New Crop of Commercial Members Springs Up
July 28, 2016
With a recovering economy, more agents are getting into the commercial real estate game.
The number of commercial members with less than two years of experience nearly doubled to 9 percent in 2016, from 5 percent in 2015. The median years of experience in real estate dropped to 15 years in 2016 from 20 years in 2015, as did the median years of experience in commercial real estate, down from 25 years to 20 years. The industry also saw an increase in the percentage of female commercial REALTORS®, up two percentage points to 27 percent of the total.
The 2016 NAR Commercial Member Profile was based on a survey of 2,048 members. Income and transaction data are for 2015, while other data represent member characteristics in 2016. Approximately 80,000 commercial real estate professionals are members of NAR, making it the largest commercial organization in the industry.
The number of new commercial members increased significantly last year, according to the 2016 National Association of REALTORS® Commercial Member Profile. The annual study surveys NAR members who conduct all or part of their business in commercial sales, leasing, brokerage and development for land, office and industrial space, multifamily and retail buildings, as well as property management.
“As the U.S. economy continues to experience strong, steady recovery, NAR has seen more and more members choose to specialize in commercial real estate,” NAR President Tom Salomone said in a statement accompanying the study’s release. “REALTORS® who practice commercial real estate help build and improve the economies of our local communities, so as a community’s commercial real estate market grows and improves so does the local economy.”
As newer members make up a larger segment of the overall population of commercial REALTORS®, it’s perhaps unsurprising that the median annual income and number of sales transactions of the group decreased slightly. The median gross annual income for commercial members in 2015 was $108,800, down from $126,900 in 2014. And 8 percent of commercial members reported not having a transaction at all. As NAR Chief Economist Lawrence Yun points noted, “the more years of experience in commercial real estate a member has, the more revenue they take in.”
Brokers and appraisers reported the highest annual gross income at $145,800 and $130,800 respectively while sales agents reported the lowest at $67,300, which is in line with last year’s results. Those with less than two years of experience reported a median annual income of $43,400 in 2015, down from $67,200 in 2014; and those with more than 26 years of experience reported a median annual income of $165,385 in 2015, up from $162,800 in 2014.
The influx of new commercial members appears to be coming predominantly from new sales agents and not from experienced brokers. That’s resulted in a 12 percent drop in the percentage of brokers who practice commercial real estate, settling in at 47 percent in the survey, with licensed sales agents making up 31 percent. The remainder is made up of broker-associates (17 percent) and appraisers (5 percent). Despite this increase in sales agents over brokers, the the median age remained the same as last year, at 60 years old. That’s seven years older than the average REALTOR®, according to the median age reported in NAR’s 2016 Member Profile earlier this year.
The increase in commercial members may also be powered partially by an increase of outsiders who are interested in investing in U.S. real estate. Thirty-five percent of commercial members were involved in international transactions in 2015, up from 32 percent in 2014. Commercial sales agents had the most experience with foreign clients with 45 percent reporting an international transaction. Nineteen percent of all respondents saw an increase in international clients, while only 1 percent reported a decrease.
Recent Stories in This Section
Recent Stories in This Section
Updated: June 18, 2019