When you work as an agent in commercial real estate sales and leasing, you have to be prepared to pay the price when it comes to building your listings, commissions, and market share. If you do not pay the price individually, you will grow personally poor very quickly. The costs in your career do not go away and you can only tolerate them for a short period of time.

Even in a tough market and with a newer salesperson, I would expect a deal of substance to be done inside the first 3 months of employment, and then every month thereafter. You do need to choose the deals that bring you the better properties and commissions. The better properties will generate enquiry that can be shared across other quality properties. One quality property of reasonable size and location is worth 10 average ones.

Everyone I come across that is new to the industry looks at the commissions that are available and thinks that they can make a lot of money fast; yes they can but they must pay the price. It takes about 2 or 3 weeks in the job before the ‘honeymoon period’ wears off and the reality sinks in. Hard work is required. It takes 6 to 12 months of hard work for the business and your market to take off. The earlier you get started on the hard work the better for you.

Property sales and leasing transactions do not normally come to you easily or ‘walk in the door’ of your office. You must make your market and you must build your market share; that’s the way it is. Clarity on your targets and action to achieve them are components of the future for any striving salesperson. » Read more: Paying the Price for Better Commercial Real Estate Market Share

A while back, a local school district requested that I submit a proposal on some excess property owned by the school district. The property was an elementary school which had recently been replaced on a new site. In researching the property, I discovered that the property was already listed by another commercial real estate firm and had been listed for some time.

The building was a one story elementary school and was probably 50 to 60 years old. The building was not well suited to other uses and it would even have some challenges for other parties to continue to use it for similar purposes. Given the probable costs to renovate the building, the building would not be competitive with other options. In other words, you could have probably built a brand new building to specifically suit your purpose less expensively than you could have bought and renovated this building.

Whatever value the property had was in the land. The land had several things going for it. It was about 10 acres, which was a good size parcel. It was fairly level and many of the utilities (gas, electricity, water and sewer) were obviously to the site.

The company which had the property listed at the time, had it listed around $250,000 per acre. Unfortunately, at that time, only 2 other parcels of land had ever sold for that much in the entire county. Both of those sales occurred at the top of the market before the beginning of the recession. Of the two parcels which had sold, one was in a large retail development at an Interstate Interchange with very high traffic counts, a good number of roof tops in the area and very high visibility. The other was a one acre hotel site at an Interstate Interchange with very high traffic counts and highway visibility.

Determining the value of the land would depend on the purpose you could reasonably expect the land to be used for. In this case, the land did not have enough traffic, population or visibility to be a good candidate for a retail use. For similar reasons, it probably would not be a great fit for office, either. It could possibly be used for single family residential, multifamily residential, or possibly industrial use. Of these possibilities, the best the school district could hope for was either multifamily or industrial use. Land for these purposes would probably sell in the $80,000 to $100,000 per acre range. » Read more: Commercial Land Analysis – Case Study