Commercial Brokers & Property Managers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 143,000 commercial real estate brokers in the US help clients purchase, sell, and lease commercial real estate by acting as middlemen between buyers and sellers. Commercial real estate (CRE) is property that is used for income-generating and/or price-appreciation purposes. A broker may be an independent agent, serve as an employer of commercial real estate agents, or work as part of a CRE brokerage company.
Rising Interest Rates
CRE transactions typically involve third-party financing, so when interest rates rise, investors are forced to pay more to borrow money.
Shifting Demand for Commercial Space
Technology and COVID created fundamental shifts in demand for commercial real estate.
Industry size & Structure
The typical real estate office that employs brokers and/or agents operates out of a single location, generates about $1 million annually, and employs about 3 workers.
- The total real estate agent/broker industry, which includes residential and commercial offices, consists of over 143,000 firms that generate over $170 billion and employ over 406,000 workers.
- The real estate agent/broker industry is fragmented. The top 50 firms account for less than 30% of revenue, and many agents/brokers work as independent contractors. About 40,000 commercial and residential brokers either operate out of a real estate office or work for a real estate firm.
- Over 80% of total US commercial property transactions are in the $1 million to $10 million range, according to Marcus & Millichap. The National Association of Realtors has approximately 80,000 members that operate in the “small” commercial real estate market, which consists of transactions that involve less than $2.5 million. The US commercial real estate (CRE) market was valued at $22.5 trillion in 2023, according to the Federal Reserve.
- According to a National Association of Realtors (NAR) commercial membership survey, the typical CRE agent has 25 years of real estate experience and 20 years of CRE experience. Within the NAR CRE membership, 51% worked in sales and 49% were brokers. Almost half of agents owned commercial real estate personally.
- Large firms with CRE brokerage operations include CBRE, JLL, Cushman & Wakefield, and Marcus & Millichap. Large firms often have global operations.
Industry Forecast
Commercial Brokers & Property Managers Industry Growth
Recent Developments
Feb 18, 2025 - Investment Returning to US Office Sector
- Some investors are warming up to US office real estate after souring on the market for five years, according to The Wall Street Journal. Buyers are scooping up properties with high vacancies for bargain prices, and others are buying premium properties saddled with high debt. Investors are also purchasing older properties to convert them into apartments. According to data firm MSCI, office building sales volumes rose 20% in 2024, reaching $63.6 billion. However, 2024 activity is still well below the average annual volume of $142.9 billion from 2015 to 2019. Industry watchers suggest that leasing activity is picking up as more companies require workers to be in the office. While the office market is showing signs of improvement, it still faces high vacancy rates and loan delinquencies, leading many investors to prefer other real estate types, such as warehouses and apartments.
- The industrial real estate market continues to undergo significant change as demand downshifts compared to the frenzy for industrial space during the pandemic, according to CommercialEdge. In 2022 and 2023, more than 1.1 billion square feet of industrial space came online. In 2024, only 358 million square feet were added. While that is a significant drop from the pandemic-era boom, it was still high compared to historical norms. Construction starts for industrial properties slowed to 236 million square feet in 2024, and the downward trend is projected to continue in 2025. The market is shifting in other ways, as demand moves from warehousing and distribution hubs to manufacturing facilities and data centers.
- In the wake of the pandemic, open-air shopping centers are having a moment, according to The Wall Street Journal. As demand has swung back to in-person shopping, neighborhood shopping centers have been fuller than ecommerce warehouses, according to CBRE. The most desirable retail spaces are those anchored by grocery stores, as grocery store foot traffic was 12% higher in the third quarter of 2024 than during the same period in 2019, according to Globe Street. The types of establishments filling the space adjacent to grocery are ones that face little threat from online retail, such as nail salons, medical centers, yoga studios, and coffee shops. Flexible work arrangements have led to more traffic for neighborhood shopping centers.
- Even with a nationwide glut of office space, there’s still a shortage of the high-quality space that some firms want to lease, according to The Wall Street Journal. At the end of 2024, the national office vacancy rate was more than 20%, according to Moody’s. However, many business districts lack enough top-tier space with amenities like proximity to transit hubs, high-end fitness centers, outdoor spaces, and nearby restaurants. High-quality office space is in higher demand as growth sectors such as technology, transportation, entertainment, and finance call on employees to spend more time in the office and hope to lure them with upscale perks and experiences. In the third quarter of 2024, occupancy in top-tier office properties was 22% higher than at the same time in 2019, according to CBRE. Over the same period, occupancy for all other types of office space fell 5%.
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