Commercial real estate brokers get paid a commission on the deals they close. These commissions are paid for by the landlord or seller, no money comes out of your pocket.
The commission fee is built into the deal and the full amount will get paid to all brokers involved. That means if you do not have someone representing you, the entire commission amount will go to the broker representing the landlord or seller. Do not think that you will get a better deal if you don’t have a broker, because you won’t. The entire commission amount will be paid, it will just go to the landlord or seller’s broker. It would be in your best interest to have your own representation.
Commission rates are negotiated and it is illegal to set an industry standard, but can range from 2-8%. For leases it is based on the total rent over the term. Sales are based on the final sale price. Typically, the higher the sales price, the lower the percentage. For example:
5-year lease x 2,000 SF x $12.00 per SF
Sale Price: $4,000,000
Sale Price: $15,000,000
* split between tenant/buyer and landlord/seller representatives
It is very important to understand that it will not save you money to be your own representative. In fact, you will more than likely rely on the landlord’s representative for some guidance during the process, but their fiduciary duty is with the landlord, not you. You will probably end up paying more in rent and have fewer concessions if you do not have your own representative looking out for your best interest.
Let’s look at a couple of scenarios:
You have a tenant rep broker
Your tenant rep broker finds you the space, guides you through the process, and negotiates with the landlord for the best deal. For leases, the landlord pays the broker the first half when the lease is signed and the second half when you move in. Sales commissions are paid 100% at the time of closing.
You do not have a tenant rep broker
You may have thought you would save some money by going directly to the landlord. You have spent your own time doing some research, but probably not enough to know what a fair market rate would be or what concessions you should ask for. You will be dealing directly with the landlord’s broker. As mentioned above, their loyalty is to the landlord and the deal will be in their favor. You will not get the best deal going this route. At the end of the day, the landlord’s broker will be earning the commission your own broker could have earned.
Regent Real Estate are experts in their field and would welcome the opportunity to talk to you about your real estate needs. Contact them today.
By Guizmo|2020-02-10T11:21:03-05:00February 15th, 2020|Categories: Blog|Comments Off on How do commercial real estate brokers get paid?
CCIM (Certified Commercial Investment Member) is a designation that recognizes the leading experts in commercial real estate investment. It is achieved by those who have proven they are leaders in financial/market/investment analysis and negotiation. A CCIM is earned through advanced coursework, passing a comprehensive exam, and demonstrated experience in the industry. This self-paced program typically takes between one to three years to complete.
Why it’s a big deal.
The CCIM designation is an elite group of professionals, with only an estimated 6% of industry professionals holding this title. The professionals who go through this process are committing to becoming a leader in their profession. They are committing to:
An extensive, 4-course curriculum
Other elective courses as needed
Two days of pre-exam course review
Full day final exam
Submitting a comprehensive portfolio
What this means for our clients.
Regent Real Estate has two CCIM designees: Brian Smith and Barrett Fowler. That means that they have the skills and the credibility to guide clients through the complex world of commercial real estate investing. They also have access to the most current education and an exclusive network of other CCIM professionals who specialize in commercial real estate investing such as appraisers, bankers, accountants, and lawyers.
Curious about commercial real estate investing? Regent Commercial Real Estate has the commercial real estate investing expertise you need. Contact us at email@example.com or firstname.lastname@example.org.
*Visit www.ccim.com for more information on this designation
2019 – what a year! Thank you to all the clients that allowed us to help them with their real estate needs.
Whew! 2019 was a busy year for Regent Commercial Real Estate, with 333,136 square feet of deals done with an aggregate value of over $19,000,000. We helped clients in North and South Carolina, Alabama, and Florida.
255,558 square feet of industrial leases
36,000 square feet of industrial sales
22,335 square feet of retail leases
19,243 square feet of office leases
As you can see, our commercial real estate specialists are experienced in buying and leasing all types of commercial real estate. We offer personalized solutions regardless of your size or use.
Building long-term relationships with our clients is what we do. We are not a one and done real estate firm. We take the time to get to know our clients and understand what their real estate goals and challenges are by looking at the big picture. We are determined and willing to take on the tough deals with creative solutions.
We welcome to opportunity to earn your business. Contact us today for a consultation.
Brian Smith, CCIM, is the founder Regent Commercial Real Estate. He has a knack for finding the best deals for his clients.
Barrett brings over a decade of experience in multiple facets of commercial real estate, including development, finance and corporate real estate. Prior to joining Regent Commercial Real Estate, Barrett served as the Transaction Director for CBRE on the Regions Bank account where he managed a team of brokerage professionals responsible for office, retail, and ATM transactions across Regions’ 16-state portfolio. He also held various and progressive roles in Bank of America’s corporate real estate group.
Barrett specializes in and advises clients throughout the Southeast on:
Strategic planning and execution for clients with multi-property portfolios
Acquisition of 60,000 square foot office building in Raleigh, NC
Acquisition of 800,000 square foot retail mall in Roanoke, VA
Sale-leaseback of 150,000 square foot office building in Coral Gables, FL
Education and Designations:
BSBA, Auburn University
MBA with concentration in Real Estate, University of Georgia
Certified Commercial Investment Member (CCIM)
Licensed Real Estate Broker, North Carolina
Licensed Real Estate Broker, South Carolina
Licensed Real Estate Broker, Alabama
In his spare time, Barrett enjoys spending time with his wife, Carrie, and three children, Owen, Emery, and Ethan. He also enjoys hiking the mountains of Western North Carolina, all things bluegrass, cycling, and is a die-hard Auburn fan.
As we start a new decade, it is a great time to reflect and be thankful for all of the people and businesses that I have been able to help last year. In addition to helping clients with commercial real estate needs in the Charlotte, North Carolina market area I was also able to help clients with requirements in the following market areas in 2019:
• Boiling Springs, South Carolina
• Beaufort, South Carolina
• Charleston, South Carolina
• Columbia, South Carolina
• Asheville, North Carolina
• Raleigh, North Carolina
• Greenville, South Carolina
• Spartanburg, South Carolina
• Winston-Salem, North Carolina
• Greensboro, North Carolina
• Knoxville, Tennessee
• Birmingham, Alabama
• Cincinnati, Ohio
• Atlanta, Georgia
• Orlando, Florida
If you have a commercial real estate requirement in North Carolina, South Carolina, or another market in the South East I would like to have an opportunity to speak with you to find out how Regent Commercial Real Estate can partner with your company to maximize your commercial real estate opportunities. Thank you!
As we near the end of another year, many people like to take stock of 2019 and make plans for 2020. While the most common resolutions are to eat healthier, lose weight, or quit a bad habit, you might want to considering making some professional resolutions. If you haven’t put much thought into your commercial space needs, now is the perfect time to assess your current office/warehouse/retail space and determine if it will still work for you in the new year (and beyond). Even if you have some time left on your lease, it would be in your best interest to havea game plan in place now.
Here are a few items to consider when evaluating your commercial space needs…
Finding the right office space is a little like the Goldilocks and the Three Bears story. It shouldn’t be too big, or you will find yourself wasting money on space you are not utilizing. If you don’t have plans to expand there is no reason you should be paying forspace you will never need.
It also shouldn’t be too small. If your conference room has become a workstation(s), or if you are using your break room for overflow storage, it is probably time to start looking for more space. Crowded and inefficient workplaces will start having a negative effect on your employees.
Your space needs to be just the right size for you and your employees. With the right amount of square footage, you will be able to achieve an efficient layout that utilizes the entire space. Plus, you will only be paying for the amount of space you truly need.
While many things in a commercial space can be changed, location is not one of them. If you find yourself in a location that doesn’t meet your expectation, or you are pining to be in the hottest and newest part of town, you might want to start making plans to relocate. There are many factors that go into relocating, but the most important one is to start planning early.
You will find properties offering all kinds of amenities. Some amenities are pretty basic, like security and reliable infrastructure. Some are nice to have, like close proximity to transit and food and beverage options. Premium options like a health/fitness center or rooftop deck will be offered in the higher end buildings. Maybe take a quick survey of your employees and see if they are happy with their current amenities.
Rent can be one of your biggest expenses in business. Are you confident you are paying market rates? If you signed a lease without representation you might want to consider having a tenant rep broker review your lease and determine if your rate reflects the market. Don’t keep throwing money out the window if there are better alternatives out there for you.
You do not have to settle for a so-so home for your company. If you have any doubts about your current space, you should make it your 2020 resolution to thoroughly review your real estate situation with a qualified commercial broker. They can give you an unbiased recommendation and advise you on future real estate decisions.