Are you interested in exploring new markets and opportunities this year? If so, commercial real estate (CRE) may have come up on your radar.
It can require additional education to successfully break into commercial from residential. But even if you’re not looking to switch, keeping up with niches like CRE can improve your career development and industry knowledge.
So what does the future of the CRE market look like? How does commercial real estate differ from residential?
Market Outlook: Short-Term Hiccups, Long-Term Opportunity
Commercial real estate demand is expected to see a similar slump as the residential market this year. Factors like rising rates and economic uncertainty also apply to commercial property demand. The continued decline of in-store shopping is also expected to hinder demand for retail spaces.
The long-term outlook looks potentially promising: The U.S. is expected to see a resurgence of manufacturing as more companies opt for domestic suppliers. This would also likely create more demand for storage facilities and distribution centers.
Client Expectations: You Better Mean Business
Whereas residential agents can typically assume a mortgage broker handles the financial details, commercial agents can expect to research, analyze and crunch numbers with clients. In addition, they need to have a sufficient working knowledge of accounting, business management and more.
Residential clients want to envision their future and seek an agent who is emotionally invested in their journey. Commercial clients are more business-minded — they are interested in the long-term financial outlook of a transaction and want an agent who is mentally invested in their goals.
Earnings: Fewer Sales, Higher Prices
Commercial and residential commission rates are comparable, but commercial properties are typically priced much higher. That being said, commercial deals can take considerably longer to acquire and close, resulting in fewer deals within the same timeframe.
Where do you want to take your career this year? Reach out when you’re ready to discuss your opportunities.