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NAR: Good things happening in commercial market

Commercial Realtors report an increase in annual gross income for the third year in a row, thanks to more transactions and highe

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WASHINGTON – May 24, 2013 – Commercial Realtors reported an increase in annual gross income for the third year in a row, according to the National Association of Realtors (NAR) 2013 Commercial Member Profile. Transactions and sales volume have also increased.

According to the study, median annual gross income for 2012 was $90,200, an increase from $86,000 in 2011 and its highest level since 2008. Brokers and appraisers reported the highest annual gross income while sales agents reported the lowest.

The study reflects Realtors who practice commercial real estate; these NAR members conduct all or part of their activity in commercial sales, leasing, brokerage and development for land, office and industrial space, multifamily and retail buildings, as well as property management.

“The commercial market is showing signs of improvement, which is reflected in the positive trends in income, transactions and sales volume reported by our Realtor commercial members,” says NAR President Gary Thomas. “There’s no doubt that commercial market improvements will help spur economic recovery and growth for our nation.”

• Commercial members completed a median of eight transactions in 2012, up from last year. The median sales volume also increased: $2,507,700. Brokers typically had higher sales transaction volumes than agents. The median dollar value of sales transactions was $433,600 and the median square footage 10,400.

• Similar to the median sales volume, the median lease transaction volume increased this year by more than $70,000 in 2012 to $476,400. Twenty-one percent of commercial members did not have a leasing transaction in 2012. The median dollar value of lease transactions was $169,100 and the median square footage 4,200.

• Commercial members who manage properties typically managed 40,000 square feet, representing 15 total spaces. They also typically managed 16,000 total office square feet, representing six total offices.

• 63 percent of commercial members said they derive more than half of their annual income from the real estate industry. Thirty percent of respondents did not derive any income from commercial real estate leasing in 2012. Only 32 percent derived at least half to all of their income from leasing property. A large percentage, 85 percent, earned at least some personal income from commercial real estate investments.

• Sixty percent of NAR’s commercial members are brokers. Licensed sales agents were the next largest segment at 25 percent. Most commercial members reported working in a local firm, and 58 percent work in an office with a mix of commercial and residential brokers and agents.

• Investment sales are the most popular business specialty. Identified by the highest proportion of members as their primary business specialty, investment sales was also the top ranked secondary specialty area. Land sales and retail leasing followed closely behind.

• The typical commercial member has been in commercial real estate for 15 years and involved in real estate in some capacity for 25 years. The median length of membership in NAR among commercial members was 17 years. With a median age of 59, commercial members are also predominately male. However, women are slowly coming into the business: 33 percent of those with two or fewer years’ experience are female, and sales agents have the largest representation of women with 29 percent.

The NAR 2013 Commercial Member Profile was based on a survey of 1,796 commercial practitioners. Income and transaction data are for 2012, while other data represent member characteristics in 2013.

The study is free and available online (login required) through NAR’s website. 
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