Broker Retention in a Down Market
By Bob Scullin, CEO, SIOR
The “Great Recession” began officially in late 2007, and it hit the commercial real estate industry in the summer of 2008 when all indices tracking overall health of national and regional real estate dynamics started to nosedive. That nosedive would continue through the beginning of 2010 and have broad impact on every aspect of commercial real estate brokerage.
Nowhere was that impact more apparent than in the significant reduction in population of commercial real estate brokers nationwide. Brokers left the industry in droves as investment sales evaporated, leases became few and far between, and commission dollars dropped precipitously.
For example, within our own firm, our population of 207 brokers (as of July 2008) plummeted by 72 brokers who fell victim to the recession over the approximately 30-month economic downturn, ultimately reducing our pre-recession broker population to 135 professionals.
As market conditions remained less than favorable, we committed to continue providing exceptional services in a productive environment. By increasing our broker services platform through investments in social media, GIS mapping, online transaction management and powerful graphics capability, we were able to offer a unique alternative to commercial brokers considering joining NAI Capital.
Implementing an aggressive expansion of our technology platform (which many considered contrarian in a down market), expanding our marketing services, emphasizing our presence in 325 offices around the world through our affiliation with NAI Global, offering insightful global and regional market publications, and expanding broker education through NAI Capital College, we were able to distinguish our firm as an industry leader offering brokers a stable platform from which to service their clients.
By the end of the Great Recession our company’s broker population grew to 250 brokers, which represented an increase of 115 brokers. Our strategy of investing in enhanced broker services enabled us to increase our population of brokers by 21% during a period of historic economic decline.
Has your firm experienced the same drastic reduction in broker population? How have you responded to keep the brokers you have and add even more productive brokers?
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about 2 years ago
I joined NAI Capital in the Newport Beach office at the first of the year as a retail specialist. I have been with several fine brokerage houses over my years in the business, but I have not experienced the support and tools that NAI has to offer us. Our management promotes a positive attitude, takes interest in our business lives, and encourages us to take advantage of tools and techniques to improve our business. I have enjoyed the Sales Tips that are in my email. I plan to expand my teamwork with other professionals to team up on existing and new business. I couldn’t be happier that NAI allowed me to join you all. My only regret is that I didn’t make the move much earlier.
about 2 years ago
Jeffrey: we are together in our regret that you didn’t make the move much earlier, but happy that you are well settled into our family at NAI Capital. I am really happy that you are appreciative of the positive attitude of Brian Childs as your manager in the Orange County office. He is honestly concerned for the well-being and success of each broker in your office and can be counted on to help in any way he can. You have already experienced that kind of support and you can rest assured that it will always be there when you need it.
about 2 years ago
The great Recession is still lingering in our market of the Coachella Valley, but as we slowly recover there are three things that NAI Capital is doing to ensure we maximize each and every opportunity so we keep a full and strong office: 1. Sharing of best practices. We are a tenured office. We all have developed tools, and skills that are unique to us. We’ve learned that by sharing effective practices we can learn from each other. 2. Invest time in getting to know one another. We’ve progressed from an office that shows up to work only to one that spends at least one month in a social setting as a group. Due to this, there is more open conversation, more partnering on listings, and a willingness to help one another with things big and small. 3. We have committed to invest in us through training, seminars, and webinars. For us to maximize our results we must have the newest, and sharpest tools in the business.
about 2 years ago
Noel: you have perfectly distilled the concept of effective networking. Sometimes technology can distract brokers from the importance of maintaining good relationships, not only with their clients, but also with their peers. Good relations inside and outside the company with your fellow brokers is a good investment in the future. It certainly makes the job more fulfilling when you are able to interact with others on a personal level rather than on an adversarial level. You are headed in the right direction and thinking the right way. Keep on doing what you’re doing!
about 2 years ago
It has been a big advantage for me to start in the commercial real estate industry during the so called “economic downturn” or as some would call “the bad times” for these reasons:
1.) I use everyday as a learning experience and my office has become my very own classroom
2.) Senior brokers were less busy. This gave me the chance to talk to Teresia, Nick, John, Fred, Vicky, Brandon, David and other brokers in my office and learn from their many years of experience.
3.) I’ve heard over and over about this mythical time in commercial real estate; “the good times”. Some say your phone just rang off the hook and deals were being done left and right. This “economic downturn” gave me an opportunity to see the senior brokers and NAI Capital re-inventing themselves; and seeing many senior brokers going “back to basics”. This is what I call “the monkey see, monkey do” theory. I watch what successful brokers do and I copy them.
4.) I grew up in the technology era; I fully utilize new technology when marketing properties, seeking out new clients, and assisting existing clients. I am very fortunate to be a part of a company that understands that to be at the top you have to be 50 steps ahead of your competitor. I like that NAI Capital is working everyday to improve our technology, encouraging social networking, and constantly training us either through Capital College or by individual office. This helps us stay competitive in the market.
In conclusion I am very happy that I’ve landed at an “old” company with a “young” mind (innovative and ahead of the times).
about 2 years ago
Samantha: I read your comments with great interest because it provides us with great insight to understand that what we believe is reflected in the experience of brokers in all our offices. I could not agree more with everything you have to say.when an “old” company can involve into the future with a “young” mind we are all the better for sharing the youthful and enthusiastic perspective which propels us all with greater enthusiasm to accomplish our mutual goals. You can rest comparably that we intend to stay ahead of the pack and to provide everything you need to stay those 50 steps I had of your competitors.
about 2 years ago
Izzy: Welcome aboard. It is ironic that your first exposure to NAI Capital was a presentation on the importance of relationships in a brokerage practice. But without technology we are not able to leverage those relationships. Thus relationships coupled with technology are indispensable tools for success.
Shlomo: In our business there is no rest for the weary, therefore we must always increase the effectiveness of our brokerage by ongoing education and training.
Roger: Happy second anniversary at NAI Capital. We commit that we will continue to offer you the same level of excellence which brought you here in the first place. Now go out there and share the good news with other brokers and bring them out of the darkness and into the light. We can always make room for more good brokers like you.
Waleed: During the CEO Roadshow you learned the most important part of effective brokerage. There is no substitute for excellence of service to your clients. That is what creates promoters and multiplies the effectiveness of your efforts many times over.
Pat: With the downturn in the economy land brokerage has been a lost art over the past couple of years. But the markets are definitely turning around and this is about to be your time in the sun.
Tina: I disagree that you started in brokerage at the worst time. Brokers are successful when the market is on the way up as well as on the way down. When there is equilibrium the volume of transactions tapers off. You got on board at the perfect time to learn the business. Now is the time to put it all into practice. Best wishes for success as you earn what your hard work deserves.
about 2 years ago
Dan: That’s definitely our management philosophy, and I’m very happy that you see that in action. We are continuing to push the envelope moving more into social media and updating our infrastructure, so we’ll look forward to your reactions to those changes as we continue to improve!Bob
about 2 years ago
As technology enhances and expectations from our clients increase, agents will need support from their respective Brokers. The perfect recipe for success is hard work and determination but having the NAI Capital support has been the key essential ingredient for my success. Thanks Bob for literally signing me up and cant wait for the next CEO “Road Show”.
about 2 years ago
Bob
The class you gave was great, you are giving us tools to work, we woudnt have other wise.
Thanks again
Shlomo Shabtay
about 2 years ago
I came on with NAI Capital Newport Beach ( now NAI Orange County) in March of 2008. After 22 year in the industry working on Industrial, Retail and Office commercail properties I interviewed all the major houses. THe reputation, suport, and itegurty of NAI Capital keep rising to the top. After two months I signed my agreemetn and never looked back.
The support never got decreased though this economic down turn and people have been pure professionals. The brokers coming on board and senior brokers already in the firm have been amazing to deal with. Goerge Economos and I closed a sale 7 months into my first year, during the worst time in the market. I never had a CFO call me from a corporate office to thank me and congragulate me on the close until NAI. Thank you NAI for being here! Roger J,. Niez
about 2 years ago
Roger: I appreciate your recognizing that we never lowered our standards for providing support to our brokers, even when the economy was at its lowest. We take a long range view of the market and believe that the more we can support our brokers the better off we will all be in the long run. This is certainly not a short-run business so it makes great sense to approach the future as a marathon instead of a Sprint.
about 2 years ago
Thank You Bob for the last office meeting on Feb. 28th it was great, I learned a lot of things ….keep it up
about 2 years ago
Waleed: NAI Capital’s senior management firmly believes that there is value in interacting with brokers face-to-face regarding matters which are important to the broker’s. Anything that we can do to give you more tools to do your job better benefits all of us in the long run.I am happy that you agree with our approach.
about 2 years ago
I feel the same as Dan Bacani about the sincere effort from NAI Capital to help with continued growth and improvement to everyone in the Company. Technology and the Internet have changed the rules of the game, and I agree with Bob Scullin that if you don’t change with it, you’ll be left behind in the dust of those that do. As a land broker, its even more important for me.
about 2 years ago
Patrick: you make an excellent point about the need to change as the market evolves beneath your feet. As a lands broker it is indeed important for you to do whatever it takes to survive until that market returns. In any event, remember that they are not making any more land than exists today. Over time it can only get more scarce as well as more valuable. Keep the faith.
about 2 years ago
I started in March 2010, probably the worse time to start up a new business. NAI has been very supportive and helpful as I grow my business.
about 2 years ago
Tina: I fully understand your thinking that you picked the worst time to start a new business, but I honestly think that you need to consider one big element: brokers make money when the market is moving up or down. Since the market can only move up from where it has been during the recession, in that sense you started at the best of times. Only time will tell, but I think you will agree in the long run if you keep doing the things you’re doing to guarantee your personal success.
about 2 years ago
As one of the many brokers who were recruited by NAI Capital during the Great Recession, I have to say that it was refreshing to see a major firm so committed to seeing me enhance my personal wealth as a broker. Many companies in the CRE industry focus on squeezing every bit of production from their brokers through long hours and cutting back basic resources. At NAI Capital, I feel that it’s more about working smarter and taking advantage of the latest in technology and sharing best practices amongst peers. These are just a few reasons why I joined and continue to stay.
about 2 years ago
Dan: I think that you have a point that many companies focus on “squeezing every bit of production from their brokers,” but I think that is shortsighted on the part of the company. If the company plans on being around for a long time, as we do, it makes better sense to work with brokers to ensure the soundness of their business plans and to work with them to implement those plans with an eye towards the future rather than demands in the short run.