Brokers that Survive a Difficult CRE Market Likely to be Better Professionals

Although turnover in commercial real estate is nothing new, the trend that became commonplace in 2020 with the onset of the COVID-19 pandemic has continued three years later. The combination of low office attendance and high interest rates has heightened challenges for the CRE sector with some companies in the industry going out of business as departures both voluntary and otherwise not only hit brokerage firms, but some lending platforms and construction firms as well. Many companies are moving forward with cost-cutting plans as transaction volume slowed when interest rates started rising. Several of the real estate industry’s larger brokerage firms have spent millions on severance and other employment-related costs. Heightened pressure on real estate has led to voluntary mass exists at some firms, particularly among the young brokers that find the market too difficult to continue and those near retirement age that decide they had enough, while others have taken advantage of the market slowdown and transitioned to different firms. It is anticipated by some industry people that although there’s probably going to be fewer CRE brokers in two years, there is “one major silver lining to a downturn: Those that stay will likely be better professionals because of the difficult market.”