NAr Ea

CCA 101
INTRODUCTIONTOCOMMERCIAL
REALESTATEBROKERAGE
 2

Kennet h T. Hol man

Kenneth T. Holm an founded the National Association of Real Estate Advisor s (NAREA) in 2012. NAREA
is an association that educates r eal estate pr ofessionals in all aspects of the r eal estate business fr om
r esidential r eal estate to com m er cial r eal estate to investing in r eal estate.
M r. Holm an is also pr esident of Over land Gr oup, Inc., a m ulti-faceted r eal estate or ganization that
pr ovides, thr ough its individually ow ned and oper ated com panies, br oker age, constr uction,
developm ent, financing, pr oper ty m anagem ent, and r eal estate investm ent consulting to its clients for
both com m er cial and r esidential pr oper ties. For m or e than 30 year s, M r. Holm an has had extensive
exper ience in the r eal estate industr y, pr im ar ily in the ar eas of single fam ily and m ultifam ily
r esidential, lodging, industr ial, office, and fr ee-standing r etail pr oper ties.
M r. Holm an has r eceived sever al licenses, designations, and aw ar ds thr oughout his car eer. He holds
thr ee licenses: a r eal estate br oker 's license, a gener al contr actor 's license, and a m or tgage loan
or iginator 's license thr ough the National M or tgage Licensing System (NM LS). He is affiliated w ith the
follow ing or ganizations: the National Association of REALTORS (NAR), the CCIM Institute, and the
Institute of Real Estate M anagem ent (IREM ). He holds both the CCIM (Cer tified Com m er cial Investm ent
M em ber ) and the CPM (Cer tified Pr oper ty M anager ) designations.
M r. Holm an holds a bachelor of science degr ee in Accounting fr om Br igham Young Univer sity
M ar r iott School of M anagem ent and a M aster of Business Adm inistr ation (M BA) degr ee fr om the
Univer sity of Utah David Eccles School of Business. He is the past-pr esident of the Utah Apar tm ent
Association and has been a m em ber of the Center ville City Council, a m em ber of the David School
Distr ict Foundation Boar d, and a founding m em ber of the Center ville-Far m ington Rotar y Club.
M r. Holm an can be r eached at 801.931.5571 or at ken@nar eagr oup.or g
3

About NAREA

NAREA M i ssi on St at em en t
The National Association of Real Estate Advisor s (NAREA) is com m itted to excellence in r eal estate
education. Thr ough our designation pr ogr am s, w e str ive to assist each r eal estate pr ofessional to
becom e an exper t in the field of r eal estate to those w ith w hom they give advice and counsel.
NAREA Desi gn at i on Pr ogr am s
NAREA offer s tw o designation pr ogr am s:
- Cer tified Com m er cial Advisor (CCA)
- Real Estate Investm ent Advisor (REIA)
A Cer t i f i ed Com m er ci al Adv i sor (CCA) is a r eal estate pr ofessional w ho has dem onstr ated the ability
to br oker com m er cial r eal estate.
The Cer tified Com m er cial Advisor (CCA) pr ogr am is a ser ies of classes designed to instr uct r eal estate
pr ofessionals in all aspects of com m er cial br oker age. To achieve the CCA designation, a licensed r eal
estate pr ofessional m ust becom e a CCA Candidate and com plete and pass, w ith seventy per cent
com pr ehension, a ser ies of 12, 3-hour r equir ed cour ses.
In addition, the CCA Candidate m ust dem onstr ate that they have com pleted thr ee com m er cial
tr ansactions w ithin a 12-m onth per iod pr ior to r eceiving the designation. In the event a CCA Candidate
does not m eet the r equisite exper ience r equir em ent, pr ior to becom ing a CCA M em ber , they m ay take
four additional 3-hour elective cour ses in any one of seven specific com m er cial pr oper ty categor ies
including, land developm ent, m ultifam ily, r etail, lodging, office, industr ial, or investm ent pr oper ties.
A Real Est at e I n vest m en t Adv i sor (REI A) is a r eal estate pr ofessional w ho advises clients about
investing capital in r esidential and com m er cial r eal pr oper ty w ith the expectation of achieving a
pr ofit r etur n thr ough cash flow , debt r eduction, and appr eciation in value.
The Real Estate Investm ent Advisor (REIA) pr ogr am is a ser ies of thr ee advanced classes designed to
instr uct r eal estate pr ofessionals in var ious aspects of r eal estate investing. To achieve the REIA
designation, a licensed r eal estate pr ofessional m ust becom e an REIA Candidate and com plete and
pass, w ith seventy per cent com pr ehension, a ser ies of 3, 8-hour cour ses in the follow ing categor ies:
Residential Real Estate Investing, Com m er cial Real Estate Investing, and Investing in Real Estate Using
Self-Dir ected Retir em ent Accounts.
In addition, an REIA Candidate, pr ior to becom ing an REIA M em ber , m ust com plete a dem onstr ation
case study show ing they ar e pr oficient in financial and investm ent analysis.
 4

Nat ional Associat ion of Real Est at e Advisors (NAREA)

Cert if ied Commercial Advisor (CCA) Designat ion Program
 5

Tabl e of Cont ent s

Section 1: Intr oduction to Com m er cial Real Estate Br oker age........................................................................ page 7
Section 2: Types of Com m er cial Real Estate..................................................................................................... page 11
Section 3: Establishing a Car eer in Com m er cial Real Estate Br oker age......................................................... page 21
Section 4: Tools of the Tr ade for Com m er cial Real Estate Agents................................................................... page 27
Section 5: Com pensation for Com m er cial Real Estate Agents......................................................................... page 33
Section 6: Advantages of Com m er cial Real Estate Br oker age.......................................................................... page 37
Section 7: Panel Discussion w ith Top Com m er cial Realtor s............................................................................ page 39
 6

NOTES:
7 NAREA | Introduction to Commercial Real Estate Brokerage

SECTIONONE:
Intr oduction to Com m er cial Real Estate Br oker age

THEHOURSAREBETTER
WITHLESSWEEKNIGHT Int roduct ion t o Commercial Brokerage
ANDWEEKENDWORK Com m er cial r eal estate is consider ed to be any r eal estate used for
ANDTHEPAYIS com m er ce. In com m er cial r eal estate br oker age, an agent has the
BETTER. oppor tunity to w or k w ith business ow ner s and pr ofessional investor s
r ather than w or k pr im ar ily w ith hom eow ner s. In m any cases, the hour s
ar e better w ith less w eek night and w eekend w or k and the pay is better.

Comparing Resident ial and Commercial Real Est at e

Going fr om a r esidential agent to a com m er cial agent is not an easy

tr ansition. The tw o occupations ar e w or lds apar t. Com m er cial r eal estate
br oker age is like playing Chess w hile r esidential r eal estate br oker age is
like playing Checker s. Both gam es ar e played using the sam e 64-squar e
r ed-and-black boar d, but the gam es a ver y differ ent. Checker s is pr etty
m uch a tw o-dim ensional gam e. Chess, on the other hand, is a m or e
thr ee-dim ensional gam e.

Commercial Real Est at e Brokerage is More

Compl icat ed, but More Fun
Com m er cial r eal estate br oker age is m uch m or e com plicated than
r esidential br oker age. Ther e ar e num er ous types of pr oper ties and each
pr oper ty type is differ ent fr om ever y other pr oper ty type. M any
com m er cial sales people specialize in one specific type of pr oper ty. W hen
listing, selling or leasing com m er cial pr oper ty, the buyer s and the seller s
ar e ver y differ ent. They have differ ent m otivations. Ever y pr oper ty type
r equir es a cer tain level of exper tise. Ver y few of the for m s ar e
standar dized.

Commercial Real Est at e Invol ves "Commerce"

Com m er cial r eal estate br oker age involves ?com m er ce.? It involves a lot of
num ber cr unching. It is all about business. Although ther e m ay be som e
level of em otion involved, for the m ost par t, it is all about business.
Lender s and appr aiser s tr eat each pr oper ty as its ow n entity. The incom e
str eam and the oper ating expenses ar e differ ent. The num ber s becom e
ver y im por tant because it r elates to r etur n on investm ent r ather than
per sonal pr efer ence.
 Int roduct ion t o Commercial Real Est at e Brokerage 8

There is Lit t l e St andardizat ion in t he Indust ry

Ther e is little standar dization in the industr y. Ever ybody is ver y

pr ofessional and business-like. It is difficult to fool anybody, if you don?t
know w hat you?r e doing. It r equir es a high level of exper tise and
involves m uch less w or k dur ing the evenings and w eekends.
Com m er cial r eal estate br oker age is usually handled dur ing r egular
business hour s.

Commercial Real Est at e Prof essional s View

Themsel ves as Superior t o t heir Resident ial
Col l eagues
Oftentim es com m er cial r eal estate pr ofessionals view them selves as COMMERCIALREALESTATE
super ior to their r esidential colleagues because they have achieved a PROFESSIONALSHAVETHE
cer tain level of exper tise. Don?t be concer ned about w hether or not you OPPORTUNITYTOEARNA
can acquir e the skills to becom e a com m er cial r eal estate pr ofessional. COMMISSIONIFTHEY
Just like r esidential r eal estate br oker age, it is a skill set that can be LISTORSELLAPROPERTY.
lear ned.

Commercial Real Est at e Brokerage Invol ves Not

Onl y List ing and Sel l ing Real Est at e, but al so
Leasing Propert y t o Commercial Tenant s
Com m er cial r eal estate br oker age involves not only listing and selling
r eal estate but often involves leasing pr oper ty to com m er cial tenants.
Both ar eas of focus can be ver y lucr ative. The business ow ner or lessee
or leases the space pays a fee to the ow ner or lessor of the pr oper ty.
Com m er cial r eal estate pr ofessionals have the oppor tunity to ear n a
com m ission if they list or sell a pr oper ty. They also have the
oppor tunity to ear n a com m ission if they lease a pr oper ty.

Al most Any Avenue You Pursue as a Commercial

Real Est at e Prof essional Can Be Very Rewarding

Alm ost any avenue you pur sue as a com m er cial r eal estate pr ofessional
w ill be ver y r ew ar ding, if you follow the pathw ay that leads to success.
Hopefully, this cour se w ill help you begin your jour ney. Regar dless of
w hether intend to pur sue a car eer in com m er cial r eal estate br oker age
as a full tim e occupation or w ould like to acquir e the know ledge of
com m er cial r eal estate br oker age to supplem ent your r esidential r eal
estate car eer , the know ledge you acquir e about com m er cial r eal estate
w ill m ake you a better r eal estate pr ofessional.
9 NAREA | Introduction to Commercial Real Estate Brokerage

Quiz
1. Com m er cial r eal estate br oker age is gener ally m or e com plicated than r esidential br oker age.
a. Tr ue
b. False
2. Com m er cial r eal estate involves all of the follow ing except:
a. Com m er ce
b. Num ber cr unching
c. Retur n on investm ent
d. Hom e financing
3. Com m er cial r eal estate is a highly standar dized industr y.
a. Tr ue
b. False
4. Com m er cial r eal estate br oker age is a skill set that can be lear ned.
a. Tr ue
b. False
5. You need a college degr ee to be a com m er cial r eal estate agent.
a. Tr ue
b. False
6. M ost com m er cial r eal estate agents ar e m em ber s of the National Association of Realtor s.
a. Tr ue
b. False
Int roduct ion t o Commercial Real Est at e Brokerage 10

NOTES:
11 NAREA | Introduction to Commercial Real Estate Brokerage

SECTIONTWO:
Types of Com m er cial Real Estate

Com m er cial r eal estate cover s a diver se gr oup of pr oper ty types and uses, as w ell as vacant land. A useful
categor ization of com m er cial pr oper ty includes all incom e-pr oducing r eal estate investm ents, together
w ith their sub-categor ies, w hich includes: office; m ulti-fam ily housing (apar tm ents, m obile hom e par ks);
specialty r eal estate, office buildings, r etail center s, industr ial pr oper ties, lodging and hospitality
pr oper ties, m edical facilities, and specialty pr ojects such as m ini-w ar ehouses and other specific-pur pose
pr oper ties.

Types of Commercial Propert y

Of f i ce

Office Buildings. Office buildings ar e classified by location, ur ban or subur ban, by height, high-r ise,
m id-r ise, and low -r ise, and by quality, class A, B, or C. M ost high-r ise (25 to 50 stor ies or levels) and m id-r ise
(8 to 25 stor ies or levels) ar e located in ur ban, dow ntow n, ar eas. Low -r ise office buildings (few er than 8
stor ies or levels) ar e gener ally seen in subur ban locations.
Class A office pr oper ties ar e new er , top quality pr ojects w ith state-of-the-ar t facilities. They appeal to
high-pr ofile tenants and com m and top r ental r ates. Class B office pr oper ties m ay be older but still
com m and a high level of quality. They appeal to m or e pr ice-conscious tenants w ho w ant good quality but is
not w illing to pay top r ental r ates. Class C office pr oper ties ar e usually located in subur ban ar eas and have
few fr ills. They appeal to tenants w ho w ant functionality and low er r ental r ates.
 Types of Commercial Real Est at e 12

M u l t i -Fam i l y Resi den t i al

Apa r tments a nd M ultifa mily Housing. Gener ally, apar tm ents w ith few er than five units ar e consider ed
to be r esidential pr oper ty r ather than com m er cial pr oper ty. Although five units is consider ed by m any as
an entr y-level apar tm ent or m ultifam ily pr oject, these pr oper ties tend to be m uch lar ger w ith hundr eds of
units in the sam e pr oject. M ultifam ily housing m ay be tenant-occupied (as in apar tm ent pr ojects),
ow ner -occupied (as in a condom inium or cooper ative pr oject), or m ixed (w ith tenants and ow ner s living
in differ ent units w ithin the sam e pr oject).
M obile Home Pa r ks. M obile hom e par ks ar e platted subdivisions w ith sever al plots that include utility
hookups, par king spaces, r oads, and in som e cases, am enities such as a sw im m ing pool and clubhouse.
They ar e leased to m obile hom e ow ner s. M obile hom es ar e pr efabr icated hom es built in a factor y and sold
to an individual user. They ar e usually placed in one location w ithin the m obile hom e par k and left
sem i-per m anently until m oved to a new location.
M ixed Use Developments. A m ixed-use developm ent is any r eal estate developm ent that blends a
com bination of r esidential, r etail, com m er cial, cultur al, institutional, or industr ial uses w her e the
functions ar e physically and functionally integr ated. M any m ixed-use developm ents pr ovide pedestr ian
connections to w alking paths and public tr anspor tation.
Ret ai l

Retail businesses sell finished goods and ser vices in exchange for m oney. Accor ding to the U.S. Census
Bur eau, total m onthly r etail sales in the United States aver ages about $350 billion. Retail businesses
include ever ything fr om lar ge shopping center s to m id-sized depar tm ent and gr ocer y stor es to sm all dr ug
stor es, and convenient stor es. Ser vice r elated businesses such as beauty salons, tanning salons, and r ental
center s ar e also consider ed r etail businesses. Restaur ants, on the other hand, ar e consider ed m or e of a
specialty use and fall into a categor y all their ow n.
13 NAREA | Introduction to Commercial Real Estate Brokerage

Sh oppi n g Cen t er s
Shopping Center s. The Inter national Council of Shopping Center s (ICSC)
defines a shopping center as a gr oup of r etail and other com m er cial
establishm ents that is planned, ow ned and m anaged as a single pr oper ty,
typically w ith on-site par king pr ovided. The center ?s size and or ientation ar e
gener ally deter m ined by the m ar ket char acter istics of the tr ade ar ea ser ved
by the center. Shopping center s include r egional shopping center s,
neighbor hood shopping center s, and str ip shopping center s.
TOTALMONTHLYRETAILSALES
Regiona l Shopping Center . A r egional shopping center is a lar ge r etail
INTHEUNITEDSTATES shopping com plex of 300,000 to 900,000 squar e feet, including one or tw o
AVERAGESABOUT$350 full-line anchor depar tm ent stor es. Regional shopping center s typically dr aw
BILLION,ACCORDINGTO custom er s fr om a r adius of 40 to 50 m iles. A r egional shopping center
THEUSCENSUSBUREAU. r equir es a m inim um population of 150,000 or m or e for suppor t.
Neighbor hood Shopping Center . A neighbor hood shopping center is a
collection of r etail stor es w ith a com m on par king ar ea and gener ally one or
m or e lar ge depar tm ent, discount, or food stor es. Som etim es these center s
include an enclosed m all or w alkw ay. A neighbor hood shopping center
gener ally r equir es a m inim um population of 5,000 to 40,000 for suppor t,
depending on size.
Str ip Shopping Center . A str ip shopping center is an attached r ow of stor es
or ser vice outlets w ith on-site par king usually located in fr ont of the stor es.
Open canopies connect the stor efr onts, but a str ip center does not have
enclosed w alkw ays linking the stor es. A str ip center m ay be configur ed in a
str aight line or have an ?L? or ?U? shape. It is the sm allest of a collection of
r etail stor es.
Ot h er Ret ai l
Reta il Stor es. Retail businesses sell finished goods and ser vices in
exchange for m oney. Total m onthly r etail sales in the United States aver ages
about $350 billion, accor ding to the U.S. Census Bur eau. Retail businesses
include depar tm ent stor es, gr ocer y stor es, dr ug stor es, and convenient
stor es. Ser vice r elated businesses such as beauty salons, tanning salons, and
r ental center s ar e also consider ed r etail businesses. Restaur ants, on the
other hand, ar e a categor y all their ow n.
Big Box Reta il Stor es. A big box r etail stor e is also called a Power Center
and occupies an extr aor dinar ily lar ge physical space, usually 50,000 squar e
feet or m or e, and offer s a var iety of pr oducts for sale. These stor e achieve
econom ies of scale by focusing on lar ge, discount volum e sales. The ter m big
box is der ived fr om the stor e?s physical appear ance. The ar chitectur al
design of the stor e r esem bles a lar ge box. Wal-M ar t, Best Buy, Ikea, Hom e
Depot, Kohls, and Loew s ar e good exam ples of big box r etailer s.
Specia lty Reta il Shops. Specialty r etail shops concentr ate on selling one
line of m er chandise for a par ticular clientele. Specialty r etailer s usually
have a nar r ow but deep pr oduct line. Exam ples ar e w edding gow ns, pipe
tobacco, law n m ow er s, bicycles, bagels, leather goods, etc.
Sta nda lone Reta il Outlets. A standalone r etail outlet is located on a str eet
r ather than in a m all or shopping center. Exam ples of standalone r etail
stor es include Dollar Gener al, Fam ily Dollar , AutoZone, O?Reilly?s Auto Par ts,
Tr actor ?s Supply, etc.
 Types of Commercial Real Est at e 14

I n du st r i al
I ndustr ia l Fa cilities. Industr ial facilities include anything that has to do w ith m anufactur ing, stor age and
distr ibution. They m ay also include pr ocessing plants. The m ost com m on types of industr ial facilities ar e
m anufactur ing facilities, w ar ehouses, and distr ibution center s. Industr ial facilities include the land, buildings
and other im pr ovem ents on the land along w ith any per sonal pr oper ty attached as fixtur es.
M a nufa ctur ing Fa cility. A m anufactur ing facility is designed to assem ble, m ake or pr ocess a pr oduct fr om a
r aw m ater ial. M anufactur ing facilities ar e divided into tw o categor ies: heavy m anufactur ing and light
m anufactur ing. It depends on the pr oducts they m anufactur e as to w hich categor y they fall under. Heavy
m anufactur ing facilities ar e often called factor ies or plants. They pr oduce m ater ials such as steel, chem icals, pulp
and paper or other r efined pr oducts such as oil and gasoline. Light m anufactur ing facilities have less im pact on
the envir onm ent because they do not have m uch, if any, air , w ater or noise pollution. Light m anufactur ing
industr ies include clothes, shoes, fur nitur e, consum er electr onics, and hom e appliances, am ong m any other
clean-air pr oducts.
Wa r ehouse Fa cility. A w ar ehouse is a com m er cial building used for stor age of goods. They ar e used by
m anufactur er s, im por ter s, expor ter s, w holesaler s and tr anspor tation com panies. They ar e typically lar ge, plain
buildings located in industr ial ar eas of cities and tow ns. Usually, they have loading docks to load and unload
car go fr om tr ucks. Often they ar e designed to load and unload goods dir ectly fr om r ailcar s, air planes or ships.
They often have cr anes for m oving goods w hich ar e placed on pallets. Stor ed goods can include r aw m ater ials,
packing m ater ials, com ponent par ts or finished goods associated w ith agr icultur e, m anufactur ing or other
pr oduction.
Distr ibution Center s. A distr ibution center is also a w ar ehouse used to r edistr ibute pr oducts to w holesaler s,
r etailer s or dir ectly to consum er s. Distr ibution center s ar e par t of the supply netw or k . They enable a single
location to stock a vast num ber of pr oducts for distr ibution. They often include air conditioning and
r efr iger ation. A typical distr ibution center m ay ser ve as m any as 50 to 125 r etail stor es. Since lar ge r etailer s, like
Wal-M ar t, sell tens of thousands of pr oducts fr om thousands of vendor s, it w ould be inefficient to ship each
pr oduct fr om each vendor to each stor e. Sm aller r etailer s outsour ce their distr ibution r equir em ents to logistics
fir m s that coor dinate the distr ibution fr om a num ber of com panies. Distr ibution center s ar e com m only know n
by their functions, like a w ar ehouse, a fulfillm ent center , a cr oss-dock facility, a bulk br eak center , a package
handling center.
Flex Spa ce. Flex space is a ter m com m only used to descr ibe m ulti-unit industr ial buildings because they com e
w ith a por tion of the office/show r oom space and the r est is w ar ehouse space. You can ?flex? into lar ger or sm aller
spaces as needed. Other flex space is w ar ehouse space that has been conver ted to other uses. For instance, in
m any com m unities, light industr ial w ar ehouses have been conver ted to office space. Businesses that gener ally
occupy these spaces ar e dotcom s, chur ches, and som e com panies like plum bing, pest contr ol, and electr ical
subcontr actor s.
15
Lodgi n g & Hospi t al i t y
ALLHOTELSCANBEBROKENDOWN
INTOONEOFTHREECATEGORIES:
FULL-SERVICE,SELECT-SERVICE,AND
LIMITEDSERVICE.
NAREA | Introduction to Commercial Real Estate Brokerage
Lodging & Hospita lity Pr oper ties. Lodging and hospitality pr oper ties
pr ovide lodging on a shor t-ter m basis. The differ ent types of lodging and
hospitality pr oper ties ar e defined by their pur pose and level of quality.
Sm ith Tr avel Resear ch, a leader in data collection for the lodging industr y,
categor izes the hotel industr y into six segm ents know n as chain scales:
luxur y, upper -upscale, upscale, m idscale (w ith food and bever age), m idscale
(w ithout food and bever age), and economy. Another industr y-w ide
categor ization is based on asset classes. In gener al, all hotels can be br oken
dow n into one of thr ee categor ies: full-ser vice, select-ser vice, and lim ited
ser vice.
Resor t Hotels. A r esor t hotel is a place for r elaxation and r ecr eation. They
ar e located w her e tour ism and vacationing ar e a m ajor par t of the local
economy. They include seaside r esor ts, ski r esor ts, m ountain r esor ts, and
spas. They ar e typically self-contained establishm ents that accom m odate
food, dr ink, lodging, spor ts, r ecr eation, fitness, enter tainm ent and shopping.
Luxur y Hotels. A luxur y hotel is an upscale hotel that typically costs m or e
than the aver age full-ser vice hotel accom m odation. Luxur y hotels ar e
defined by such adjectives as indulgent, sum ptuous, expensive, com for table,
ser ene, extr avagant, exclusive, unique, pleasur able, and super ior in quality.
Full-Ser vice Hotels. A full-ser vice hotel has a r estaur ant, banquet and
m eeting r oom facilities, a sw im m ing pool, a r ecr eational center , a business
center and pr ovides such ser vices as laundr y and housekeeping, r oom
ser vice, valet and concier ge ser vice. The fur nishings ar e luxur ious, but less
expensive than a luxur y hotel.
Limited-Ser vice Hotels. A lim ited-ser vice hotel does not have r estaur ant or
banquet facilities and lim ited m eeting r oom space. They ar e m id-pr iced
hotels that accom m odate both business and leisur e tr aveler s. W ith the
popular ity of these hotels, the ser vices pr ovided have expanded to include a
business center , a fitness r oom , a guest laundr y facility, a m ar ket pantr y, an
indoor or outdoor pool and hot tub, and sm all m eeting r oom s. M any offer a
fr ee com plim entar y br eakfast and fr ee inter net ser vices. Lim ited-ser vice
hotels gener ally have low er oper ating costs than full-ser vice hotels because
they don?t offer m ultiple r estaur ants, banquet and cater ing ser vices.
Economy or Budget Hotels. An economy or budget hotel offer vir tually no
am enities. They ar e m odestly pr iced, but pr ovide alm ost no ser vices other
than an inexpensive no-fr ills r oom s.
Boutique Hotels. A boutique hotel is usually an expensive, upscale hotel
w ith a unique individual char acter and histor ical, per iod décor. These
hotels ar e often older pr oper ties that have been r efur bished to r esem ble the
hotels of a by-gone er a.
Bed a nd Br ea kfa st Fa cilities. A bed and br eakfast lodging establishm ent
offer s over night accom m odations and br eakfast. They ar e often conver ted
pr ivate hom es w ith few er than 10 bedr oom s. M any tim es they ar e
conver ted m ansions that have been r em odeled and r estor ed w ith som e
m odifications to the bathr oom s. They ar e often r un by a couple w ho enjoy
cater ing to a unique clientele.
 Types of Commercial Real Est at e 16

Heal t h Car e

M edica l Fa cilities. A m edical facility is any pr oper ty at w hich

m edical ser vices ar e pr ovided on a r outine basis. M edical facilities
r ange fr om sm all health clinics, physician?s offices, and ur gent or
em er gency car e center s to full-ser vice hospitals w ith elabor ate
oper ating r oom s and tr aum a center s. M edical facilities m ay be ow ned
and oper ated by for -pr ofit businesses, non-pr ofit or ganizations,
gover nm ents, and even in som e cases, pr ivate individuals.
Assisted Living Center s. An assisted living center pr ovides living
accom m odations for older people w ith lim ited m obility or w ith
disabilities. The staff at these facilities pr ovide assistance w ith daily
living activities, adm inistr ation of m edications and coor dination of
ser vices by outside healthcar e pr ovider s. They usually pr ovide dining
and social gather ing facilities.
Acute Ca r e Fa cilities. An acute car e facility pr ovides im m ediate car e
for per sons suffer ing fr om tr aum as and injur ies, r ecover y fr om
sur ger y, or sever e or sudden illness. Gener ally, the says ar e br ief and
the patients r etur n hom e or ar e tr ansfer r ed to other m edical facilities
as soon as their condition is stable.
Skilled Nur sing Fa cilities. A skilled nur sing facility is an institution
that pr ovides patients w ith r ound-the-clock car e fr om at least one
full-tim e r egister ed nur se. These establishm ents house chr onically ill,
elder ly patients. They pr ovide long-ter m nur sing car e, r ehabilitation
and other m edical ser vices. By law , the car e of ever y patient m ust be
under the super vision of a licensed physician w ho is available in
em er gency situations.
Hea lth Clinics. A health clinic is a facility often affiliated w ith a
hospital or m edical school that is devoted to the diagnosis and car e of
outpatients. M any com m unity health clinics pr ovide health car e
tr eatm ent and tr aining for those w ithout the m eans to pay for it
them selves.
Sur gica l Center s. A sur gical center , also called an am bulator y
sur ger y center , is a m edical facility designed and equipped to handle
outpatient sur ger y, pain m anagem ent, and cer tain diagnostic
pr ocedur es not r equir ing over night hospitalization. The center s m ay
be independently ow ned or par t of a com m unity hospital. Usually the
center s pr ovide shar ed accom m odations for sever al specialists w ho
ar e w or king in cooper ation w ith each other.
I ndependent Living Center s. An independent living center is a
r ehabilitation facility designed for disabled per sons to r eceive special
education and tr aining in the per for m ance of activities to help them
adapt to a par ticular handicap. A typical independent living center
contains fur nished apar tm ent units that ar e handicap accessible.
Handicap accessible units have w ider door w ays w ith kitchens,
bathr oom s and bedr oom s designed to accom m odate w heelchair
m aneuver ability.
17 NAREA | Introduction to Commercial Real Estate Brokerage

Speci al t y

Specia lty Commer cia l Pr oper ties. Specialty com m er cial r eal estate is
basically com m er cial r eal estate that doesn?t fit nicely into a m or e
conventional definition. A m ar ina or am usem ent par k m ay be consider ed
a specialty pr oper ty. Specialty pr oper ties ar e designed for specific uses.
Restaur ants ar e often consider ed a specialty pr oper ty.
Restaur a nts. Restaur ants ar e not consider ed r etail businesses. They ar e
INVESTMENTREALESTATE consider ed point-of-ser vice businesses. They ar e sim ilar to r etail
COULDBEANYTYPEOF establishm ents in that they ar e both gover ned by m any of the sam e law s
such as com pliance w ith the Am er icans w ith Disabilities Act (ADA)
COMMERCIALREALESTATE
r egar ding handicap access for people w ith disabilities and they both sell a
USEDPRIMARILYFOR finished pr oduct to the public. Restaur ants differ fr om r etail businesses in
INVESTMENTPURPOSES. that they pr epar e and ser ve food item s but do not typically handle the sale
and pur chase of other m er chandise. Their pr im ar y pur pose is to pr ovide a
dining exper ience r ather than sell a finished pr oduct. Som e r estaur ants
like Cr acker Bar r el cr oss over into r etail w hen they not only pr ovide a
dining exper ience but sell m er chandise. Restaur ants could be consider ed a
type of specialty pr oper ty.
Self Stor a ge or M ini Stor a ge Fa cilities. A self-stor age or m ini-stor age
facility pr ovides secur ed stor age space that is r ented by tenants on a
shor t-ter m basis. They usually contain sever al units of differ ent sizes
enclosed w ith a m anagem ent office and per im eter fence. Each unit is
secur ed w ith the tenant?s ow n padlock . Other stor age facilities our housed
in a single building, som e of w hich ar e tem per atur e-contr olled for the
stor age of docum ents and other valuable possessions.
Other Specia lty. Other special pur pose com m er cial r eal estate includes
such uses as car w ashes, them e par ks, bow ling alleys, m ar inas, theater s,
funer al hom es, com m unity center s and even chur ches.

Spor t s an d En t er t ai n m en t

Spor ts & Enter ta inment Fa cilities. These types of facilities include

convention center s, stadium s, ar enas, and the per for m ing ar ts.

Lan d

Commer cia l La nd. Com m er cial land is vacant pr oper ty zoned for
com m er cial uses. It m ay be zoned for any of the above m entioned uses and
m any other s too num er ous to m ention. Even far m land is consider ed
com m er cial land because it is used by far m er s to pr oduce cr ops.
I n vest m en t Real Est at e
I nvestment Rea l Estate. Investm ent r eal estate is not so m uch a separ ate
type of com m er cial pr oper ty as it is a use of com m er cial pr oper ty.
Investm ent r eal estate could by any of the above types of com m er cial r eal
estate used pr im ar ily for investm ent pur poses, i.e., achieving a r etur n on
invested capital.
 Types of Commercial Real Est at e 18

Secondary Types of Commercial Real Est at e

Ther e ar e a num ber of independent, secondar y types of com m er cial r eal estate that m ay or m ay not be
conveniently categor ized in one or m or e of the above categor ies. They ar e listed as follow s by CoStar as
Secondar y Types of com m er cial r eal estate:

Air plane Hangar Health Club Recycling Center

Air por t Hor se Stables Refr iger ation/Cold Stor age
Am usem ent Par k Hospital Rehabilitation Center
Apar tm ent Hotel Religious Facility
Assisted Living Hotel Casino Restaur ant
Auto Dealer ship Industr ial Live/Wor k Unit Schools
Auto Repair Industr ial Show r oom Self-Stor age
Auto Salvage Facility Industr ial Telecom Hot Ser vice
Bank Land Com m er cial Ser vice Station
Bar Land Industr ial Shelter
Baseball Field Land Residential Shipyar d
Bow ling Alley Landfill Single Room Occupancy
Car Wash Light Distr ibution Skating Rink
Casino Light M anufactur ing Skilled Nur sing Facility
Cem ent/Gr avel Plant Lodge/M eeting Hall Sor or ity/Fr ater nity Hospice
Cem eter y/M ausoleum Loft/Cr eative Space Stor efr ont
Chem ical/Oil Refiner y Lum ber yar d Stor efr ont Retail/Office
Congr egate Senior Housing M anufactur ing Stor efr ont Retail/Residential
Continuing Car e Retir em ent M ar ina Super m ar ket
Contr actor Stor age Yar d M edical Sw im m ing Pool
Convenience Stor e M obile Hom e Theater /Concer t Hall
Cor r ectional Facility M otel Tr ailer /Cam per Par k
Day Car e Center M ovie Theatr e Tr uck Stop
Depar tm ent Stor e M ovie/Radio/TV Studio Tr uck Ter m inal
Distr ibution Office Live/Wor k Unit Utility Sub-Station
Dor m itor y Office Telecom Hotel/ Veter inar ian/Kennel
Dr ive-in M ovie Office/Residential War ehouse
Dr ug Stor e Par king Gar age Water Retention Facility
Fast Food Par king Lot Water Tr eatm ent Facility
Flex Show r oom Police/Fir e Station W iner y
Flex Telecom Hotel/D Post Office
Food Pr ocessing Public Libr ar y
Fr eestanding R&D
Funer al Hom e Race Tr ack
Gar den Center Radio/TV Tr ansm ission
Golf Cour se/Dr iving Range Railr oad Yar d
19 NAREA | Introduction to Commercial Real Estate Brokerage

Quiz

1. Com m er cial r eal estate cover s a diver se gr oup of pr oper ty types and uses including land.
a. Tr ue
b. False
2. W hich of the follow ing is not a type of com m er cial r eal estate?
a. Office Buildings
b. M ultifam ily Residential
c. Industr ial Pr oper ties
d. Single Fam ily Hom es
3. Industr ial Flex Space can best be descr ibed as:
a. A facility designed to assem ble, m ake or pr ocess pr oducts fr om r aw m ater ial.
b. A facility designed to stor e goods.
c. A facility designed to r edistr ibute pr oducts to w holesaler s.
d. A facility designed into lar ger and sm aller spaces as needed.
4. W hich of the follow ing is not consider ed r etail?
a. A str ip shopping center
b. A Big Box stor e
c. A r estaur ant
d. A neighbor hood shopping center
5. W hich of the follow ing w ould be consider ed a health car e facility?
a. An assisted living center
b. A health clinic
c. A sur gical center
d. All of the above
6. W hich of the follow ing w ould be consider ed a specialty com m er cial pr oper ty?
a. A boutique hotel
b. Com m er cial land
c. A self-stor age facility
d. A super m ar ket
7. Investm ent r eal estate is used to achieve a r etur n on invested capital.
a. Tr ue
b. False
Types of Commercial Real Est at e 20

NOTES:
21 NAREA | Introduction to Commercial Real Estate Brokerage

SECTIONTHREE:
Establishing a Car eer in
Com m er cial Real Estate Br oker age

Commercial Real Est at e Pract it ioners are Dif f erent f rom Resident ial
Agent s
Com m er cial r eal estate pr actitioner s ar e differ ent fr om r esidential agents in m any w ays. M ost com m er cial
fir m s ar e sm all and offer little or no tr aining. Com m er cial agents ar e hesitant to shar e infor m ation about
the m ethods or m ar ket w ith other agents. Com m er cial agents often w or k alone or in pair s. They jealously
guar d their potential client list.

The Dut ies of a Commercial Agent Vary From Those of a Resident ial Agent
The duties of a com m er cial agent m ay var y fr om those of a r esidential agent. Usually, in a r esidential
tr ansaction, the agent is the per son w ho shepher ds the deal to the closing. They ar e involved in finding the
lender , w or king w ith the appr aiser , getting the inspection com pleted, scheduling the closing, and m aking
sur e that the deal actually gets done. In a com m er cial tr ansaction, the agents could be involved in
ar r anging financing, scheduling the inspection, and super vising the closing, but usually all of these duties
ar e handled by other pr ofessionals. M any buyer s and seller s in com m er cial tr ansactions ar r ange their ow n
financing and hir e their ow n attor ney to deal w ith contr act issues and the closing.
 Est abl ishing a Career in Commercial Real Est at e Brokerage 22

The Int erpersonal Skil l s of a Commercial Agent May Dif f er From Those of a
Resident ial Agent
The inter per sonal skills of a com m er cial agent m ay differ fr om that of a r esidential agent. Residential agents
need to be per sonable and have know ledge of com m unity and neighbor hood things, such as schools, par ks,
and activities, w hile a com m er cial agent needs to have a fir m gr asp on facts and figur es, the economy,
pr oper ty tax infor m ation and even zoning law s. Often a com m er cial agent w ill per for m a financial analysis
on the pr oper ty for his client. Occasionally, the com m er cial agent m ay be w or king w ith r epr esentatives of
the ow ner r ather than the ow ner him self.

NOWHEREISTHENEEDFORAPLAN
Essent ial Keys t o Est abl ishing a Career in Commercial Real M
Est
OREat
IMPeORTANTTHANWHENIT
Brokerage: COMESTOPLANNINGYOURFUTURE.
Have a Pl an
Per haps you?ve hear d of the saying, ?Failur e to plan is a plan for failur e.? Now her e is the need for a plan
m or e im por tant than w hen it com es to planning your futur e. W ithout a plan it is ver y easy for a r eal estate
pr ofessional to w aste a lot of tim e r unning in cir cles. A plan helps you identify your m ost im por tant
pr ior ities. A plan helps you put in sequence the activities you need to accom plish to be successful. In shor t, a
plan helps you get or ganized. It helps you avoid w asting tim e on needless or unim por tant activities and it
pr ovides dir ection. A plan helps you budget your financial needs and helps you allocate your scar ce
r esour ces to the task at hand. A plan is the beginning of a good tim e m anagem ent system .

M an age You r Ti m e W i sel y

W hen you em bar k on a new endeavor , it is easy to spend a lot of tim e ?spinning your w heels.? You w ill find
that your jour ney into com m er cial r eal estate br oker age w ill be a fr ustr ating exper ience if you do focus your
attention on the things that m atter m ost. By having an or ganized system , establishing pr ior ities, and setting a
r ealistic goal to accom plish those pr ior ities, you w ill avoid w asting a lot of tim e. This class w ill help you
or ganize your appr oach, establish pr ior ities and set r ealistic goals.

Get t h e Pr oper Tr ai n i n g

The typical appr oach w hen enter ing the field of com m er cial r eal estate br oker age is to join a fir m that
specializes in com m er cial r eal estate and then begin w or king for a m entor for a year or tw o. Your m entor is
supposed to show you the r opes. In the m eantim e, you ar e not per m itted to do any outside sales on your
ow n, especially any r esidential sales. You ar e to focus str ictly on com m er cial r eal estate br oker age and assist
your m entor w ith any assignm ents he or she gives you. For your assistance, you ar e paid a nom inal fee,
usually a per centage of w hat the m entor m akes in com m ission sales. Som etim es you can negotiate a sm all
salar y base. W ith the m entor ing pr ogr am , ther e is ver y little system atic for m al tr aining.
For m ost r esidential r eal estate salespeople w ho w ant to enter the com m er cial br oker age business, this
appr oach is im pr actical. Usually, you have spent year s cultivating a client base and establishing a r efer r al
business. Your r esidential br oker age business has becom e ver y r outine. You?r e not r eady for a new
challenge. The best w ay to pr epar e your self for that challenge is to begin taking classes on com m er cial r eal
estate br oker age, unfor tunately ther e ar e ver y few com m er cial br oker age classes offer ed. That?s w her e the
Cer tified Com m er cial Specialist (CCS) and Cer tified Com m er cial Br oker (CCB) pr ogr am com es in. It is the best
for m al tr aining you can obtain to begin a car eer in com m er cial r eal estate br oker age.
23
REALESTATEISONEINDUSTRYWHERE
BEINGA"JACKOFALLTRADES"DOESN'T
REALLYPAYOFF.
NAREA | Introduction to Commercial Real Estate Brokerage
Pi ck an Ar ea of Speci al i zat i on
Once you decide that com m er cial r eal estate is for you, you need to
deter m ine an ar ea of specialization. In sm aller m ar kets, you m ay be able
to w or k in m or e than one ar ea, but in the lar ger m ar kets, ther e ar e ver y
few gener alists anym or e. The industr y has becom e too com plex and the
m ar ket too lar ge to tr y to know ever ything. The m ain ar eas of
specialization ar e m ultifam ily, office, r etail, industr ial, land and
investm ents. Investm ents cover the spectr um of the m ajor pr oper ty types
w ith an em phasis on investm ent analysis and building a database of
potential investor s.
In addition to the typical ar eas of specialization, one could also focus on
other ar eas such as developm ent, finance, pr oper ty m anagem ent, office
m anagem ent, business br oker age, hospitality and lodging, m edical office,
secur ities syndication and r eal estate investm ent tr usts. Typically, these
specializations ar e tr eated as a subset of the m ain categor ies.
If you spr ead your self too thin, you?ll lose your effectiveness. Real estate is
one industr y w her e being a ?Jack of all tr ades? doesn?t r eally pay off. Pick a
type that per sonally appeals to you and one that is pr evalent in your
m ar ket. Then identify your far m ar ea and begin developing a
com pr ehensive pr oper ty database.
Def i n e You r M ar k et
Once you have identified your ar ea or ar eas of specialization, it?s tim e to
focus on under standing your m ar ket. Now that you have deter m ined w hat
type of com m er cial r eal estate is m ost appealing, you need to decide w her e
you w ant to w or k .
Since ther e ar e few er com m er cial pr oper ties that r esidential hom es, your
far m ar ea w ill likely be lar ger that it w ould be if you w er e lim ited your self
str ictly to r esidential sales, but keep the distance you ar e dr iving to your
far m ar ea as shor t as possible. Tim e is m oney and dr iving long distances to
and fr om your far m ar e is unpr oductive.
Ear n t h e Ri gh t Desi gn at i on
Once you pick an ar ea or ar eas of specialization, you should consider
joining the or ganizations that suppor t you in that specialty. It is likely that
the or ganization/s you join w ill hold national conventions and pr ovide
w ebinar s r egar ding your ar ea of specialization. They w ill also confer
designations and cer tifications as w ell as publish per iodic new sletter s and
even m onthly or quar ter ly m agazines. This w ill all be valuable to help you
establish cr edibility in the industr y. The follow ing or ganizations and
designations ar e available:
 Est abl ishing a Career in Commercial Real Est at e Brokerage 24

Nat i on al Associ at i on of Real t or s (NAR)

Although the lar gest m ajor ity of NAR m em ber s specialize in single-fam ily r esidential sales and leasing,
ther e is a gr ow ing num ber of com m er cial pr actitioner s. The w ebsite has a designated com m er cial section
and additional infor m ation on com m er cial r eal estate. M any local Realtor associations have separ ate
com m er cial com m ittees and m em ber ship pr ogr am s for com m er cial br oker s and sales associates. This
or ganization has over 1 m illion m em ber s. Websi t e: http://w w w.r ealtor.or g/com m er cial

Th e Cou n sel or s of Real Est at e (CRE)

The Counselor s of Real Estate (CRE) is an inter national netw or k of adviser s w ho w or k w ith clients on
com plex r eal estate tr ansactions. M em ber s m ust be invited to join the netw or k, although this invitation can
be self-initiated. The gr oup publishes a m agazine thr ee tim es a year , w hich m ay be dow nloaded fr ee of
char ge. Websi t e: http://w w w.cr e.or g

Soci et y of I n du st r i al an d Of f i ce Real t or s (SI OR)

The Society of Industr ial and Office Realtor s (SIOR) is an or ganization for com m er cial pr actitioner s w ho
specialize in industr ial and office pr oper ties. M em ber s m ay obtain the SIOR designation by com pleting the
r equir ed cour se pr ogr am and by achieving a cer tain level of br oker age pr oduction. The gr oup publishes a
quar ter ly online m agazine on its w ebsite that is fr ee of char ge. This inter national association has over
3,000 m em ber s. Websi t e: http://w w w.sior.com

Com m er ci al Real Est at e Devel opm en t Associ at i on (NAI OP)

NAIOP is a com m er cial r eal estate educational pr ovider that ser vices those w ho specialize in industr ial,
office and m ixed-use pr oper ties. Its m em ber s actively sponsor and suppor t gover nm ent legislation that
affects the r eal estate industr y and its pr ofessional pr actitioner s. It publishes a quar ter ly online m agazine
that is available on its w ebsite. This or ganization has over 15,000 m em ber s. Websi t e: http://w w w.naiop.or g

CCI M I n st i t u t e
The CCIM Institutes has an educational pr ogr am for all com m er cial r eal estate pr ofessionals. The Cer tified
Com m er cial Investm ent M em ber (CCIM ) designation is one of the m ost r ecognized in the industr y. To ear n
the designation a candidate m ust take advanced tr aining in financial analysis, leasing and m ar keting and
pass a com pr ehensive exam ination. To becom e a m em ber , a candidate m ust also subm it a por tfolio of
qualifying exper ience. The CCIM Institute publishes a bim onthly m agazine that is also available for fr ee on
its w ebsite. Websi t e: http://w w w.ccim .com

Th e Ur ban Lan d I n st i t u t e (ULI )

The Ur ban Land Institute (ULI) is an inter national non-pr ofit or ganization inter est in developing and/or
r edeveloping com m unities, neighbor hoods and business distr icts. ULI sets the standar ds in ur ban
planning. ULI offer s a w ide r ange of pr ofessional developm ent cour ses. A online m agazine is available
fr om its w ebsite for fr ee. Ther e ar e over 30,000 ULI m em ber s. Websi t e: http://uli.or g

Th e Real t or s Lan d I n st i t u t e (RLI )

This or ganization offer s netw or king, r efer r al and educational oppor tunities to its m em ber s. The
association is focused on pr ofessionals w ho ar e involved w ith all types of land including: agr icultur al,
tim ber , r ecr eational, and special-use pr oper ties. It offer s the Accr edited Land Consultant (ALC) designation.
Websi t e: http://r liland.com
25 NAREA | Introduction to Commercial Real Estate Brokerage

Th e I n st i t u t e of Real Est at e M an agem en t (I REM )

IREM focuses on the educating its m em ber s on the pr oper ty m anagem ent of all types of r eal estate
pr oper ties, par ticular ly m ultifam ily housing. The m ost r ecognized designation IREM offer s is the Cer tified
Pr oper ty M anager (CPM ). A bim onthly online m agazine is available for fr ee fr om its w ebsite. Ther e ar e
appr oxim ately 18,000 m em ber s. Websi t e: http://w w w.ir em .or g

Bu i l di n g Ow n er s an d M an ager s Associ at i on (BOM A) I n t er n at i on al

BOM A w as founded in 1907. This inter national or ganization specializes in pr oviding building m anagem ent
and leasing education. BOM A is an excellent sour ce of infor m ation on building codes, building oper ations
and m anagem ent, leasing, technology, vacancy r ates, and building oper ating costs. It is actively involved
w ith legislation. Ther e ar e num er ous ar ticles published on its w ebsite that ar e available for fr ee. Ther e ar e
over 16,000 m em ber s. Websi t e: http://w w w.bom a.or g

I n t er n at i on al Cou n ci l of Sh oppi n g Cen t er s (I CSC)

The ICSC focuses on r etail. They ar e the shopping center specialists. They pr ovide netw or king thr ough its
global r etail r eal estate convention know n as ICSC ReCon. In addition, ICSC pr ovides sem inar s and r esear ch
publications. Ther e ar e both r egional and inter national m eetings m em ber s can attend. M em ber s can
access a global dir ector y of shopping center s that lists the nam es, locations, and ow ner s of each pr oper ty.
ICSC publishes a fr ee online new sletter. It is not unusual to have 25,000 attendees at its annual ReCon
convention usually held in Las Vegas, Nevada.

Nat i on al Associ at i on of Real Est at e Adv i sor s (NAREA)

NAREA is a r elatively new or ganization that pr ovides tw o designations for com m er cial r eal estate
pr ofessionals: Cer tified Com m er cial Advisor (CCA) and Real Estate Investm ent Advisor (REIA). The CCA
designation focuses on tr aining br oker s and agents on how to list, sell and lease com m er cial r eal estate.
The REIA designation is for both com m er cial and r esidential r eal estate pr ofessionals w ho focus on
advising clients w ho w ant to invest in r eal estate. Websi t e: http://w w w.nar eagr oup.or g
 Est abl ishing a Career in Commercial Real Est at e Brokerage 26

Quiz

1. The duties of a com m er cial r eal estate agent ar e the sam e as those of a r esidential agent.
a. Tr ue
b. False
2. W hich of the follow ing is not an essential key to establishing a car eer in com m er cial r eal estate
br oker age?
a. Paying off your autom obile
b. M anaging your tim e w isely
c. Having a defined plan of action
d. Getting the pr oper tr aining
3. In com m er cial r eal estate br oker age, it is im por tant to pick an ar ea of specialization.
a. Tr ue
b. False
4. W hich of the follow ing is not a com m er cial r eal estate designation?
a. Cer tified Com m er cial Investm ent M em ber (CCIM )
b. Society of Industr ial and Office Realtor s (SIOR)
c. Cer tified Residential Specialist (CRS)
d. Cer tified Com m er cial Advisor (CCA)
5. The National Association of Realtor s (NAR) does not offer any com m er cial designations.
a. Tr ue
b. False
6. The National Association of Realtor s (NAR) is not involved w ith com m er cial r eal estate
br oker age.
a. Tr ue
b. False

NOTES:
27 NAREA | Introduction to Commercial Real Estate Brokerage

SECTIONFOUR:
Tools of the Tr ade for Com m er cial Real Estate Agents

Camera
Ever y r eal estate pr ofessional needs to have and know how to use a digital cam er a. The cam er a on your
sm ar t phone m ay suffice if it has zoom and flash capability, but the quality w ill never be as good as a digital
cam er a. Your cam er a m ust have Bluetooth if you w ant to w ir elessly tr ansfer photos to your com puter. The
m or e m egapixels your cam er a has, the better the r esolution w ill be.

Comput er
Desktop, Laptop, and Notebook com puter s ar e all suitable for com m er cial r eal estate pr ofessionals, w hile Tablet
com puter s ar e less helpful.
A desktop com puter or PC (for per sonal com puter ) is a com puter that is designed to stay at a single location,
either at hom e or at an office. The m ost com m on configur ation of a desktop com puter is a m onitor , a keyboar d,
a m ouse, and a tow er case w hich houses the m ain com ponents of the PC, i.e., the pow er supply, the
m other boar d, the har d dr ive, and the optical dr ive. The m ain advantages of a desktop com puter ar e its capacity
and faster pr ocessor s. The m ain disadvantage is its lack of por tability. This m eans you can?t take the com puter
w ith you w hen you tr avel.
 Tool s of t he Trade f or Commercial Real Est at e Agent s
MOSTPRACTITIONERSHAVEBOTHA
DESKTOPCOMPUTERANDALAPTOP
COMPUTERWHICHTHEYUSE
INTERCHANGEABLY.
28
A laptop com puter is m or e por table. It allow s you to per for m tasks
w hile on the go. Ther e ar e m any places, like coffee shops and
r estaur ants, that have public W ifi access. Laptop technology has
im pr oved significantly over the year s. They can now handle m ost of
the tasks that w er e initially only available on a desktop com puter.
Since their pow er sour ce is a batter y, they can pr etty m uch go
anyw her e.
Laptop com puter s often include w ebcam s, speaker s, and inter nal
m icr ophones that m ay not com e w ith a desktop com puter. They also
r equir e a lot less space, but their m ain dr aw back is the size and
functionality of the keyboar d. If you?r e w or king on a big pr oject, it?s
difficult to spend long hour s typing on its keyboar d. M ost
pr actitioner s have both a desktop com puter and a laptop com puter
w hich they use inter changeably.
A Notebook com puter is a por table com puter that is gener ally
sm aller than either a desktop or laptop com puter. A Notebook
com puter is a for m of laptop com puter. They ar e lighter in w eight,
due to their thin scr een. IBM , Apple, Com paq, Dell, Toshiba, and
Hew lett-Packar d all m ake notebook and laptop com puter s.
Notebooks can be tur ned into a desktop com puter w ith a docking
station.
The m ain advantage of a notebook com puter is its por tability,
how ever ther e ar e som e disadvantages too. Notebook com puter s
have less capacity to stor e infor m ation and function slow er than a
desktop com puter. Since the notebook com puter is lim ited in size,
you w ill find that its gr aphics and audio output quality m ay be
lim ited. Also, it?s gener ally m or e pr icey than a desktop com puter.
A tablet com puter , com m only r efer r ed to as a tablet PC, ar e w ir eless
por table per sonal com puter s that utilize a touch scr een or a stylus
pen to access or pr ocess infor m ation. M ost do not r equir e a
keyboar d or a m ouse. If you desir e a keyboar d, m ost have
detachable keyboar ds. Tablet com puter s ar e sm aller , lighter and
m or e m anageable than other types of com puter s, but they gener ally
have a higher pur chase pr ice. Tablets typically have longer batter y
life than r egular laptops and notebooks. Som e of the m ain
disadvantages of a tablet com puter is the significantly slow er typing
speed that on com puter s w ith conventional keyboar ds. A tablet is
not er gonom ically designed, w hich m eans it?s har der on your
w r ists. It also has w eaker video gr aphics.
Investopedia identified seven disadvantages of tablet com puter s: (1)
They do not have a keyboar d, but use a touchscr een instead w hich
m eans typing anything can be tim e consum ing; (2) M any tablet
com puter s do not include por ts, w hich lim its their over all
functionality; (3) Ver y few tablet com puter s com e w ith DVD dr ives,
w hich does not allow you to w atch m ovies; (4) Tablet com puter s lack
high-definition video capability; (5) Tablet com puter s ar e fr agile.
Their touchscr eens can be easily dam aged; (6) Tablet com puter s
ar en?t er gonom ically cor r ect. Using a tablet can be aw kw ar d and
can r esult in neck, back and w r ist injur ies; (7) Tablet com puter s ar e
pr icey. The aver age pr ice r ange is gener ally over $400.
29 NAREA | Introduction to Commercial Real Estate Brokerage

Cont act Management Syst em

Contact M anagem ent Softw ar e (CM S) centr alizes, str eam lines, and standar dizes all r elevant contact-r elated
infor m ation, m aking it r eadily available anytim e you w ant to contact or inter face w ith an existing or potential
client. CM S is also called Custom er Relationship M anagem ent (CRM ).
The r etr ieval of infor m ation about contacts is fully autom ated and com pletely consolidated thr ough a single,
centr alized r epositor y. It includes the nam es, titles, m ailing addr esses, phone num ber s, em ail addr esses, and other
im por tant contact infor m ation. The best CRM softw ar e pr ogr am s offer these eight things: (1) SaaS
Solution/On-Pr em ise; (2) M obile App; (3) Em ail M ar keting; (4) Data Cap: Per User /Unlim ited; (5) Data Im por t
For m ats; (6) Analytics; (7) Em ail Integr ations; and (8) Fr ee Tr ial Ver sion. Her e is a com par ison of som e of the top
CRM Softw ar e pr ogr am s.

Nam e Cost SaaS Data M obile Analytics Em ail Em ail Data Cap Fr ee
On Im por t App M ar keting Integr ate Tr ial

Salesfor ce Sales Cloud $25/m onth x x x x x x x x

w w w.salesfor ce.com

Net Suite $129/m onth x x x x x x x

w w w.netsuite.com

Infusionsoft $199/m onth x x x x x x x

w w w.infusionsoft.com

Pipedr ive $9/m onth x x x x x x x

w w w.pipedr ive.com

M icr osoft Dynam ics $65/m onth x x x x x x x x

w w w.m icr osoft.com /
dynam ics

Pr ophet CRM $25/m onth x x x x x x x

w w w.avidian.com

Dat abase of Propert ies

Real Estate Assistant (REA) is a pr oject, pr oper ty, and client tr acking system . It is specifically designed for
com m er cial r eal estate by com m er cial r eal estate br oker s. It allow s you to tr ack deals, listings, pr oper ties, buyer s,
seller s, tenants, spaces, com ps and link them together. It auto syncs to Outlook and sm ar t phones. Website:
http://w w w.gor ea.com .
Realhound claim s to be the best com m er cial r eal estate softw ar e for contact m anagem ent. It w as cr eated by
Andr ew Blount in 1996 and is endor sed by sever al top com m er cial fr anchise br oker ages. Realhound or ganizes
your im por tant infor m ation. W ith Realhound you only enter the data once. Realhound is a w eb-based softw ar e
pr ogr am that has Apps for iPhone, iPad and Andr oid. Website: http://w w w.r ealhound.com .
One caveat that m ay or m ay not be tr ue, but w as r epor ted on Tr ulia, w as that they tr ied to dow nload the softw ar e
and it cor r upted their system . They?ve been in business since 1996, so hopefully that com m ent w as an isolated
incident.
 Tool s of t he Trade f or Commercial Real Est at e Agent s 30

Document Scanner
A docum ent scanner is an optical input device that scans docum ents such
as photogr aphs and pages of text. W hen the docum ent is scanned, it is
conver ted into a digital electr onic for m at that can be view ed and, in som e
cases, edited on a com puter. M ost scanner s ar e flatbed devices, w hich uses
a flat scanning sur face. This is ideal for flat objects such as photogr aphs,
m agazines, and var ious docum ents. Scanner s w or k in conjunction w ith
THEHP10BII FINANCIAL com puter softw ar e pr ogr am s, w hich im por t data fr om the scanner.
CALCULATORISTHE
STANDARDFORREALESTATE Financial Cal cul at or
ANALYSISTHATISUSEDBY A financial calculator per for m s financial functions com m only used in r eal
MOSTREALESTATE estate applications. It is differ ent fr om an ar ithm etic calculator in that it
PROFESSIONALS. per for m s m or e com plex oper ations than sim ply add, subtr act, m ultiply
and divide. A financial calculator can am or tize a m or tgage, deter m ine a
loan balance at any given per iod of tim e, and calculate the inter nal r ate of
r etur n or net pr esent value given the r ight input instr uctions. The HP 10BII
financial calculator is the standar d for r eal estate analysis that is used by
m ost r eal estate pr ofessionals. You can dow nload the app or ther e?s an
inter active sim ulator available online at the follow ing w ebsite:
http://w w w.educalc.net/1268086.page.

Print er
A laser pr inter is a high-speed pr inter that uses a laser to for m dot-m atr ix
patter ns and an electr ostatic pr ocess to fuse m etallic par ticles to paper a
page at a tim e. M ost new Bluetooth-enabled laser pr inter s allow you to
pr int fr om a w ir eless device. If you ar e buying a new pr inter , m ake sur e it
has som e type of w ir eless connectivity, if you w ant to m axim ize your
efficiency.

Smart Phone
Not all cell phones ar e sm ar t phones. You don?t need to have the latest and
gr eatest phone to be pr oductive, but a sm ar t phone m ay help you becom e
m or e efficient. A sm ar t phone is a m obile phone w ith m or e advanced
com puting capability and connectivity than a basic phone. In 2007, Apple
Inc. intr oduced the iPhone, one of the fir st m obile phones to use a
m ulti-touch inter face. Now the tw o m ost popular types of sm ar t phones ar e
the iPhone and the Andr oid, backed by Google. Sm ar t phones allow you to
pur chase Apps w hich can be used in conjunction w ith your phone.

Social Media
Social m edia w ebsites such as LinkedIn, Facebook, and Tw itter ar e useful
w hen used for business. They enable netw or king am ong com m er cial r eal
estate pr actitioner s by for m ing gr oups of like-m inded user s.
31 NAREA | Introduction to Commercial Real Estate Brokerage

Spreadsheet Program
Spr eadsheet pr ogr am s such as M icr osoft?s Excel, Google?s Docs, and Apple?s iWor k ar e available online to
per for m financial analyses on r eal estate pr oper ties.

Websit e
Ever y com m er cial r eal estate pr actitioner needs to either have his ow n w ebsite or belong to a com pany that
pr ovides a user -fr iendly, pr ofessional w ebsite. It needs to have the capability to display pr oper ty listings,
per for m sear ches, and pr ovide com pany and contact infor m ation. To gener ate leads, the w ebsite needs to be
pr ogr am m ed w ith Google Analytics so that you can deter m ine w hat dr ives tr affic to the site. Pr oviding
infor m ation about the m ar ket and per iodically posting ar ticles and other useful infor m ation about the
industr y w ill also help dr ive tr affic to your site.
 Tool s of t he Trade f or Commercial Real Est at e Agent s 32

Quiz

1. All of the follow ing ar e tools of the tr ade for com m er cial r eal estate agents except:
a. Psychiatr ist
b. Cam er a
c. Com puter
d. Financial calculator
2. In com m er cial r eal estate br oker age, it is im por tant to have a Custom er Relationship
M anagem ent (CRM ) system .
a. Tr ue
b. False
3. In com m er cial r eal estate br oker age, it is not essential to have a database of pr oper ties.
a. Tr ue
b. False
4. A financial calculator and an ar ithm etic calculator ar e the sam e thing.
a. Tr ue
b. False
5. The benefits of having a sm ar t phone for use in com m er cial r eal estate ar e:
a. It enables you to be m or e efficient
b. It has Apps for com m er cial r eal estate use
c. It keeps you connected w ith social m edia
d. All of the above

NOTES:
33 NAREA | Introduction to Commercial Real Estate Brokerage

SECTIONFIVE:
Com pensation for Com m er cial Real Estate Agents

The Average Resident ial Agent Earns About $43,000 a Year

Residential r eal estate agents can ear n a ver y good living and som e cer tainly do. The aver age r esidential
agent ear ns about $43,430 a year w hile som e knock dow n an annual six-figur e incom e. Although they
don?t enjoy the long hour s, the nights or w eekend w or k, they do enjoy the incom e that com es w ith
w or king 24-7.

The Average Commercial Agent Earns About $68,000 a Year

Com m er cial r eal estate agents ear n on aver age about $68,000 a year. The likelihood of their salar y being
above that level, once they gain som e exper ience, is ver y high. M ost good com m er cial r eal estate agents
ear n an incom e that is 40 per cent higher than their r esidential counter par ts. Com m er cial agents also
w or k long hour s, but tend to w or k less nights, holidays and w eekends because their clients don?t w or k
dur ing those tim es.
 Compensat ion f or Commercial Real Est at e Agent s 34

Commercial Real t ors

Have Higher Incomes

In 2011, the National Association of

Realtor s sur veyed their com m er cial
m em ber s and discover ed that the
m edian gr oss incom e of those
r esponding w as $86,000. Accor ding
to the sur vey, the m edian age w as 57
year s old and 66 per cent of the
r espondents had a college degr ee or
higher. The m edian num ber of
tr ansactions w as seven, w ith a
m edian tr ansaction size of $2
m illion. a

Addit ional I nf or m at ion Header

a. Chandler, Cindy S., "The Insider 's Guide to
Commercial Real Estate, Second Edition,"
Dearborn, 2013, p. 7.
35 NAREA | Introduction to Commercial Real Estate Brokerage

Quiz

1. The aver age com m er cial r eal estate agent ear ns m or e than the aver age r esidential agent.
a. Tr ue
b. False
2. Com m er cial r eal estate agents usually r eceive a higher com m ission split than r esidential agents.
a. Tr ue
b. False
3. Com m er cial r eal estate br oker age com panies usually spend m or e m oney on r esear ch than
r esidential r eal estate br oker age com panies.
a. Tr ue
b. False
4. Com m er cial r eal estate agents usually have m or e tr ansactions per year than r esidential r eal
estate agents.
a. Tr ue
b. False
5. Accor ding to a 2011 NAR sur vey, the m edian age of a com m er cial r eal estate agent is 35.
a. Tr ue
b. False
6. Accor ding to a 2011 NAR sur vey, 66 per cent of the r espondents had a college degr ee or higher.
a. Tr ue
b. False
Compensat ion f or Commercial Real Est at e Agent s 36

NOTES:
37 NAREA | Introduction to Commercial Real Estate Brokerage

SECTIONSIX:
Advantages of Com m er cial Real Estate Br oker age

BUSINESSPEOPLEDON'T
WANTTOWASTEYOURTIME There are More Avenues f or Success in Commercial
ORTHEIRTIME.THEYWANT Real Est at e
TOGETIN,MAKEADECISION,
ANDMOVEON. In com m er cial r eal estate, ther e ar e m or e avenues for success than in
r esidential r eal estate. As you becom e fam iliar w ith the differ ent types of
com m er cial r eal estate, it w ill be im por tant for you to select one or tw o
types of pr oper ties to specialize in.
Star ting a car eer in com m er cial r eal estate br oker age r equir es both
know ledge of each of the var ious types of com m er cial pr oper ties as w ell as
a fundam ental know ledge of com m er cial r eal estate br oker age in gener al.

There is Less Weekend and Evening Work

Com m er cial r eal estate br oker age has som e unique advantages over
r esidential r eal estate br oker age. Fir st, ther e is less w eekend and evening
w or k . Those w ho buy, sell and lease com m er cial r eal estate ar e m or e
inclined to w or k dur ing r egular business hour s. They w ant their evenings
and w eekends fr ee to spend tim e w ith fam ily and pur sue other inter ests.

You Get t o Work Wit h Ot her Prof essional s

Com m er cial r eal estate br oker age m eans w or king w ith other pr ofessionals.
People w ho ow n and m anage businesses ar e ser ious-m inded individuals
w ho don?t w ant to w aste their tim e or your s.

Working Wit h Decision Makers Wast es Less of Your

Time
Decision m aker s have an objective to accom plish, i.e., finding the r ight
pr oper ty either for their business or as an investm ent, and they w ant to
m ake a decision and get on w ith life. They ar e decision m aker s not tim e
w aster s. Since m ost agents ar e com m ission-based, r esidential clients ar e
m or e than w illing to w aste your tim e. This is less tr ue in com m er cial r eal
estate br oker age. Business people don?t w ant to w aste your tim e or their
tim e. They w ant to get in, m ake a decision, and m ove on.
 Advant ages of Commercial Real Est at e Brokerage 38

Quiz

1. In com m er cial r eal estate br oker age, ther e ar e m or e avenues for success than in
r esidential r eal estate br oker age.
a. Tr ue
b. False
2. Com m er cial r eal estate br oker age usually involves m or e w eekend and evening w or k
than r esidential br oker age.
a. Tr ue
b. False
3. The com m er cial r eal estate br oker age business is exciting for all of the follow ing r easons
except:
a. You get to w or k w ith other pr ofessionals
b. You have less str ess
c. You have m or e per sonal tim e on w eekends
d. You w aste less tim e w or king w ith clients
4. One of the biggest deter r ents to enter ing the com m er cial r eal estate business is fear of
failur e.
a. Tr ue
b. False
5. M or e know ledge of com m er cial r eal estate does not help to over com e the fear of failur e.
a. Tr ue
b. False

NOTES:
3939 NAREA | Introduction to Commercial Real Estate Brokerage 39

SECTIONSEVEN:
Panel Discussion w ith Top Com m er cial Realtor s

How did you f irst get int o t he business of real est at e?

Why did you choose commercial real est at e brokerage inst ead of
resident ial real est at e brokerage or do you do bot h?

How did you l earn t he commercial real est at e brokerage business?

What educat ion and skil l s have you f ound most usef ul ?

Has a career in commercial real est at e been f inancial l y rewarding?

Woul d you advise ot hers t o get int o commercial real est at e brokerage?

What suggest ions do you have f or someone who is considering

commercial real est at e?
 Final Exam 40

FINALEXAM
1. W hich of the follow ing w ould be consider ed a specialty com m er cial pr oper ty?
a. A boutique hotel
b. Com m er cial land
c. A self-stor age facility
d. A super m ar ket
2. Com m er cial r eal estate is a highly standar dized industr y.
a. Tr ue
b. False
3. The benefits of having a sm ar t phone for use in com m er cial r eal estate ar e:
a. It enables you to be m or e efficient
b. It has Apps for com m er cial r eal estate use
c. It keeps you connected w ith social m edia
d. All of the above
4. One of the biggest deter r ents to enter ing the com m er cial r eal estate business is fear of failur e.
a. Tr ue
b. False
5. Com m er cial r eal estate agents usually have m or e tr ansactions per year than r esidential r eal
estate agents.
a. Tr ue
b. False
6. W hich of the follow ing is not an essential key to establishing a car eer in com m er cial r eal estate
br oker age?
a. Paying off your autom obile
b. M anaging your tim e w isely
c. Having a defined plan of action
d. Getting the pr oper tr aining
7. The com m er cial r eal estate br oker age business is exciting for all of the follow ing r easons except:
a. You get to w or k w ith other pr ofessionals
b. You have less str ess
c. You have m or e per sonal tim e on w eekends
d. You w aste less tim e w or king w ith clients
8. The aver age com m er cial r eal estate agent ear ns m or e than the aver age r esidential agent.
a. Tr ue
b. False
9. W hich of the follow ing is not consider ed r etail?
a. A str ip shopping center
b. A Big Box stor e
c. A r estaur ant
d. A neighbor hood shopping center
10. Accor ding to a 2011 NAR sur vey, 66 per cent of the r espondents had a college degr ee or higher.
a. Tr ue
b. False
4141 NAREA | Introduction to Commercial Real Estate Brokerage

11. You need a college degr ee to be a com m er cial r eal estate agent.
a. Tr ue
b. False
12. Com m er cial r eal estate agents usually r eceive a higher com m ission split than r esidential agents.
a. Tr ue
b. False
13. In com m er cial r eal estate br oker age, ther e ar e m or e avenues for success than in r esidential r eal
estate br oker age.
a. Tr ue
b. False
14. Industr ial Flex Space can best be descr ibed as:
a. A facility designed to assem ble, m ake or pr ocess pr oducts fr om r aw m ater ial.
b. A facility designed to stor e goods.
c. A facility designed to r edistr ibute pr oducts to w holesaler s.
d. A facility designed into lar ger and sm aller spaces as needed.
15. Com m er cial r eal estate br oker age is gener ally m or e com plicated than r esidential br oker age.
a. Tr ue
b. False
16. All of the follow ing ar e tools of the tr ade for com m er cial r eal estate agents except:
a. Psychiatr ist
b. Cam er a
c. Com puter
d. Financial calculator
17. W hich of the follow ing is not a com m er cial r eal estate designation?
a. Cer tified Com m er cial Investm ent M em ber (CCIM )
b. Society of Industr ial and Office Realtor s (SIOR)
c. Cer tified Residential Specialist (CRS)
d. Cer tified Com m er cial Advisor (CCA)
18. Com m er cial r eal estate cover s a diver se gr oup of pr oper ty types and uses including land.
a. Tr ue
b. False
19. The National Association of Realtor s (NAR) does not offer any com m er cial designations.
a. Tr ue
b. False
20. Investm ent r eal estate is used to achieve a r etur n on invested capital.
a. Tr ue
b. False
21. Com m er cial r eal estate br oker age is a skill set that can be lear ned.
a. Tr ue
b. False
22. W hich of the follow ing w ould be consider ed a health car e facility?
a. An assisted living center
b. A health clinic
c. A sur gical center
d. All of the above
23. In com m er cial r eal estate br oker age, it is im por tant to pick an ar ea of specialization.
a. Tr ue
b. False
24. In com m er cial r eal estate br oker age, it is not essential to have a database of pr oper ties.
a. Tr ue
b. False
25. Com m er cial r eal estate br oker age usually involves m or e w eekend and evening w or k than
r esidential br oker age.
a. Tr ue
b. False
 14034 S 145 E, Suite 100
CCA
Courses NAREA Draper, UT 84020
801-931-5571
www.nareagroup.org