Market Data

2004 Compensation Trends

T he CCIM designees and candidates who responded to Commercial Investment Real Estate magazine's recent compensation survey provide a glimpse of their earning power in the industry.

The online survey, which was conducted in April, tracked 653 respondents' annual income, income by primary business activity, and method of compensation, among other factors. Highlights of the results follow.

Income Trends

Commercial real estate company owners/partners/principals have the most earning power of all respondents, recording a median of $175,000 personal gross real estate-related compensation last year. The second highest-grossing respondents are company vice presidents, who were paid approximately $139,000; brokers ranked third highest at $120,000. (See chart, "Income by Job Title.")

When comparing earnings by company size, solo commercial real estate practitioners are the highest paid, reporting $147,500 annually. Real estate pros in small companies (two to 10 employees) followed, with $130,000. (See chart, "Income by Company Size.")

Respondents who cited investment or development as their primary business activities lead the earnings pack with about $150,000 annually. Sales brokers, the largest group of respondents at 58.2 percent, fall in the middle of the compensation scale making about $137,000. Those who listed property management as their primary focus rounded out the low end of the scale with $102,500 in annual income. (See chart, "Income by Business Activity.")

The types of projects on which CCIMs and candidates spend their time also affect their compensation levels. For instance, those who spend the majority of their time on land projects reported the highest income, about $140,000 annually. Those who primarily work in multifamily earn about $125,500; those who focus on the office market earn $110,000. (See chart, "Income by Property Type.")

Compensation Methods

The overwhelming majority of respondents work on transaction-based activities (77.6 percent) versus consulting-based projects (7.3 percent). The median number of commercial real estate transactions respondents completed last year is 15.

In addition, almost 55 percent of transaction-based respondents depend solely on commissions, while 14.8 percent earn base salaries combined with commissions. (See chart, "Method of Compensation.")

Approximately 68.4 percent of commission-based respondents say their companies have established commission rates for transactions. However, 37.6 percent of CCIMs and candidates surveyed say commissions are based on transaction value. About 10 percent say their companies use other methods to determine commissions.

Of the respondents who are compensated in a fee-for-service manner, most report that fees are negotiated with clients.

Other Findings

Not surprisingly, respondents' income levels increase in concert with their years of experience in the commercial real estate industry. For the 24.5 percent of respondents who've been in the industry less than five years, the annual income is $80,000. Salaries jump to $130,000 for the 14.2 percent of professionals who've worked in commercial real estate between 11 and 15 years. The 11.7 percent of respondents who cite more than 25 years in the industry report the highest earnings of $155,500.

Market size also affects compensation. The 65.4 percent of CCIM and candidate respondents in markets greater than 500,000 people earn the most, with an income of $125,000. Interestingly, respondents in markets of 100,001 to 200,000 people earn slightly more ($108,000) than respondents in larger markets of 200,001 to 500,000 ($102,000).

Respondent Profile

Approximately 53 percent of survey respondents are CCIM designees; 47 percent are candidates. Respondents hold various job titles in their companies, including owner/ partner/principal (23 percent), agent (19 percent), broker (14 percent), vice president (13 percent), department manager/director (9 percent), president (4 percent), consultant (2 percent), and other (15 percent).

Jennifer Norbut

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