05.11.18
Bisnow: Why These Veteran CRE Professionals Look Outside The Industry For Their Most Successful Brokers
By Chuck Sudo, Bisnow
Essex Realty Group principal Jim Darrow didn’t always want to be in commercial real estate.
“I was a trader before I entered real estate,” Darrow said.
Even though Darrow’s father, uncle and both of his grandfathers were real estate professionals, he did his due diligence before transitioning to the field 25 years ago. What tipped the scales in favor of pursuing a real estate career was the realization he had advanced as far as he could as a trader, in spite of his efforts. Real estate offered him the chance to create his own opportunities and maximize his earnings potential, he said.
Today, Darrow draws from his own experience entering real estate when hiring new brokers, and actively seeks individuals looking to transition from other fields. Darrow isn’t alone. Bisnow interviewed several real estate executives about the intangibles they seek in new broker candidates. All of them have recruited brokers to the industry from other fields.
Diverse Professional Experiences Benefit Broker Teams
“The most successful brokers I’ve hired are people who have tried something else and realized the hard work necessary to be successful, but they can’t crack the glass ceiling in their profession because of limits in the market,” Kiser Group principal and Managing Broker Lee Kiser said.
Kiser Group’s broker team includes a former day trader, an engineering Ph.D., a former middle school social studies teacher and high school golf coach, a chartered financial analyst from JP Morgan and a commercial banker.
Darrow said Essex’s broker stable includes former bankers, accountants, auditors, salespeople and logistics personnel. First Western Properties President Paul Tsakiris said he found one of his most successful brokers selling cars.
CBRE Managing Director Jamie Georgas said looking outside the industry for broker candidates helps with diversity efforts. Georgas interviews hundreds of candidates a year, and has had success hiring people from outside real estate. She said some of the best brokers at the firm never even considered making the jump until she asked.
Georgas said what she seeks in a broker candidate has changed significantly over the past decade. Clients have become more sophisticated about the real estate they want to invest in, and handling them requires specific talents from brokers to satisfy their needs. Georgas has recruited successful brokers from state and local government, Wall Street wealth management and tech.
“A candidate must be dynamic, easy to work with, a super-hard worker, have an entrepreneurial spirit, and is engaging with communication who grabs my attention,” Georgas said.
Interra Realty Managing Partner Brad Feldman said he is personally drawn to candidates who have sales or athletic backgrounds, as it shows they have the discipline to learn the industry.
Kiser said each candidate he interviews has a different intangible. He looks for charisma, people skills, an analytical mind, confidence and intelligence. Sometimes a broker candidate will be interviewed two or three times after the initial round by different interviewers, and notes are compared to determine if the initial feeling about a candidate bears out.
Tsakiris said he looks for someone who is a natural salesman, with good analytical and writing skills. Today’s buyers are quantitative so a broker needs to be able to put together a quality offering memorandum.
“Someone will catch you if your ducks aren’t in a row,” Tsakiris said.
For New Brokers: Lean Times And Steep Learning Curves
Professionals making the transition to real estate shouldn’t expect to maximize their earnings potential while they establish themselves. Depending on the firm, the onboarding process can take months to years, and a new broker’s earning potential may be tied to a draw versus commission structure — or no draw at all — while learning a firm’s platform. Unsteady income during this time can test the mettle of a new broker.
Feldman said he finds brokers making the move from other industries have the discipline and experience to brush off the early struggles of establishing their business. “I always tell people to treat their entry into the industry like grad school: You won’t get paid initially but it will come,” Feldman said.
Kiser said his new brokers work on a straight commission basis during their first year, and advises them to have cash reserves in place while they establish their business. Kiser Group broker associates go through a 10-week onboarding process to learn basic skills like underwriting, product types, rents and exploring potential markets. Then the new brokers are paired with a mentor to gain experience in the details of the job, while learning how to use Kiser Group’s subscription systems and research tools to identify new markets, building client relationships and understanding how deals are structured. By the time a Kiser Group broker enters a second year at the firm, Kiser said everything should be in place for sustained success.
“If you do this consistently and correctly, you have a pipeline of business that can be sustainable and build your income,” Kiser said.
Georgas said new brokers at larger firms should expect to either be on a draw versus a commission, if not a straight commission, while they learn the ropes. At CBRE, the ramp-up process averages three years before a broker begins to earn serious commissions. A new hire is often paired with a peer who just completed the process the new broker is beginning, as well as senior executives who offer advice and mentoring. Georgas said CBRE is very thoughtful in its approach to ensuring new brokers have as many early opportunities to learn as possible.
Feldman said new brokers at Interra are shadowing experienced team members in the beginning, learning how to cold call, understanding the intricacies of building systems, learning market fundamentals and building their investor pools. “It’s hard to gauge the caliber of a new hire without aligning them with someone,” Feldman said.
Tsakiris said new broker candidates have to have an aptitude to learn, as well as the constitution to deal with an unsteady paycheck. First Western Properties positions new brokers for success by partnering them with an established broker to show them the ropes. New brokers are fed leads immediately, and Tsakiris said it is up to them to turn the leads into opportunities.
Most of all, these execs are looking for someone during interviews who asks questions. Kiser said it is hard to determine if a broker candidate will be successful after two or three interviews, or even months into their tenure. For Kiser, a candidate who asks the interviewers detailed questions indicates they understand the risks involved with entering the industry.
Georgas said a thorough, two-way interview process allows her to vet whether a candidate is a best fit for a broker position, or another role at CBRE.
“While a broker position may not be the best position, we see value in them, feel they are a great fit within our culture and business and what is a good fit outside of the brokerage perspective,” Georgas said.
