How brokers and their clients can profit by realigning the commission structure.
Industrywide, commercial real estate brokers are compensated by
commission, usually based on a percentage of the sales price or a
percentage of the base rent for the initial term of the lease. Of
course, variations on these models exist. For example, brokers sometimes
receive per square foot compensation for the initial term of a lease.
However, many of these variations represent a distinction without a
difference, with millions of brokered transactions essentially based on
the same model. Although characterized as incentive-based compensation,
how does the prevailing commission structure adequately align the
interests of brokers with their clie