The Truth About Starting in Commercial Real Estate Brokerage

Brokerage is one of the most misunderstood parts of the commercial real estate industry, and not all jobs in brokerage are created equal.

And while you can make a lot of money as a broker if you’re good at what you do, there are multiple paths you could take to get there, each of which will give you a very different experience.

So in this post, we’ll talk through what it’s really like to start a career in commercial real estate brokerage, and the things you should be thinking about if this is where you want to be.

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The Two Main Paths in Brokerage

When you first start out in brokerage, there are really two main paths you can go down: the sales path and the analyst path.

On the sales path, you’ll typically be on 100% commission without any base salary, and your main goal will be to generate new business.

On the analyst path, you’ll usually have a base salary along with an annual bonus, and your main focus will be to underwrite deals and put together pitch decks (to support sales-focused producers on your team).

The First 3-5 Years

Regardless of which of these two paths you choose, the first thing you need to know about a career in brokerage is that your first 3-5 years in this part of the business are typically really hard.

If you start out on the 100% commission route at a company like Marcus & Millichap with no real estate experience and no relationships in this industry, it can take a really long time just to get your first listing.

And this means that you need to go in prepared to make very little (or no) money in your first 18-24 months on the job, or sometimes even longer when transaction activity is low.

In a lot of markets, junior brokers will also work under a more senior broker who acts as a mentor, with the goal of getting you up to speed as quickly as possible. In these situations, you’ll also usually be expected to help with things like showings or basic administrative work for your mentor, in addition to building out your own book of business.

If you choose to go the salaried route as an analyst at a company like CBRE, JLL, or Eastdil, this comes with its own set of challenges that are different (but just as hard).

Investment sales and debt and equity placement roles at these shops are some of the most competitive jobs in commercial real estate, with a lot of networking and a lengthy interview process required just to get your foot in the door.

And when you do land one of these jobs, these also usually come with extremely long workweeks and extremely high expectations, with very little room for error on the work product you produce.

The Upside

Even though your first few years in brokerage can be really hard, if you can make it about 5 years in this part of the business, you’re very likely going to be outearning your peers by a very wide margin.

I did a lot of informational interviewing in my mid-20s, and during that time, I heard a lot of stories about young brokers just a few years out of college making $300,000-$400,000 per year. I also heard a lot of stories of more experienced brokers making 2-3 times that, and a few guys in their early 30s making seven figures per year.

Even though you can make great money on the principal side of the business in acquisitions or asset management roles (with a lot more stability than you’d see in brokerage), the upside potential when you’re a salaried employee just isn’t as high as what you could make on commission.

Brokers with about 5 years of experience also tend to have a lot more autonomy on a day-to-day basis than people working in acquisitions or asset management roles, especially if you’re hitting your sales targets.

The key takeaway here is that, if your main goal is to maximize your earning potential over the long term (and you’re OK with what could be a pretty bumpy ride to get there), it’s really hard to beat going the brokerage route.

Two Different Experiences

The next thing you’ll want to be aware of going into this part of the industry is that the path you choose to take can have a huge impact on your experience.

In a 100% commission-based role, you’ll be doing a lot of cold calling and very little analytical work, which can be great for some people and not so great for others.

For people who have no interest in the numbers or people who are extremely competitive and thrive in a sink-or-swim environment, these types of roles are great places to be. But for people that get into the industry with the goal of learning how to analyze investment opportunities or work on high-profile transactions, these types of jobs can leave a lot to be desired.

Alternatively, for people who want to work on big, complex deals with major private equity firms and institutions as clients, an analyst role can be a really good fit. But for people who just can’t see themselves reading through commercial leases or building out financial models in Excel, these jobs can be extremely frustrating.

Entry-level analyst roles also tend to come with a lot more external pressure to perform, which can be great for people who enjoy working as part of a team and need that additional layer of accountability to be at their best. And on the other side of the spectrum, entry-level sales roles usually come with more internal pressure to perform, that’s much more centered around your own financial goals.

Both of these paths can lead to very high incomes and a lot of long-term success, but to minimize the amount of friction you’ll run into as you’re building your career, you’ll want to spend some time thinking about how you operate best when deciding where to focus.

Exit Opportunities

The last thing to keep in mind is really important for people who aren’t sure they want to be in brokerage long-term, and this is the difference in exit opportunities between these two paths.

Entry-level, 100% commission-based jobs are usually focused on middle-market deals in the ~$2 million-$10 million range, owned by individual investors with relatively small portfolios.

And while a job like this can be a great training ground to become a better salesperson, people in these jobs typically aren’t all that well-versed in real estate investment analysis or valuation, which can make it tough to transition out of this part of the business if you decide you want to move on.

This is especially true for people who want to move onto the principal side of the industry in an acquisitions or asset management role, since these jobs will almost always expect candidates to have a very strong knowledge of real estate finance and financial modeling in Excel.

And because these are things you’ll typically become very well-versed in when working in an analyst role in investment sales or debt and equity placement at a company like CBRE, JLL, or Eastdil, these jobs tend to come with significantly more exit opportunities if you decide that brokerage isn’t for you.

Because you’ll be working directly with major private equity firms and institutions on a day-to-day basis in these roles, it’s extremely common for analysts to go on to work for a client, which can make these great jobs to target for people who want to use brokerage as a stepping stone to break into acquisitions.

How To Build The Skills You’ll Need To Break In

If you want to make sure you have the technical skills you’ll need to land a job at a major brokerage firm and pass an Excel modeling exam that might be given to you during the interview process, make sure to check out our all-in-one membership training platform, Break Into CRE Academy.

A membership to the Academy will give you instant access to over 120 hours of video training on real estate financial modeling and analysis, you’ll get access to hundreds of practice Excel interview exam questions, sample acquisition case studies, and you’ll also get access to the Break Into CRE Analyst Certification Exam, which covers topics like real estate pro forma and development modeling, commercial real estate lease modeling, equity waterfall modeling, and many other real estate financial analysis concepts that will help you prove to employers that you have what it takes to tackle the responsibilities of an analyst or associate at a top real estate firm.