Market Data
2004 Compensation Trends
By Jennifer Norbut |
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).
