The First Steps To Getting Into Commercial Real Estate

These are some of the more common types of commercial real estate you’re likely to encounter.

• Office buildings: Office buildings are commercial properties that have been designed specifically for office use. These buildings range from low-rise buildings to high-rise skyscrapers.
• Retail properties: Retail properties are commercial spaces that are mostly used to sell products and services. These properties include malls, shopping centers, strip malls, standalone retail stores/shops, restaurants, banks, salons, and others.
• Industrial properties: Industrial properties are commercial buildings built for manufacturing, production, distribution, storage, and logistics operations. They include warehouses, distribution centers, flex buildings, research and development facilities, data centers, and other specialized industrial buildings.
• Multifamily residential properties: A multifamily property is a specialized residential rental property that contains multiple housing units within one building, such as an apartment, condominium, townhouse, or duplex. These types of properties generate income via rent payments from the tenants who occupy them.
• Special purpose properties: Special purpose properties are commercial properties designed for specific uses. They can be hotels, resorts, casinos, self-storage facilities, student housing, senior housing, medical office buildings, sports arenas, theaters, and more.
• Mixed-use properties: A mixed-use property combines various property types into a single complex. The result is a building that offers multiple spaces that can be used for different purposes, all within the same structure.
• Hotels: Hotels are properties that are constructed and used for lodging guests. They range from boutique hotels to large-scale resorts.
• Medical office buildings: Medical office buildings are specifically designed and leased to healthcare providers. These buildings are tailored to meet the unique needs of healthcare professionals and patients.

• Education: Pursuing and obtaining a degree in finance, economics, business administration, or real estate provides a solid foundation for breaking into the commercial real estate business. Make sure you stay updated on recent trends and new knowledge through seminars, workshops, and certifications like CCIM (Certified Commercial Investment Member) or SIOR (Society of Industrial and Office Realtors).
• Experience: Starting with entry-level roles in residential real estate, property management, or leasing makes sense. This will help you grasp the basics of real estate transactions. Internships with brokerages also tend to offer practical experience, exposure to industry practices, and networking opportunities.
• Networking: Prioritize attending industry events like conferences, trade shows, and local real estate association meetings. These events provide opportunities to meet professionals, potential clients, and even future mentors. You should also use LinkedIn and other social media platforms to connect with professionals in the field and join groups dedicated to commercial real estate.
• Skills: Financial analysis skills are crucial. Learn to analyze potential investments using common metrics like net operating income, cap rates, cash-on-cash returns, and internal rate of return. Negotiation is also a key skill. Practice negotiating lease terms, purchase agreements, and financing terms to maximize value for your future clients. Lastly, the ability to perform market research is also essential. Be able to understand demographic trends, economic indicators, and local zoning laws that affect commercial real estate.
• Specialization: Choose a niche and stick to it, at least while you’re starting out. Focus on a specific property type. Specialization allows you to develop indispensable expertise that can help you differentiate yourself in the market.
• Licensing: Check your local regulations and find out if a real estate license is necessary for brokerage, property management, or sales roles. It is required in many jurisdictions but not everywhere.
• Finance knowledge: Learn about and understand specialized financing options like conventional mortgages, commercial loans, small business loans, and private equity financing. Familiarize yourself with financial terms and calculations that are most commonly used in commercial real estate transactions.
• Portfolio: As you gain experience and become more confident, begin managing properties for real clients. A solid portfolio will demonstrate your skills, track record, and ability to generate returns for investors.
• Patience: Success in commercial real estate requires patience as well as persistence. Real estate deals can take a lot of time to develop. Market conditions may fluctuate and affect your deals. Remember to stick to your goals no matter what happens and commit to keep learning from each experience.
• Mentorship: Seek out mentors who are already established professionals in the commercial real estate sector. A good mentor will provide valuable insights and guidance on career development and may also introduce you to their network.