According to data from Cushman and Wakefield, retail rents along Manhattan’s 5th Avenue average around $3000 per year. At first blush that might sound pretty reasonable— even downright affordable—until you realize they’re talking about $3000 per square foot. That means a space roughly the size of a vinyl record will run you $250 per month on 5th Ave. It also means someone with a commercial real estate license is making a 7 figure income leasing these spaces.
We talked to experts in the field and put together this guide on how to get your commercial real estate license and start your career buying, selling, and leasing commercial real estate. While the road to commercial real estate nirvana is different for everyone, this guide will run through the core skills and education you’ll need to get started.
What is a Commercial Real Estate Agent?
Much like a residential real estate agent, a commercial real estate agent represents sellers, buyers, landlords or lessees of commercial real estate. However, since commercial real estate transactions tend to be more complex than residential transactions, commercial real estate agents generally have more professional experience and education than their residential counterparts.
Commercial Real Estate License Courses Required in Your State
If you’ve been searching the internet looking for “commercial real estate licensing course” only to find no results, don’t panic. All prospective real estate agents, whether residential or commercial, take the same licensing course in order to practice real estate.
While the requirements vary widely by state, most states 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. As far as difficulty level, most courses are roughly on par with an entry level college course.
As far as pricing goes, expect to pay anywhere from $150—$500 depending on your state, and what format you decide to take the course in. As you can imagine, live courses are generally more expensive than online or study at home courses.
Here’s a quick breakdown of the course length and topics covered for the six largest states in the country.
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
60 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 OnCourse Learning’s online courses.
Pass the Test and 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 75-150 multiple choice questions covering the topics you learned during your licensing course.
While the tests are not that difficult if you study hard, pass rates generally hover around 50-60%. 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 week to get your results, then another week or more to receive your license.
Find a Commercial Real Estate Brokerage to Work for
Congratulations! Now that you’ve passed your test and received your real estate license, you have now greatly increased your career prospects in real estate. You can now pursue a career in residential sales or leasing, commercial sales or leasing, or even appraisal or property management.
Since you’re 80% done reading an article on getting a commercial real estate license, let’s focus on strategies to help jumpstart your commercial real estate career. Generally speaking, there are two tried and true paths to success in commercial real estate.
The First Path: Joining a Team that Handles Residential & Commercial Rentals and Sales
Since getting your first deal in commercial real estate can take far longer than in 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. While a commercial lease can take months to close, most residential leases close in a week or less. That means 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 a very experienced commercial broker.
The Second Path: Joining a Commercial Real Estate Brokerage 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 $25,000-$45,000 per year as a trainee. Some training programs are unpaid.
Optional: Join NAR, ULI or REBNY
After joining a commercial real estate firm, you may be required to join a professional association like NAR, ULI (The Urban land Institute) or REBNY ( the Real Estate Board of New York). Each offer networking and continuing education opportunities, as well as discounts on software and services you may want to work with.
Joining NAR, REBNY, or ULI might not help you directly as a new commercial agent, but your brokerage will more than likely ask you to join at least one group.
How Much Do Commercial Real Estate Agents Make?
According to the NAR, the median gross annual income for a Commercial Real Estate Agent in 2015 was $108,800. That breaks down to a median of $67,300 for Sales Agents, $125,000 for Associate Brokers, and $145,800 for Brokers.
While the earning potential for both residential and commercial real estate are only limited by how hard you work, median incomes for commercial real estate are still significantly higher. Here’s a quick comparison of the differences in median gross incomes for residential and commercial agents and brokers.
2015 Median Gross Annual Income: Residential vs Commercial Real Estate Agents
|Commercial||2015 Median Gross Annual Income||Residential||2015 Median Gross Annual Income|
|Sales Agent or Associate||$67,300||Sales Agent||$29,560|
|Broker Associate||$125,000||Broker Associate||$54,910|
**All data from 2016 NAR Annual Member Profile & 2016 NAR Commercial Member Profile
Running the Numbers: Why Commercial Real Estate Agents Earn More
While this chart clearly shows 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:
- First of all, median incomes for residential real estate professionals are skewed by the very large numbers of new agents and part-time agents. 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 60+ hours per week.
- 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.
- As a rule of thumb, most commercial agents work full time; at least 40 hours per week
- 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.
- Finally, median sales prices and rents are generally much higher for commercial real estate. That means bigger commission checks.
Is Commercial Real Estate Right for You? Assess Your Current Skills and Qualifications to Find out
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, that means looking at your soft skills and hard skills.
Assessing Your Soft Skills
While residential real estate doesn’t exactly reward shrinking violets, commercial real estate often demands gravitas and bravado to even get your foot in the door. Clients and deals are much harder to come by, and the competition is far more experienced, and far more aggressive. That means 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.”
Jeff Howell, veteran Commercial Broker and CEO of LeaseRef agrees that confidence is king when hiring new commercial associates:
“Our approach is to look for people that have done well in a tough role and are not afraid to brag about it. We once hired an agent who proudly boasted on his LinkedIn profile that he averages 232 cold calls every day in the executive search business. We would much rather hire someone who has graduated the school of hard knocks, so our advice to aspiring real estate professionals is to show prospective employers how you survived and thrived in pressure situations.”
How confident are you? How would you feel about making 232 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.
Assessing Your Hard Skills
While a magnetic personality and 1000 watt smile might almost guarantee you a job in residential real estate, commercial real estate brokerages tend to be pickier with new hires. 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.
Do You Have a Degree from a 4 Year College?
While a four-year degree isn’t necessary to get your foot in the door of a residential brokerage, many larger commercial brokerages won’t consider new associates without one. 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.
Finance, Accounting, Real Estate, or Economics Majors Have an Advantage
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 to working in the field.
Assessing Your Professional Experience
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.
Assessing Cultural Fit
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 laidback 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. That said, you should also realize that during your first year you’re probably going to be far too busy to notice.
The Bottom Line
While getting a commercial real estate license isn’t for everyone, with the right soft and hard skills, and the right education, you too can one day sell, buy, or lease some of the most expensive real estate on the planet.