Magazine article Journal of Property Management

Making the Switch: Moving from Residential to Commercial Real Estate Requires New Approach

Magazine article Journal of Property Management

Making the Switch: Moving from Residential to Commercial Real Estate Requires New Approach

Article excerpt

I was recently asked, "What is your first memorable experience in commercial real estate?"

Having been in the industry only two years, the query made me pause and consider my response. My current role centers on property management, so the answer wouldn't be closing my first big deal. And I don't have decades of experience in the industry, like some of my coworkers. That is when it hit me--my most memorable experience was, ironically, my lack of experience when first taking on this new endeavor.

I began my career with CB Richard Ellis, AMO[R], following two years working in multifamily leasing and management. Although I knew very little about commercial real estate, I already had built a strong foundation in multifamily leasing. I felt confident in my ability to transfer my knowledge and skills over to the commercial side. Yet, it was only a short while before my confidence was shaken.

In the real estate world, multifamily and commercial properties share a few basic similarities, including leasing a space to a client for a specific use and maintaining the property in an effort to retain current tenants and attract new ones. Excellent sales skills, knowledge of the product, knowing how and what to negotiate, and attention to customer service are also prerequisites for both aspects of the industry.

But there are some major differences and I found I needed to get up to speed quickly. For instance, closing a deal in multifamily property would typically involve a lease term of 12 months. That's a short commitment compared to the lease terms for commercial spaces that typically carry a minimum of five years, with some having as many as 30 years. …

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