Closing a deal in the commercial real estate (CRE) world is the culminating moment that brokers work tirelessly to reach. It’s more than just a signature on the dotted line; it’s the summit of a long and often arduous journey. The Buildout CRE report reveals eye-opening trends and insights into how deals are being managed and closed in the industry. Let's dive into the two primary questions Buildout has explored: Which brokers are earning the most, and where? And how is the market evolving over time?
According to the report, brokers focusing on hospitality sales are making top dollar in 2023, with average commissions between $46,000 and $53,000 per deal. This is closely followed by brokers specializing in multifamily sales. Interestingly, even though multifamily sales brokers are handling some of the most significant transactions, their commission falls short compared to their hospitality counterparts.
When it comes to leasing, brokers representing tenants looking for land bring in an average of $30,000. Geographically, the state of Georgia boasts the highest average broker commission. In contrast, the Southwest and Plains regions record the lowest. Access the report to find out how much.
While it’s tempting to measure success in absolute monetary terms, our report focuses on 'market share' for a more nuanced view. In the sales sector, land initially had the most significant market share but saw a contraction both in share and absolute volume. Unsurprisingly, multifamily demonstrated the most explosive growth, tripling its market share.
The leasing sector saw industrial spaces dominate, capturing over half of all transaction volume by September, up from 39% at the start of the year. Office leasing, perhaps impacted by remote work trends, saw a decline in both monetary volume and market share.
Regionally, the Southeast leads the way, representing about a third of the total market. However, it did see declines in both transaction volume and market share, echoing trends in the Southwest and Far West. On the flip side, the Plains, Great Lakes, and Mideast regions experienced notable growth, almost doubling their market share in 2023.
In an industry as dynamic as CRE, staying ahead requires a deep understanding of market trends and a focus on efficient deal management. Buildout's recent report serves as a valuable guide for brokers looking to navigate the intricacies of closing deals successfully. From commission trends to evolving market shares, the insights provided are instrumental for any broker aiming for the top.
So as we look towards the future, one thing remains clear: understanding the nuances of deal management is essential for success in the ever-changing landscape of commercial real estate.
