Real Estate Analyst vs. Sales Roles [Where To Start]

When you’re trying to break into the commercial real estate industry at an investment or development firm, the standard entry-level position is usually an analyst role.

But on the brokerage side of the business, starting at the analyst level isn’t always a prerequisite, and some companies will allow you to jump directly into a production or sales-focused position right away.

And while going this route might sound like you’re effectively bypassing the analyst level, there are also a significant number of downsides related to going this route that most people don’t know the extent of.

So if you’re looking to break into commercial real estate brokerage and want to know whether an analyst or sales role is right for you, this article walks through the main pros and cons of each option, and some things to know before choosing where to start.

If video is more your thing, you can watch the video version of this article here:

Entry-Level Real Estate Brokerage Roles

If you want to start out in commercial real estate brokerage, you generally have two options – a production-focused position, where you’re directly responsible for finding clients and winning new business, or an analyst position, where you’ll be supporting producers and putting together investment materials for clients behind the scenes.

And while there isn’t necessarily a right or wrong place to start, these two paths can produce very different career outcomes, and each path will also give you a very different experience in the first few years of your career.

Production (Sales) Roles

To start off with production, these are generally 100% commission-based roles, meaning that your pay is going to be completely based on the results you can produce.

The upside of this is that your income isn’t capped, but at the same time, the downside of this is that your income has no floor. And for new entrants into the business, it’s not uncommon to go 12-18 months (or more) without making a commission check, which can be difficult to sustain when you’re first getting started.

These types of roles are also almost completely focused on sales, so while you might be trained in deal sourcing and business development, it’s highly unlikely that you’ll get much (or any) training on how to analyze and underwrite real estate investment opportunities.

Because of this, working in these types of roles can tend to leave some pretty significant gaps in your skill set if you plan to strike out on your own, and a lack of analytical skills can also make it more difficult to land a job on the principal side of the business if your goal is to transition into acquisitions or asset management.

The investment sales and capital markets teams at global, brand-name firms like JLL, CBRE, and Eastdil generally don’t even offer entry-level production roles for this reason, requiring new hires to start at the analyst level to develop a strong understanding of the fundamentals before communicating with institutional clients.

With that said, working with major institutions isn’t the only way to make money in commercial real estate, and this is by no means a requirement to be successful in the industry. While you can do very well financially working on trophy-case assets on behalf of major private equity firms and pension funds, some of the highest earning brokers in the industry deliberately choose to focus on smaller deals in the $5-$15 million dollar range, and make a very good living staying in that sweet spot.

Brokerage commissions in commercial real estate tend to move on a sliding scale, meaning that you might see a 3% sales commission on a $10 million transaction, but you might only see a 1% sales commission on a $100 million transaction, making the whole dollar commission amounts in these two scenarios significantly less different than they seem at first glance.

Larger, more complex transactions also often require larger teams to execute, meaning there are usually more mouths to feed on a $100 million deal than on a $10 million deal. And while that $1 million dollar commission check might need to be split between 6-8 people, that $300,000 commission check might only need to be split between two partners (or even a single broker) on the deal.

Working with local owners on smaller properties can also create unique opportunities to find value that just aren’t available in the institutional market today, with some of the most sophisticated investment firms in the world competing for properties in the $50-$500 million dollar range.

Learning how to source deals and sell is also a huge asset for your career overall, and if you can learn in a structured environment through a process that has worked for thousands of agents within the company before you, these are skills you can leverage in the future in any path you pursue.

Analyst Roles

If pure production roles don’t feel like the right fit, this means you’ll be targeting analyst positions, where your main focus will be on underwriting deals, valuing properties, and helping buyers and sellers work through due diligence.

And like I mentioned earlier, if you’re looking to go the institutional route, this is the standard prerequisite to moving into production, with 2-4 years in an analyst role almost always being necessary at global, brand-name firms.

These types of positions will allow you to learn from senior producers, study what you’re being asked to emphasize in offering memorandums, and see first-hand how experienced, successful brokerage professionals develop long-term relationships.

The technical skills you develop in these roles also tend to be very transferable to other parts of the business, so if you decide you don’t want to pursue a career in brokerage long-term and want to make a move into acquisitions, the underwriting and analysis skills you will have built will make you extremely well-prepared to make that happen.

From a compensation perspective, these positions also generally offer a base salary starting out, so you don’t have to worry about your basic needs being met like you would in a pure production role. In addition, many firms will provide their analysts with a bonus based on the production level of the team, which can often end up being 50%-150% (or more) of an analyst’s base salary.

With that said, you’ll inevitably cap out at a certain pay level in these roles, which is a notable downside at the analyst level. The timing of the move from analyst to producer can also tend to be out of an analyst’s control, and depends on the needs of the organization and market conditions.

For people who are looking to move into entrepreneurship, many of the assignments you’ll work on at the analyst level also may not feel applicable towards your long-term goals, especially if you’re working on deals that might be significantly larger or more complex than the deals you would end up targeting if you went out on your own.

How To Break Into Commercial Real Estate

Whether you’re looking to take the production route and want to make sure you’re well-versed in commercial real estate finance, or you’re looking to land an analyst role and want to make sure you’re prepared for 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. This exam 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.

As always, thanks so much for reading, and make sure to check out the Break Into CRE YouTube channel for more content that can help you take the next step in your real estate career.

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