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NAR: If You're Not Making Money in This Market You're Doing it Wrong

NAR Reports Boost in Commercial Real Estate Members' Earnings, Sales
August 3, 2017
A recent survey by the National Association of Realtors of its commercial property members confirmed that the past several years have been very good to be in real estate.

NAR members engaged in commercial real estate activity reported an 11% increase in their gross annual income and a 19% boost in median sales volume in 2016 from the prior year.

NAR's 2017 Commercial Member Profile, which includes brokers, sales agents, appraisers and property managers, showed a median gross annual income of $120,800 last year, up from $108,800 in 2015. The group represents 1.2 million members involved in all aspects of the real estate industry. However, the group sent its commercial profile online survey to just 64,147 members professing an interest in CRE. The survey conducted during June received 1,926 responses.

The association sees an uptick in members choosing to specialize in commercial real estate at the same time as commercial professionals report improvements in the market and their own business activity, said NAR President William E. Brown, an Alamo, CA-based member.

"A stronger commercial market is a good indicator of a growing economy, so the outlook is positive for commercial members in the year ahead," Brown said in a statement.

Among commercial NAR licensees, brokers and appraisers tended to report the highest annual incomes while sales agents reported the lowest incomes.

Incomes among commercial members diverged widely based on experience. Members with less than two years in the industry reported a median annual income of $31,500 in 2016, down from $43,400 in 2015, while those with more than 26 years of experience reported a median income of $162,200 in 2016, down from $165,400 in 2015.

Median sales transaction volume among members who had at least one commercial transaction was $3.5 million, an increase from $2.93 million in 2015.
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The annual study represents members of NAR who conduct at least a part of their business in CRE sales, leasing, brokerage and development for land, office and industrial space, multifamily and retail buildings, as well as commercial property management.

Commercial members completed a median average of eight sales transactions in 2016, a slight decrease from the prior year. A quarter of commercial members reported having one to four transactions, and 27% reported having more than 20 transactions.

The median years of experience in real estate increased to 24 years in 2017, up from 20 years in 2016, as did the median years of experience of members in commercial real estate - up from 15 years in 2016 to 19 years in 2017.

Among NAR’s commercial members, 47% are brokers and 30% are licensed sales agents, consistent with last year, while 17% have a broker-associate license. Appraisal license holders accounted for 5%, also roughly the same as last year.

In other NAR profile findings:

  • The median age of all commercial members is 60 and almost 75% are male, identical to last year’s results. Men reported being active in any real estate capacity for a median average of 25 years and in CRE for of 20 years, the same as 2015. Women have been active in real estate for a median of 19 years, up from 14 years last year, and in the CRE market for 15 years, up from 11 years in last year's report.

  • Commercial members who manage properties typically managed 82,000 total square feet, representing 15 total spaces, up from 50,000 square feet and 17 spaces in 2015. Those who manage offices typically managed 25,000 square feet representing seven total office properties, up from 20,000 square feet of office and five properties last year.

  • About one-third of commercial members were involved in foreign transactions in 2016, down 2% from 2015. Eighteen percent of commercial members reported an increase in cross-border transactions.
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