse, a lower than expected training wage. Depending on your location, skills, and the company you’re applying to, you might get anywhere from $30,000 to $45,000 per year as a trainee. Many training programs are unpaid.
Visit our article on how to choose a real estate company to work for to learn more tips.
4. Become a Member of Industry Associations
While not all states require agents to join an association, many brokerages do as a condition of joining the agency. This is because these associations provide their members with added credibility in the marketplace. Additionally, this is a good idea because each association offers different networking and continuing education opportunities, as well as discounts on software and services you may want to work with.
A few of the best-known associations for commercial agents are the following:
- NAR (National Association of Realtors)
- ULI (Urban Land Institute)
- REBNY (Real Estate Board of New York)
Commercial Real Estate Agent Salaries
According to the NAR member profile, the average income of residential real estate agents in 2018 was $41,800. That said, the median gross annual income for a commercial real estate agent in 2018 was $153,000. While the earning potential for both residential and commercial real estate is only limited by how hard you work, median incomes for commercial real estate are still significantly higher.
Although the numbers clearly show the vast difference in median earnings for residential and commercial real estate agents and brokers, there are a few important caveats to keep in mind:
- Median incomes for residential real estate professionals can be skewed: There are a very large number of new agents and part-time agents who bring the average income down. As you can imagine, a brand-new agent working strictly on commission is not going to make anywhere near as much as an experienced agent. Likewise, a residential agent working 20 hours per week is not going to make as much as an agent working over 60 hours per week.
- Commercial real estate professionals have more experience: Since the barrier to entry to start a commercial real estate career is higher, there are far fewer brand-new agents working in the field. There are also very few part-time commercial real estate agents or brokers.
- Commercial real estate professionals work full time: As a rule of thumb, most commercial agents work at least 40 hours per week.
- Commercial real estate agents start with a salary: Many entry-level commercial real estate agents start their careers as salaried employees. As they move up the ladder, they either move to a combination of salary and commission or straight commission. Meanwhile, almost all residential real estate agents work on commission only.
- Commercial property is more expensive: Finally, median sales prices and rents are generally much higher for commercial real estate. That means bigger commission checks.
Is a Commercial Real Estate Career Right for You?
Before you even think about signing up for real estate classes or picking out a brokerage, you need to take an honest assessment of your current skills. For a career in commercial real estate, consider your soft skills—your personality type and strengths—as well as your hard skills and experience.
While residential real estate doesn’t exactly reward shrinking violets, commercial real estate often demands gravitas and bravado just to get your foot in the door. Clients and deals are much harder to come by, and the competition is far more experienced and aggressive. Confidence and resilience are core soft skills needed to thrive in commercial real estate.
Here’s Marina Filichkina, Head of Sales for global commercial real estate firm Tranio, on the importance of confidence:
“First and foremost, we look for people who have genuine confidence. I’m not talking about boastfulness—I’m talking about confidence that’s rooted in experience and in-depth insights into the market. At the same time, we look for salespeople who know when to ask for help from or defer to their supervisors and more experienced colleagues. You can usually tell from the moment a person walks into the room whether they have the sort of genuine confidence it takes to be a top-notch salesperson.”
Questions to ask yourself about your soft skills include:
- How confident are you?
- How would you feel about making 200 cold calls every day?
- Does the idea of walking around a neighborhood and knocking on the door of every single business sound exciting?
- How about knocking on the same door a week after the owner slammed it in your face?
If this sounds like a challenge rather than torture, then a career in commercial real estate might be for you.
In addition to confidence, persuasiveness and relationship-building skills are also important soft skills for working in commercial real estate. Do you find it easy to get people to open up to you? Are you the type of person who can quickly and easily establish a rapport with the new barista at your local coffee shop? If so, you might have one of the core soft skills most commercial real estate brokers are looking for in new associates.
How to Get Hired as a Commercial Real Estate Agent
While a magnetic personality and 1,000-watt smile might almost guarantee you a job in residential real estate, commercial real estate brokerages tend to be pickier with new hires than their residential-focused counterparts.
There are two very good reasons for this. First, commercial real estate deals are more complex and require more finesse to find and close than residential deals. Second, because of the relatively steep learning curve, many commercial real estate firms pay entry-level associates a salary while they learn the ropes.
Here are a few things that commercial brokerages tend to look for when interviewing potential agents:
Relevant Educational Background
While a degree isn’t absolutely necessary, many larger commercial brokerages won’t consider new associates without a degree from a four-year college. For the largest, most successful firms like CBRE, JLL, or Cushman and Wakefield, you might have trouble getting a job if your degree isn’t from a tier-one school.
In addition, since there is a lot more behind-the-scenes analysis work in commercial real estate, many brokerages look for candidates with four-year degrees in business-related fields. High-level math and finance skills are great assets for working in the field.
Along with a four-year degree in a relevant field, many top commercial brokerages look for candidates with professional experience in high pressure, numbers-driven fields. If you’ve worked for an investment bank in residential real estate, property management, recruiting, engineering, architecture, or law, you’ll get more interviews at prestigious firms.
With a median age of 60 and a workforce that’s 73% male, the commercial real estate world still lags pretty far behind most of corporate America. If you’re coming from a younger, laid-back company, you may be disappointed to find out how buttoned-down and testosterone-filled many commercial brokerages are.
If this kind of environment bothers you, do your research before accepting a job offer. You can also check out our guide on the questions you should ask when interviewing brokerages for help completing this step.
Although getting a commercial real estate license has a higher median income, it isn’t for everyone. It takes specific expertise, training, and qualities to excel in this competitive, fast-paced field. However, with the right skills and the right education, you too can one day sell, buy, or lease some of the most expensive real estate on the planet.