WASHINGTON (November 15, 2018) — Commercial real estate markets are on the rise, with Realtors® specializing in commercial real estate reporting both an increase in members' gross income and sales volume, according to the National Association of Realtors® 2018 Commercial Member Profile. Corresponding to tightened inventory conditions, sales transactions for NAR’s commercial members have slowly decreased in the last two years, down from eight in 2016 to seven in 2017.
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.
“The commercial real estate industry is strong and is on pace with the growing economy. Although there is a slight decrease in transactions, commercial professionals have reported improvements in their markets and business activity for consecutive years. Realtors® reported that sales volume and costs of sales increased this year, as well as median gross annual income,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota and broker at Edina Realty.
The median gross annual income for commercial members hit an all-time high of $150,700 in 2017, up from $120,900 in 2016. The median sales transaction volume in 2017, among members who had a transaction, was $3,870,500, an increase from the median sales volume of $3,500,000 in 2016. The median dollar value of sales has also steadily risen since 2013 to its peak of $602,500 for all commercial members in 2017, up from $543,500 in 2016.
The median gross leasing volume was $705,500 in 2017 for members who had a transaction, an increase from $538,500 in 2016.
Brokers and brokers’ associates reported the highest annual gross income of $186,900 and $139,700, respectively, while sales agents reported $104,600, an increase from $81,300. Commercial members with less than two years of experience reported a median annual income of $44,000 in 2017, up from $31,500 in 2016; and those with more than 26 years of experience reported a median annual income of $192,600 in 2017, up from $162,200 in 2016.
“Commercial real estate professionals are reporting great growth in the past year, which has convinced more and more members to enter the commercial industry. The economy is expanding along with tight labor market have boosted income for Realtors® in the commercial space,” said NAR Chief Economist Lawrence Yun.
Fifty-one percent of NAR’s commercial members worked in sales as their primary service area, followed by 16 percent in leasing and 12 percent in investment. Twenty-nine percent of NAR’s commercial members worked with commercial buildings, with 13 percent on multifamily structures, retail, and office space. Forty-nine percent of NAR’s commercial members were brokers, 29 percent licensed sales agents, 17 percent broker associates, and five percent were appraisers.
The median age of commercial members remained the same as last year, 60, while the median age for NAR’s commercial members with two years of experience or less was 46. Thirty percent were female, up from 27 percent in 2017 and 70 percent were male, down from 73 percent in 2017. Seventy-eight percent of commercial members worked at least 40 hours a week.
In August 2018, NAR invited a random sample of Realtors® with an interest in commercial real estate to fill complete an on-line survey. A total of 2,324 responses were received for an overall response rate of 3.8 percent. The confidence interval at a 95 percent level of confidence is +/-2.0 percent based on the share of commercial members. All information in this report is representative of member characteristics in 2018, while sales, lease transaction values, and income are characteristic of the 2017 calendar year.
The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.