WASHINGTON (July 28, 2016) – The median annual income and number of sales transactions of National Association of Realtors® commercial members decreased slightly as the number of new commercial members significantly increased in 2015, according to the 2016 NAR Commercial Member Profile.
The number of commercial members with less than two years of experience nearly doubled to 9 percent in 2016, from 5 percent in 2015. The annual study's results represent Realtors®, members of NAR, who conduct all or part of their business in commercial sales, leasing, brokerage and development for land, office and industrial space, multifamily and retail buildings, as well as property management.
"As the U.S. economy continues to experience strong, steady recovery, NAR has seen more and more members choose to specialize in commercial real estate," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "Realtors® who practice commercial real estate help build and improve the economies of our local communities, so as a community's commercial real estate market grows and improves so does the local economy."
The median years of experience in real estate dropped to 15 years in 2016 from 20 years in 2015, as did the median years of experience in commercial real estate, down from 25 years to 20 years.
The median gross annual income for commercial members in 2015 was $108,800, down from $126,900 in 2014. Brokers and appraisers reported the highest annual gross income at $145,800 and $130,800 respectively while sales agents reported the lowest at $$67,300, which is in line with last year's results. Those with less than two years of experience reported a median annual income of $43,400 in 2015, down from $67,200 in 2014; and those with more than 26 years of experience reported a median annual income of $165,385 in 2015, up from $162,800 in 2014.
"The slight drop in annual income appears to be associated with a substantial number of new commercial members entering the industry," said Lawrence Yun, NAR chief economist. "The report tells us that the more years of experience in commercial real estate a member has the more revenue they take in."
The increase in new commercial members has been predominately new sales agents and as a result led to a shift in license type. Forty-seven percent of NAR's members who practice commercial real estate are brokers, down from 59 percent last year, while licensed sales agents made up 31 percent of commercial members, up from 24 percent. Additionally, 17 percent of commercial members have a broker-associate license and 5 percent hold an appraisal license.
The median sales transaction volume among commercial members who had a transaction was $2,931,000 in 2015, an increase from $2,916,700 in 2014. Eight percent of commercial members reported not having a transaction at all, likely due to the influx of new members in commercial real estate.
Thirty-five percent of commercial members were involved in international transactions in 2015, up from 32 percent in 2014. Commercial sales agents had the most experience with foreign clients with 45 percent reporting an international transaction. Nineteen percent of all respondents saw an increase in international clients, while only 1 percent reported a decrease.
The median lease transaction volume in 2015 among members who reported at least one transaction was $600,000. While those members who manage properties typically managed 50,000 total square feet representing 17 total spaces in 2016, down from 75,000 square feet and 20 spaces managed in 2015. Those who manage offices typically manage 20,000 square feet representing five total spaces.
Forty percent of members who practice commercial real estate have a commercial designation. Twenty-seven percent of members have a designation with the CCIM Institute, 8 percent with the Institute of Real Estate Management, 7 percent are Certified International Property Specialists and 4 percent are Society of Industrial and Office Realtors®.
Seventy-three percent of commercial members are male, down from 75 percent in 2014, as more women continue to enter the industry. The median age remained the same as last year at 60 years old. Sixty-nine percent of members have a bachelors' degree or higher.
The 2016 NAR Commercial Member Profile was based on a survey of 2,048 members. Income and transaction data are for 2015, while other data represent member characteristics in 2016. Approximately 80,000 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 more than 1.1 million members involved in all aspects of the residential and commercial real estate industries.