Broker Burnout

The pandemic’s disruption, widespread layoffs and the industry’s commission-based pay structure are together crushing the hopes and dreams of younger commercial real estate brokers. Many of them — including from the most prominent firms — are exiting the business as fast as they can. Meanwhile, desperate office owners in Washington, D.C., have turned to pleading with local officials for help as remote work persists and space sits empty.

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— Tom Acitelli, Co-Deputy Editor

Young Commercial Real Estate Brokers Feel the Burn of Layoffs, Pandemic

When the coronavirus pandemic swept through the world in March 2020, layoffs cut through commercial real estate. But while COVID-19 restrictions have largely been lifted in the U.S., brokerage firms are again tightening their belts amid an uncertain economic climate, putting pressure on young professionals to abandon an increasingly volatile, and less profitable, industry.For brokers who remember the office market of 2019, those relatively high occupancy rates and asking rents might seem like a far-off dream compared to now. Today’s concrete jungle remains marred by high availability rates and remote work, which threatens office property values nationally. Plus, a slowdown in deals driven by higher interest rates has pushed commercial brokerages like CBRE and JLL to cut staff while others re-evaluate their projected earnings. All in all, New York City’s commercial real estate brokers are starting to feel the walls close in.

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DC Office Landlords Want City's Help For Distressed Office Market

In a letter sent by the Federal City Council to Glen Lee, D.C.’s new chief financial officer, the economic development group asked that Lee’s office better explain how it is accounting for the level of distress facing the city’s office market, particularly since the latest D.C. budget included increased tax rates for commercial properties. Companies that signed the letter include Hines, Boston Properties, Brookfield, Trammell Crow, JBG Smith, Carr Properties, PRP, Akridge and Hoffman & Associates. In particular, the letter asks for more clarity on how the District determines key variables like cap rates for office buildings, and how it takes into account sales of distressed properties. While the letter doesn’t criticize District officials, it does unequivocally show the companies involved worry that D.C. policy makers don’t fully understand how distressed the office market really is, and it urges officials to meet with them to address the impending budget gap.

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