Hiten Samtani and E.B. Solomont | The Real Deal
Commercial brokers are quite different from their residential counterparts. It takes them longer to crack into the market, they tend to stay at firms longer, and their world is arguably less glamorous — their jobs are less about understanding design, aesthetics and the lifestyles of the 1 percent than about being clued in on market information, deal structuring and a property’s income potential.
Another thing that separates them from their residential peers is, of course, money. At the top of the food chain, top investment sales brokers such as Eastdil Secured’s Adam Spies and Doug Harmon and CBRE’s Darcy Stacom and Bill Shanahan can make many multiples of the income of their residential counterparts. The same goes for office leasing; though the average New Yorker may never have heard of them, CBRE’s Mary Ann Tighe and JLL’s Scott Panzer are among the most influential and well-paid people in the industry.
Commercial brokers also tend to place great weight on which firm can keep them ahead of the curve. Market information and access to technology remain key motivations to choose one firm over another — having a 24-hour lead on a property that is coming to market could mean the difference between a fat commission and walking home empty-handed.
Last month, The Real Deal reached out to brokers and representatives of the city’s commercial firms to get insight on one question: What separates one brokerage from another? To do that, we asked more than two dozen major New York City commercial brokerages to complete a survey detailing the perks, benefits, tools and work culture their firms offer. Not all who were contacted responded, but TRD supplemented its survey by asking both market-leading brokers and current and former employees of these firms what they thought.
Read on for some of the highlights:
When GFI Realty Services moved its headquarters to 140 Broadway this spring, the firm snagged office space with panoramic, 360-degree views of the city’s skyline. While not every brokerage can say the same, GFI’s set up — with workstations for 30 brokers and phone booths for private conversations — is in line with the “open floor plan” style a number of brokerages currently employ, including firms like Massey Knakal.
Besides open workspaces, a number of companies have dedicated lounge or common areas. Eastern Consolidated’s hybrid layout features a combination of private offices, open areas with desks and multiple conference rooms. Meanwhile, national brokerage Lee & Associates, which also has a mix of offices and cubicles for its 43 agents, has a lounge dubbed the “Living Room,” where long tables and comfortable seating are “meant to encourage informal meetings, brainstorming and collaboration,” the firm wrote in its survey.
To give its agents common space, Cushman & Wakefield, with 180 brokers in its Midtown and Downtown offices, has a large “reception hub” that serves as a meeting place for clients and visitors, and the firm’s office at 1290 Avenue of the Americas has two large terraces for events.
At Cushman, it’s notable that while senior brokers get their own offices and junior brokers sit at workstations, no one has a so-called “corner office.” Those spots are reserved for conference rooms.
For commercial brokers, technology serves as a powerful conduit in dealmaking. “We’re in an information business,” said Eastern Consolidated co-founder and president Daun Paris. “The more efficient [an agent] can be in getting information collaboratively out to one’s colleagues, the more it benefits each broker.” The firm, which gives each broker a computer with two 22-inch monitors, employs a full-time, in-house tech manager. Brokers also have remote access to the firm’s technology, which includes ESRI mapping and a custom-designed customer relationship manager (CRM).
At Massey Knakal, headed by Bob Knakal and Paul Massey, a custom sales system called MKSS acts as both CRM and transaction manager — it gives agents direct access to the firm’s research database, which includes 140,000 buildings, 14,000 transactions and $155 billion in sales since 2009. Massey Knakal also offers brokers access to a Bloomberg Terminal, plus sites like PropertyShark, CoStar, LoopNet, and others.
A handful of firms have the distinction of offering Salesforce integration; Marcus & Millichap became one of them this past year. On top of Salesforce, agents there have the firm’s own technology at their disposal, including: a property database; iMpact, an automated marketing and proposal tool; and MarketPlace, which provides automated electronic marketing of listings.
Cushman & Wakefield, which also uses Salesforce, pairs that with another cloud-based tool, Workday, a proprietary mobile app for human resources and financial management.
At HFF, agents have either a laptop or desktop, but if, in addition, they want to bring in their own devices such as phones and tablets, service is covered by the company.
Commercial brokerages deploy a range of programs — from online classes to mentorships to weekly training meetings — to groom new brokers.
At Eastern Consolidated, new agents take a free one-year training program that teaches real estate analysis and research skills, sales and marketing processes and technology. “People are working on commission,” said Paris. “We’re committed to training them in a way to let them most effectively use our platform.”
Meanwhile, both GFI and Massey Knakal pair courses with mentoring programs. GFI’s 90-day training class is offered each quarter to new brokers, and new recruits are paired with senior brokers, who also have access to ongoing training.
RKF takes a slightly different approach to training new brokers: The firm hires new agents as “canvassers” who generate listings, conduct market research and learn about market analysis. “This then helps them transition into junior broker roles,” the firm stated in its survey. RKF also offers a summer internship program for college students that often transitions into a job as a canvasser after graduation.
One agent at Newmark Grubb Knight Frank, which did not participate in the survey, said the firm actively mentors new agents. “There is more strategy in hiring junior [associates] and methodically working with them and developing them and exposing them to business and meetings,” than at other firms, said the agent, who previously worked at Cushman & Wakefield.
Many firms address training at various stages of the agent’s career: For example, Cushman & Wakefield agents have 300 online courses at their disposal, and specific programs for new and inexperienced brokers.
For brokers with less than one year of experience, its “Launch” program covers real estate fundamentals and client-facing skills, and goes over the firm’s services via a combination of instructor-led programs, webinars, online learning and self-directed activities. Meanwhile, the “Emerging Broker Training Program” covers topics like business development, persuasive selling, presentation skills, collaboration, negotiation and team-building.
Ariel Property Advisors’ “Master Class” series invites industry professionals to share their experiences, and the firm has weekly training meetings to review best practices with agents.
With a proliferation of proprietary databases, the most powerful ones contain far more than listings.
For example, Marcus & Millichap’s MNet is a proprietary inventory- and buyer-tracking system. One member of a team that joined the firm this year said he was “blown away” by the firm’s deal volume and credited agents’ “ability to tap into that resource in real-time in order to find inventory for our clients [and] gain exposure for our properties.”
HFF’s database tracks $60 billion worth of transactions, as well as the investment objectives of the largest (and most active) domestic and foreign capital providers. HFF’s nearly 700 employees contribute to the database daily with deal and capital market data. The database’s information includes 25 years of capital markets experience, the firm said in its survey. Massey Knakal’s MKSS houses agents’ databases of properties and owners, and a shared list of investors, banks and tenants. “Agents share notes and data about owners and properties and have the ability to perform sales and marketing tasks such as the production of comparable sales, cold calls and marketing reports,” according to the firm’s submitted survey.
For its part, Cushman & Wakefield has 1,400 buildings in its proprietary database, named SiteSolutions. The firm also employs 11 full-time research employees, who update the database’s information each month.
When it comes to commission, top commercial brokers have greater earning potential than their residential counterparts — but commission splits are still key to unlocking that door.
Eastern Consolidated agents start at a 50 percent commission split, and they have the opportunity to reach 70 percent before the split is reset at the end of the year. Massey Knakal’s splits range from 50 percent to 65 percent, based on production, and splits also reset at the beginning of the year.
Lee & Associates, headed by James Wacht, starts junior associates at 50 percent, while high-producing brokers can achieve a 75 percent split. “Production, mentoring and technical skills” can qualify a broker for a higher split, the firm stated in its submitted survey.
Skydiving, yoga and cell phones are among the perks offered by some of the city’s top commercial brokerages. And that’s not even the half of it.
Massey Knakal offers top producers all-expenses-paid annual vacations — with recent destinations including Puerto Rico and Mexico. For everyone else, the firm regularly gives away free tickets to sporting events and hosts catered lunches for Halloween and Thanksgiving.
As for the skydiving? That’s an annual event at CPEX. Rafting? An annual expedition at Eastern Consolidated. Eastern also offers media training, corporate team-building functions, free tickets to industry events and conferences, yoga, golf outings and participation on company-sponsored sports teams.
Ariel Property offers catered breakfast twice a week, while Cresa NY offers free shoe shines.
Lee & Associates has office yoga, expense accounts to encourage networking and entertaining clients, and office excursions like rock climbing, skiing and poker. One Lee broker said mobile technology, and the ability to work from home or in the field, is a key perk. Once a month, the firm hosts an evening cocktail hour at the office, which is open to all.
Marketing advertising support
While none of the firms surveyed disclosed their ad budgets outright, firms that got high marks all helped agents take a targeted approach to marketing their listings.
For example, Marcus & Millichap helps agents market listings via the proprietary MNet listings database, which matches for-sale properties with specific buyers whose criteria match the listing. Only qualified buyers are targeted with direct marketing campaigns.
“For big time presentations, the marketing team does graphic design work the average Joe can’t do to tell a story,” said one Newmark agent.
Cresa New York, a 26-agent firm open since 2001, also has an in-house marketing and graphics team that works with each broker. “Each presentation is tailored to the specific situation — we have no ‘cookie-cutter’ presentations,” the firm stated in its survey.
It should also be noted that reaching a broader audience isn’t a bad thing. Massey Knakal sends multiple weekly listing e-blasts and markets listings via CoStar and LoopNet, and Eastern Consolidated has a company newsletter, “Streetpulse,” which reaches over 25,000 investors, the firm said. Its “Word of Mouth” blog contains articles written by brokers.
In an industry full of independent contractors, several commercial firms stand out with robust benefits packages.
Case in point: Cushman & Wakefield’s array of benefits ranging from health to retirement savings. At Cushman, medical benefits are “salary banded,” meaning the firm will provide a greater subsidy for associates in lower brackets. The brokerage also gives agents $500 each year toward a health savings account. Cushman’s vision plan covers new frames every year, while the dental offering includes a plan that’s highly affordable by not providing coverage for major and orthodontic services. The company also offers a 401(k) plan, flex spending, supplemental life insurance, supplemental long-term disability and a legal plan.
At ERG Property Advisors, a small firm with 15 agents, the brokerage offers health, dental and vision insurance “by broker option,” the firm stated in its survey. Meanwhile, Massey Knakal covers 50 percent of the cost for agents’ health and dental coverage.
HFF offers health, dental, vision and a 401(k) matching plan — and it throws in two weeks’ paid vacation to employees.
A sure sign of broker satisfaction can be found in how long employees stay at their jobs.
HFF said 75 percent of the senior brokers in its New York office have been with the company for more than a decade. Some 16 percent of the agents joined the firm in the past year.
By comparison, 13 percent of RKF’s agents joined in the last year, with 20 out of 54 agents in New York having been with the firm for more than five years.
At Eastern Consolidated, some agents have been with the company for 30 years, according to Paris. Eastern has a five-person management team that doesn’t handle transactions, but is available for daily, weekly and monthly coaching.
“The philosophy of Eastern is not about having a few big names,” said Paris. To that end, 63 percent of the firm’s 60 agents have been there more than five years. Eastern also employs five full-time analysts to put together materials on exclusives and analysis for potential clients, freeing up brokers’ time. “By committing resources to staffing and to appropriate research and information, that frees brokers to do what only they can do,” she said. The firm doesn’t operate from the top down, either. “We encourage brokers not only to make a name for themselves at Eastern, but also in the industry,” said Paris.
Commercial brokerages are deal-focused by nature, but that doesn’t mean they’re not collaborative.
At Marcus & Millichap, for example, brokers are encouraged to share information, research and market intelligence.
“We do not want our brokers working in silos,” Lee & Associates also noted in its submitted survey. “In fact, our recruiting efforts are geared toward ensuring that we have brokers who are not competing for the same clients.” Brokers are expected to become experts in either an industry or a geographical area. “While this limits our growth, it creates a strong collaborative office culture,” the survey said.
Likewise, at HFF, one broker described the work culture as “very entrepreneurial, allowing agents autonomy” while offering support when it is needed.
Not that it’s only work without play, as one agent from CPEX said.
“You can never be too sure when a Nerf gun battle will suddenly break out,” Christopher Burti, an associate in industrial sales and leasing, wrote in his survey. “You always have to be armed and ready.”