A big box’s real estate head retires, a venerable brokerage firm experiments with Google-ifying its own office layout, Blackstone still loves being a landlord, and lower Manhattan’s retail scene evolves. It’s all here in the Commercial Real Estate News Roundup for May 29, 2014.
- Brokers see benefit of auction process, NREI, May 20, 2014 – The online auctioning of commercial real estate doesn’t mean the broker’s role is irrelevant — far from it.
- Remaking the commercial real estate office, Sacramento Bee, May 27, 2014 – CBRE tests out a whole new millennial workplace layout philosophy.
- Maine’s real estate market expected to keep growing, Portland Press Herald, May 21, 2014 – Down east, the commercial real estate market is anything but down.
- Office rents cut at One World Trade, WSJ, May 27, 2014 – One WTC faces rent cuts while Larry Silverstein wants to get going on building the additional towers.
- Miami-Dade office vacancies fall, rents rise, Miami Herald, May 20, 2014 – Vacancies and unemployment are falling in Miami, and the seesaw means rents are on the rise.
- Retail’s online revolution boosting industrial real estate, Cincinnati Enquirer, May 24, 2014 – Withonline sales predicted to hit nearly $300 billion this year, logistics and warehousing are making hot markets out of out-of-the-way regions.
- Anne Arundel warehouse occupied by Under Armour sells for $26.5 million, Baltimore Sun, May 23, 2014 – Meanwhile in Baltimore, a $27M warehouse deal goes down.
- San Leandro warehouse deal reflects industrial market frenzy, San Francisco Business Journal, May 22, 2014 – Proving the old maxim that if you need space for people, space for stuff follows, San Francisco isn’t locked out of the industrial property groundswell.
- Target real estate chief to retire, Star-Tribune, May 21, 2014 – The executive shakeup at Target continues as John Griffith heads for the door.
- Retail real estate roars back, Minneapolis Star-Tribune, May 22, 2014 – With regional malls leading the way, Minnesota’s commercial property fortunes are looking bright.
- Lower Manhattan will undergo a retail revival, NYT, May 20, 2014 – Shopping below Chambers street is settling into a fully 21st-century pattern of growth – but will brokerage turf wars get in the way?
- As rents go sky-high, so do multifamily sales prices, SFGate, May 23, 2014 – Don’t look at the median apartment rent figure for San Francisco until you’ve fully swallowed your coffee.
- Cities need to adapt as senior citizens’ housing needs change, Washington Post, May 23, 2014 – Where does zoning fit into the greying of the United States?
- Blackstone hunts for apartments in latest rental foray, BusinessWeek, May 22, 2014 – The largest single landlord of single-family houses makes an(other) apartment building play.
We are proud to announce Leil Koch, CCIM, CIPS, CPM, CRB and Steve Moreria CCIM, CIPS, GREEN were recently inducted into the RPAC Hall of Fame during a ceremony at the 2014 REALTORS® Party Conference and Trade Expo. Leil serves as NAR’s Commercial Committee Chair and is President of Equity One Real Estate, Inc. in Maui, HI. Steven is NAR’s Commercial Committee Vice Chair and is President of Magic Properties in Longwood, Fl. Both. Both men have been relentless advocates on behalf of commercial members since taking on NAR leadership roles.
The Hall of Fame recognizes dedicated members who have made a significant commitment to RPAC (REALTOR® Political Action Committee) over the years. Commercial practitioners benefit from RPAC’s legislative actions and its support of Pro-REALTOR® candidates across the United States. Congratulations Leil and Steve we applaud your leadership and support of NAR and the REALTOR® Party!
Learn more about or contribute to RPAC by visiting www.realtoractioncenter.com
The NAR Commercial Forecast is out, and the news is good. With multifamily leading the pack, all sectors of commercial real estate have seen improvement in growth, lending and starts. The NAR news release reads:
The outlook for all of the major commercial real estate sectors is slightly improving despite disappointing economic growth during the first quarter of 2014, according to the National Association of Realtors® quarterly commercial real estate forecast.
Lawrence Yun, NAR chief economist, said the sluggish growth experienced in the first quarter is not indicative of the actual health of the economy. “Gross Domestic Product should expand closer to 3 percent for the remainder of the year. The improved lending for commercial loans and continuing job gains we’ve seen this spring bode well for modest progress in commercial real estate leases and purchases of properties.”
However, Yun cautions that with rising long-term interest rates on the horizon, consistent economic growth is imperative to solid commercial real estate investment in the years ahead.
National vacancy rates in the office market are forecast to decline 0.2 percentage point over the coming year, while international trade gains continue to boost use for industrial space, which forecasts a decline of 0.3 point. The outlook for personal income and consumer spending is favorable for the retail market, likely leading to a vacancy decline of 0.2 percent.
“The multifamily sector continues to be the top-performer in commercial real estate with the lowest vacancy rates. However, tight availability – despite new construction – is causing rents to currently rise near 4 percent annually in many markets,” said Yun. “Many renters who are getting squeezed may begin to view homeownership as a more favorable, long-term option.”
NAR reported earlier this month in its annual Commercial Member Profile that despite subpar economic expansion, Realtors® who practice commercial real estate saw an increase in sales transaction volume and medium gross annual income in 2013.
NAR’s latest Commercial Real Estate Outlook1 offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS Inc., a source of commercial real estate performance information.
Office vacancy rates should decline from an expected 15.8 percent in the second quarter of this year to 15.6 percent in the second quarter of 2015.
Currently, the markets with the lowest office vacancy rates in the second quarter are New York City and Washington, D.C., at 9.4 percent; Little Rock, Ark., 11.5 percent; San Francisco, 12.6 percent; and New Orleans, at 12.8 percent.
Office rents are projected to increase 2.5 percent in 2014 and 3.2 percent next year. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 39.7 million square feet this year and 49.8 million in 2015.
Industrial vacancy rates are anticipated to fall from 9.0 percent in the second quarter to 8.7 percent in the second quarter of 2015.
The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 3.5 percent; Los Angeles, 3.9 percent; Miami and Seattle, 6.0 percent, and Palm Beach, Fla., at 6.5 percent.
Annual industrial rents should rise 2.4 percent this year and 2.6 percent in 2015. Net absorption of industrial space nationally is seen at 107.8 million square feet in 2014 and 107.1 million next year.
Vacancy rates in the retail market are expected to decline from 10.0 percent currently to 9.8 percent in the second quarter of 2015.
Presently, markets with the lowest retail vacancy rates include San Francisco, at 3.2 percent; Fairfield County, Conn., 3.8 percent; and San Jose, Calif., at 4.7 percent. Northern New Jersey; Long Island, N.Y.; and Orange County, Calif., all have a vacancy rate of 5.3 percent.
Average retail rents are forecast to rise 2.0 percent in 2014 and 2.3 percent next year. Net absorption of retail space is likely to total 11.5 million square feet this year and 19.6 million in 2015.
The apartment rental market – multifamily housing – should see vacancy rates edge up from 4.0 percent in the second quarter to 4.1 percent in the second quarter of 2015, with added supply helping to meet growing demand. Vacancy rates below 5 percent are generally considered a landlord’s market, with demand justifying higher rent.
Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.3 percent; Ventura County, Calif., 2.4 percent; and New York City; San Diego; Hartford, Conn.; Oakland-East Bay, Calif., and San Diego, at 2.5 percent each.
Average apartment rents are projected to rise 4.0 this year and in 2015. Multifamily net absorption is expected to total 221,400 units in 2014 and 173,100 next year.
The Commercial Real Estate Outlook is published by the NAR Research Division. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.
The NAR commercial community includes commercial members; commercial real estate boards; commercial committees, subcommittees and forums; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.
Approximately 70,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 283,000 members offer commercial real estate services as a secondary business.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1million members involved in all aspects of the residential and commercial real estate industries.
Between commercial real estate markets and Wall Street lies an unsteady relationship. New investment vehicles that are based upon commercial properties are created — some use the term “innovated” — by the street from time to time, with mixed results for the wider market. The unsteady relationship stems from a basic conflict. On one hand, Wall Street likes liquidity and abstraction, but on the other, commercial real estate just isn’t very liquid, and a commercially developed plot of land is anything but abstract.
The name for what Wall Street is doing when it “innovates” is financialization. How innovative any one example really proves we leave up to history to judge, but one thing that financialization always brings is liquidity to an asset class. And this is where the mixed results come in. The repackaging of commercial real estate bonds into mortgage-backed securities (CMBS) saw many billions worth of terrible outcomes in the last economic downturn, albeit nowhere near the amount of national damage that was done using similar packaging techniques on residential mortgages.
Enter The Building IPO (Almost)
Despite a splashy arrival, the latest commercial property innovation from Wall Street – with promises aplenty of capital liquidity – is having trouble getting off the ground.
In October of last year, trading technology maker Etre, LLC announced they had developed a new method for investing in individual real estate assets. Their system would allow a new trading model, where a shares in an individual property could be offered and traded.
In other words, Etre had devised a way to allow single buildings to enter the stock market just like companies undertaking public trading. The kickoff of trading in a building’s stock shares could now be conducted using the same frenzied, irrational psychology that marks a stock’s initial public offering (IPO).
At least that was the pitch.
Etre needed a property to pilot the idea, and signed a contract to acquire one: Washington DC’s 1201 Connecticut Ave., sometimes called the Longfellow Building. But the contract just expired without the deal being done, as WaPO’s Johnathan O’Connell reports:
It was supposed to be a first of its kind, an initial public offering for a single building.
But it didn’t pan out.
Etre Financial LLC, based in New York, had been attempting to create a way to give investors the chance to buy shares in specific buildings via the Nasdaq. Its test case was 1201 Connecticut Avenue, known as the Longfellow Building.
Etre inked a contract to purchase the building and hoped to launch an IPO this week, but the offering never took place and as of Friday, the contract to acquire the building has expired.
Paul Frischer, president and chief executive of Etre, said that because the idea was so new to investors, management didn’t have sufficient time to answer all of the questions raised about the idea in the time allotted by Securities and Exchange Commission rules.
“We just ran out of time,” Frischer said . “The truth is that everyone thinks it’s a cool idea. And we just didn’t have enough time in five days to talk about it.”
He said he still believes in the business model and that Etre will choose another building to acquire and bring to market. Now that more people understand the company’s idea and business model, he thinks it will be easier the second time around.
So What Problem Is Being Solved, Again?
While it’s probable that this concept isn’t going away and Etre may well get its building shares platform off the ground, one has to wonder what is the exact problem this innovation is here to solve.
The illiquidity of commercial real estate isn’t in and of itself a problem in a general sense. In fact, as an investment class, commercial property’s characteristics of “finance with a roof” is already serving a multi-trillion dollar need to produce returns on a real economy. Additionally, the existence of REITs has long allowed public trading of commercial property portfolios, so it’s not as if the trading floors are without commercial real estate plays.
In my more cynical moments, I see this effort to trade individual buildings not as any innovation in general capital allocation but as a quick way to extend the exuberance and ballyhoo of the IPO to the relatively staid and stable commercial property sector. It could be seen mainly as a way to tie the fortunes of notable buildings to the vagaries of equity traders and add to the ever-expanding pools of commission income the Street lives to pocket.
If making stockbrokers and underwriters not being rich enough was the problem, this sure looks like the solution.
Beleaguered retailer and mall anchor JCPenney’s CEO Myron Ullman may have stopped his company’s bleeding, but will it be mark the end of JCPenney as a brick and mortar brand?
In a recent summary at Motley Fool of JCP’s recent shareholder conference call, hints in the tea leaves about JCP’s future abound — and they don’t necessarily look great for the physical store side of the business. Andrew Marder writes:
J.C. Penney in the long run
Talking about J.C. Penney’s long-term plans, Ullman said during an earnings conference call that the retailer is “focused on refining [its] merchandizing and marketing strategies, in order to steadily grow sales and significantly improve gross margins.” This is where the rubber hits the road and investors find out if Ullman can make J.C. Penney into a new, better business.
The company’s biggest long-term problem is that J.C Penney is a mall-based company. As sales move increasingly online and mall traffic dries up, J.C. Penney needs to shift in order to keep itself afloat. The company’s current move is to push for more online sales. Ullman sees that: In the last quarter, online sales rose 25.7% compared to the same period in the previous year.
Ullman has worked to bring J.C. Penney’s online and physical stores more in line with each other. In November he said, “The success of JCP.com reflects the reintegration of store and online buying, planning, and allocation.” When he first came back to the company, Ullman said that there was “little synergy between stores and online” — a situation he’s worked to improve.
That seems like a sign that Ullman’s head and strategy are in the right place. This company still has a long way to go, but it’s clearly making the right moves. There are very few people who thought J.C. Penney could bounce back from the Johnson reign, and I wasn’t one of them. However, Ullman has convinced me that he knows what his customers need and that he can give it to them while still making money. I’m excited to see how his plan plays out.
Retail space professionals are reminded: losing an anchor can easily be a prelude to losing a whole ship.
Talent competitions break out at brokerage firms, Amazon’s newest same-day-delivery warehousing strategy, the mighty Silicon Valley stumbles at its retail task, and what value is lurking in your office’s kitchen? It’s all here in this week’s Commercial Real Estate News Roundup for May 22, 2014.
- As commercial real estate moves, so do the brokers, Crains Detroit, May 18, 2014 – As transaction numbers rise, the opportunities proliferate. Careers in commercial real estate are getting as hot as the market.
- Mobile internet is making the commercial real estate industry move, Commercial Observer, May 13, 2014 – Internet in your pocket doesn’t automatically mean a sea change in efficiency for your business — but it sure helps.
- How this tech startup is renovating the $12 trillion commercial real estate industry, Entrepreneur, May 14, 2014 – View The Space is shaking up the entire process of showing commercial space. How did they do it?
- Blackstone to sell Boston office buildings for $2.1 billion, NYT, May 18, 2014 – Dumping Beantown office towers acquired when Blackstone bought out Sam Zell in 2007, Blackstone keeps the office market on its toes.
- Looking for Austin office space? Here’s 2 million square feet to choose from, Austin Business Journal, May 15, 2014 – New office construction in Austin is up sharply over the previous ten years.
- Health trends spark more interest in medical office space, The Tennessean, May 12, 2014 – Adding to the interest in medical office space are myriad trends in health, as a sold-out BOMA conference on the topic demonstrates.
- Paltry office pantries give way to sleek social spaces, NYT, May 13, 2014 – At any party, all the best stuff happens in the kitchen. So what does it mean when an office recognizes and establishes kitchen space as its social center?
- In the Twin Cities, industrial real estate is a hot commodity, Minneapolis Star Tribune, May 14, 2014 – New construction starts in Minneapolis. Paul are reshaping what it means to expand business operations in the upper Midwest
- How Amazon’s new Bay Area warehouse plays into same-day delivery strategy, Silicon Valley Business Journal, May 14, 2014 – While we haven’t heard much about Amazon’s delivery-by-drone idea of a few months ago, the e-tailing giant isn’t giving up on same day delivery.
- Friend or foe? Amazon is both in Nashville’s commercial real estate business, Nashville Business Journal, May 13, 2014 – Mid-priced brick and mortar are Amazon’s natural prey, say retailing experts.
- Central Arkansas industrial vacancy rate drops, Arkansas Business, May 19, 2014 – Cleaning up the old barn, turning on the lights and getting business done again is the new trend for central Arkansas industrial stock.
- Traditional malls lose ground to shoppers’ vast alternatives, Pittsburgh Tribune, May 17, 2014 – The mainstream press begins to conceive of the traditional mall as a relic of the 20th century.
- Cupertino’s ghost mall, Vallco, may be best hope for a real downtown – despite vexing lawsuit, Silicon Valley Business Journal, May 19, 2014 – Some of the richest real estate in the country has a major retail problem on its hands called the Vallco Mall.
- Grocers, restaurants drive retail growth in the era of e-commerce, Baltimore Business Journal, May 14, 2014 – One-click shopping for groceries and sit-down meals still eludes the technology curve.
- 5 ways companies can leverage pop-up stores, Fortune, May 19, 2014 – Check out some innovative ways to work the hit-and-fade concept behind pop-up retailing
- Investing in multi-family buildings, REM online, May 12, 2014 – Need a primer on NOI and how it drives apartment leasing and management? Check out REM Online’s article.
- Developers see a future with fewer picket fences and more leases, 538Economics, May 16, 2014 – Apartments as share of new residential construction are on the serious climb, says the US Census.
- Apartment construction surges across the Southland amid rising rents, LATimes, May 16, 2014 – Attracted by escalating rents, LA and Orange County developers are getting serious about new apartment building starts.
- The realities of real estate: buying the farm, Capital Gazette, May 18, 2014 – Farm sales come with just as many considerations as other commercial real estate sectors have – learn about them from a pair of veteran brokers.
- Dominion Homes buys land in Liberty Township for 139-lot single family subdivision, Columbus Business First, May 19, 2014 – Meanwhile in Ohio, the line between land and suburbia gets blurrier.
(Photo credit: Wonderlane)
CCIM Institute members from around the country reported Increasing deal flow, rising property prices, and growing interest from serious buyers across all five major commercial real estate property sectors in the organization’s 1Q14 Quarterly Market Trends report, which features transactional and market data from members of the global affiliate of the National Association of Realtors®.
The rise in deal flow was greatest in the hospitality sector, with 80 percent of CCIM members reporting more transactions year over year in 1Q14, followed by retail (63 percent), industrial (60 percent), multifamily (58 percent), and office (55 percent).
With interest rates remaining favorable as 2014 progresses, the majority of CCIM members (56%) are optimistic that credit conditions will improve in the next 12 months, despite the 31% of CCIM members who reported improved credit availability in 1Q14.
Another positive indicator is the uptick in inquiries from potential buyers across all five property sectors. Approximately 62% of overall respondents reported increased buyer interest, while just 8% said they experienced an increase in clients wishing to sell assets during 1Q14.
Property prices continued to rise in several sectors, with 54% of members reporting price gains in the industrial sector, followed 51% who saw price gains in the multifamily sector. The office sector logged the smallest increase with just 39% of respondents reporting higher asset prices in their markets. In total, 45% of CCIM members said property prices rose across all five sectors YOY in 1Q14, while 31 percent reported flat prices.
The CCIM Institute surveys members on their market and transaction each quarter. Read the complete CCIM Institute 1Q14 QMT report at http://www.ccim.com/resources/first-quarter-2014-ccim-quarterly-market-trends and learn more about the CCIM Institute at www.ccim.com.
A DC building goes public, $3 billion in deals in Chicago’s first quarter of 2014, a car wash moves for many millions, and malls grasp for ballast. It’s all in this week’s Commercial Real Estate news roundup.
- Bay Area ranks as the best commercial real estate market in the country, again, Silicon Valley Business Journal, May 7, 2014 – SF pulls ahead of SV in the NoCal battle of commercial real estate markets.
- Commercial property sales jump 59 percent in first quarter, Crain’s Chicago Business, May 12, 2014 – Chicago’s 2014 kicked off with the best start to the year since 2008.
- 4 things that might choke Orlando’s real estate recovery, Orlando Business Journal, May 9, 2014 – Aren’t worried about what technology might do to your long term plans? Cap rate compression not bugging you? Maybe you should take another look.
- Downtown LA carwash owner cleans up in sale estimated at $25 million, LA Times, May 8, 2014 – Three decades of scrubbing and waxing come to an end with a giant payday in LA.
- Connecticut Ave. building may be first to have its own IPO, Washington Post, May 9, 2014 – Real estate securitized on Wall Street is news as old as REITs, but here’s a new wrinkle: buying stock in a single building.
- $200 million project will add two towers to Dallas’ Uptown, Dallas Morning News, May 8, 2014 – At the corner of Field and Cedar Springs, watch for a vertical growth spurt.
- Google to make biggest property purchase of year, paying as much as $250M for office park, Silicon Valley Business Journal, May 8, 2014 – $625 a sq. ft is impressive enough. Now imagine 400,000 square feet.
- REIT pays $7 million for Carlstadt warehouses, North Jersey, May 6, 2014 – When you buy warehouses, where do you store them? Often enough, in REITs.
- Large industrial project in north Houston to break ground, Houston Business Journal, May 12, 2014 - Trucking and Texas: together at last. (Okay, kidding about that one.)
- Time for retailers to re-evaluate their store footprint — one size does not fit all, Forbes, May 6, 2014 – Lifestyle categories are expanding floor space while durable goods retailers are shrinking. (Your market’s mileage may vary.)
- Struggling malls suffer when Sears, Penney leave, WSJ, May 12, 2014 – Ships without anchors drift: malls without anchors do the same.
- Construction boom may lead to lower rents, Houston Chronicle, May 6, 2014 – Supply and demand continue their eternal dance in Houston’s apartment market.
- Speculators hoping to convert corn to subdivisions, Crain’s Chicago Business, May 12, 2014
- Austin real estate professionals speak out on land code reform proposals, Austin Business Journal, May 9, 2014
The Real Estate Advantage (REAL 504) loan program is a key platform in the federal government’s business development role. Administered through the Small Business Administration (SBA), the REAL (504) loan is for small business to acquire real estate and equipment. While it’s not the only loan program the SBA offers — the full range of loan and grant programs can be seen here – the REAL (504) loan is a welcome topic at the real estate deal table when it’s time for a business to expand operations and acquire a larger footprint.
Representing SBA lenders and districts across the US is NADCO, the National Association of Development Companies. Spreading awareness of the loan programs among small business owners is a continual challenge. To get a wonderful illustration of how REAL (504) loans can work, check out a recent appearance by NADCO President Beth Solomon at a roundtable discussion and reception in Pueblo, Colorado.
Joe and Donna Ruzich didn’t celebrate alone at a reception Monday marking the opening of their Synergy Physical Therapy and Wellness center, a dream of Joe’s since he graduated college 15 years ago.
The guest list included several top advocates for Small Business Administration lending programs, including Beth Solomon, president of the National Association of Development Companies, which represents SBA districts and lenders across the nation.
As part of the event, Solomon, visiting Colorado from Washington, D.C., led a roundtable discussion at Synergy, 1080 Eagleridge Blvd., Unit G. The Ruziches qualified for a smaller down payment on a purchase-and-remodeling loan as part of the Real Estate Advantage (504) Loan program.
Calling the new center a “REAL (504) success story,” Solomon urged small businesses across Southern Colorado to look into the program and other government-sponsored initiatives such as Small Business Development Centers.
“We’re here to get these loans into the community,” she said.
Read the entire Dennis Darrow article that originally ran in the Pueblo Chieftan here.
(Photo Credit: The Georgetown Dish)
Someone once famously said “Predictions are difficult, especially when they concern the future.” So it’s a good thing that we can look at the recent past to get a far more reliable measure of the world. The good news is the commercial real estate world as reflected in the most recent NAR Commercial Member Profile is looking terrific.
Realtors® Report Positive Outlook in Commercial Market with Increases in Sales Volume, Income
Realtors® who practice commercial real estate reported an increase in sales transaction volume and medium gross annual income last year, according to the 2014 National Association of Realtors® Commercial Member Profile.
NAR commercial members who were surveyed conduct all or part of their activity in commercial sales, leasing, brokerage and development for land, office and industrial space, multifamily, and retail buildings, as well as property management. The survey shows that even with challenges in the market, commercial members saw a rise in median sales transaction volume to $2,554,700, up nearly $50,000 from 2012.
“Despite a government shutdown, regulatory changes and a budget sequestration, ongoing job creation has helped the commercial market make continued progress,” said NAR President Steve Brown, co-owner of Irongate Inc. Realtors® in Dayton, Ohio. “Realtors® who practice commercial real estate help build our nation’s communities by helping their clients make informed business decisions and reliable commercial investments that support economic growth. A stronger commercial market is a good indicator of a recovering and growing economy.”
Commercial members completed a median of eight transactions in 2013, equal to the previous year. Nine percent of commercial members reported not having a transaction in 2013, also the same as 2012. Brokers typically had a greater sales transaction volume than sales agents.
Seventy-six percent of commercial members reported having a leasing transaction; their median transaction leasing volume in 2013 was $431,600. Twenty-nine percent of members cited investment sales as their primary business specialty, making it the most popular area of concentration. Land sales and office leasing were reported as the second and third most popular primary commercial specialties.
Realtors® reported an increase in annual gross income for the fourth year in a row. The study found median annual gross income for 2013 was $96,200, an increase from $90,200 in 2012; that is the highest reported level since 2008.
Commercial members who manage properties typically managed 60,000 total square feet, representing twenty total spaces. Those who manage offices typically managed 25,000 total office square feet, representing eight total offices.
Twenty-eight percent of commercial members were involved in international transactions in 2013. Sixteen percent of commercial members reported an increase in international transactions, while only 1 percent had a decrease. Nearly one-fourth of commercial members reported international business is important to their company.
The typical commercial NAR member has been in real estate for 25 years, in commercial real estate for 15 years and a member of NAR for 18 years. Eighty percent of members reported working at least 40 hours a week, with about half stating that they spend 75 to 100 percent of their time on commercial real estate activity.
Commercial members are predominately male with a median age of 59. However, women are slowly becoming a stronger presence in the industry; 35 percent of those with two or fewer years’ experience are female, up from 33 percent last year, and sales agents have the largest representation of female practitioners with 29 percent.
The 2014 NAR Commercial Member Profile was based on a survey of 2,213 members. Income and transaction data are for 2013, while other data represent member characteristics in 2014. Approximately 70,000 commercial real estate professionals are members of NAR, making it the largest commercial organization in the industry.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.