How do CRE professionals (“agents”) get paid?
Commercial Real estate agents are typically paid a commission upon the signing of a lease. The commission is paid by the owner of the building and is typically paid one-half upon lease execution and one-half upon tenant occupancy. The commission is most often calculated as a percentage of the lease value and usually ranges between four and six percent. For example, if a tenant signs a 3-year lease for 2,000 square feet at $20 per SF per year, a 5% commission equals $6,000 (3 yrs x 2,000 SF x $20 x 5%). To further complicate matters, the agent’s Broker is the one that gets paid the commission. The Broker then pays a portion of the commission to the agent, depending on the agent’s split. Commission splits range anywhere from 50/50 (most common) to 90/10 in favor of the agent. Using the above example, the agent would receive anywhere from $3,000 to $5,400.
