So, you think you want a career in commercial real estate (CRE)? Good choice. I made the same one almost 7 years ago and haven’t looked back since. In fact, at the time I was a month away from having my first child, living in San Francisco (one of the most expensive places in the US) and my wife was ready to throw me out of the house. I had been in a long transition period doing everything I could to break into the industry, but without any formal business background, no business school and not even knowing what a P&L was when asked during a property management interview (no kidding) I was fighting an uphill battle. To make matters worse, we were living on my wife’s income and I was running out of time.
With one month left, I had just interviewed for a teaching position at a school and been offered the job. I still remember taking the call as I crossed the Golden Gate bridge. “Can I have one week to decide?” I asked as I thought about the other job I was pursuing – an entry level position on a commercial real estate property management team. I immediately called my other prospective employer and gave him the news. He was waiting on some internal information as to the timing of hiring me, but it was imminent…or so he told me. The time came where I had to decide on the teaching position and I still hadn’t found out if I was getting the real estate job. Here was a chance for stability, a paycheck and excellent benefits. It was in the field I had chosen to get a master’s degree in and with a baby around the corner, it was the safe bet. But I wasn’t looking for the safe bet. I was looking to blaze a new trail.
If you’re deciding on a career in CRE, let me just first say congratulations. However, don’t bask in that too long, you’ll need to figure out exactly what you want to do in the industry. The beauty of real estate, in general, is that there are so many different career applications in the field. These range from working in property management, to leasing property, working as a lender for financial institutions, selling property, to building property from the ground up and on and on. It’s a long way of saying, there’s a lot of ways to make money in CRE. But, whether you are fresh out of college, or were like me and you are switching careers, there are a few steps to consider taking before you jump into the commercial real estate arena with both feet.
Below are three things you should do when preparing to enter the commercial real estate industry. These are the exact steps I took to go from a teaching career to breaking in the CRE industry.
From the day I decided I was going to pursue commercial real estate to the day I went in for my first day of work was about 8 months. This was the time it took for me to research various jobs in the industry, take people out for coffee, do ride alongs, show up to broker recruiting nights and read everything I could online about various roles in CRE. In other words, I did a lot of research to figure out what EXACTLY I wanted to do. Because there are so many things you can do, it is important to understand what you like and what you don’t like about the different jobs. I looked at it as a way of understanding exactly what each role looked like day in and day out and then taking my skill set, my goals and where I eventually wanted to be and use that role to get me there.
While you are doing research, you'll want to start to answer some questions that will help guide you in this process. As you go through this you'll start to gravitate towards certain roles or fields with real estate. Even if you don’t know exactly what they are, take some time to think about what it is that you are drawn to in the field. The questions below will help guide you in that process.
What are your goals for getting into commercial real estate?
What aspects of CRE do you like? What do you not like?
What do you consider your strengths?
What is holding you back from a specific CRE career?
Where do you see yourself in 5 years in CRE?
Why do you see yourself being successful in CRE?
If you aren't sure what area of commercial real estate to go into, you'll want to spend some time looking at the various career paths and what they entail. Using the questions above and the information relevant to the different careers you can then start to narrow down what you may enjoy doing and have success in. For a good list of different CRE careers, check out this blog article by propertymetrics.com
In addition to this you’ll want to start to familiarize yourself relevant terms and info in real estate. Just about anything and everything you could ever want to learn is on YouTube these days. There are also several blogs and podcasts that have super helpful information. So, take some time to get familiar with basic concepts that are relevant to the field you are thinking about entering. Remember my example of not knowing a P&L from above? I was in a job interview for a property management position and was asked that by the person who would be my direct boss. I was honest and said no. Big mistake! A P&L or a profit and loss statement, as I quickly realized after I left the meeting, is one of most fundamental principles to property management and accounting that there is! Trust me, you don't want to be me in that situation. Make sure you study.
PUT YOURSELF OUT THERE
Once you’ve identified why you’re getting into CRE and have a good idea of a few areas you’d like to explore, reach out to everyone you know who is in CRE and tell them you’re interested in what they do. Can you buy them a cup of coffee or better yet, shadow them for a few hours? Note – buying coffee doesn’t always work, but most people are willing to help others, especially if you are friends of theirs or friends of an acquaintance. This step will be extremely important especially if you have no business background and are trying to make a huge career change. Keep in mind when you are going through this exercise it may push you and make you feel uncomfortable. GOOD! One of my mentors always says, in order to grow, you need to get comfortable being uncomfortable.
Next, look at job postings for commercial real estate and apply. Reach out to the hiring managers and call them directly. Have conversations with them and start to just make progress. When I was looking at jumping into the industry, I was really interested in becoming a commercial broker right out of the gate. Soon I found out how they got paid and realized I had to put that on hold. However, Marcus and Millichap used to have open broker night. Anyone was invited to attend, and they would give a presentation on their business model and an overview of their company. They were recruiting fresh meat. I ended up going to two other firms that were doing this as well. I'm not sure if this is still common, but back then in San Francisco it was. And let me tell you – coming from a teaching career to this was it a bit uncomfortable! The important thing was that it got me in the right mindset, meeting the right people and starting to talk the talk. This is huge for gaining momentum.
The other thing to remember is that real estate, by and large is a people business. If you are uncomfortable reaching out to people you don’t know, it’s time to get over it. The more you do it, the easier it will get. If you can’t seem to get over it that doesn’t mean you have to abandon ship, but you might be a better fit for a supporting role in real estate, such as an analyst or researcher.
The last and final step while starting out your commercial real estate journey is to join some organizations in the field. There are several and again, depending on what field or role you are in, there are certain ones you’ll want to be a part of more than others. Some popular ones are Urban Land Institute (ULI), Buildings Owners and Managers Association (BOMA), Institute of Real Estate Management (IREM) and National Multi Housing Council (NMHC).
Some more practical, knowledge-based organizations are also available if you are in the fields of property management or the investment side of commercial real estate. These include RPA (Real Property Administrator) or CPM (Certified Property Manager) designations for commercial management. Or, if you work on the analyst or underwriting side of commercial real estate, you’ll want to focus on something like a Certified Commercial Investment Member (CCIM) designation, which explores all aspects of the financial side of investment in CRE. You can find a comprehensive list to the many organizations here.
Joining Organizations in your respective field is important as there are many benefits to be a member. These include meeting colleagues and networking within your industry, educational events to keep up on the latest happenings in the field and continual exposure to the commercial real estate fabric of your city. Most, importantly they will expose you to different ways of thinking and provide you with constant learning and thinking about your field in different ways.
Commercial Real Estate is one of the most rewarding careers, both in terms of the impact you can have on shaping your city or town and for the people that you encounter working in the field. There are numerous other benefits to working in this industry, including the financial aspects in some roles as well. The field is continuing to evolve and change with new technology and it’s important that young people continue to enter the field. There is a significant amount of baby boomers who make up most of the demographic in commercial real estate and at some point, a lot of these people are going to retire.
So, if you are on the fence, I urge you to strongly consider it. You’ll soon see why it’s such an exciting industry.