In the line with the influx of new NAR members working in residential real estate from the 2016 Member Profile, NAR also saw a surge of members into its commercial ranks. While commercial members are a smaller subset of professionals in the industry, new entrants affected some of the demographics while other aspects of the industry remained unchanged from last year. We released the 2016 Commercial Member Profile highlighting the trends—let’s take a look at what’s new in field.
An increase in members into commercial real estate is evident with a jump in new NAR members that reported having less than two years of experience, which nearly doubled to nine percent in 2016 from five percent in 2015. In 2016, the median age of commercial members stayed the same at 60 years old. Primary and secondary specialties of members, hours worked per week, household composition, and education were also unchanged from last year.
On the other hand, new entrants affected the percent distribution of license types. Sales agents gained the most new members at 31 percent (up from 24 percent in 2015). Brokers dropped to 47 percent in 2016 (down from 59 percent), as did broker associates falling to 17 percent (down from 20 percent).
Income and years of experience was naturally brought down by the new entrants. The median gross annual income of commercial members was $108,800 in 2015. This is down from a six year high in 2014 at $126,900, yet is still higher than 2013 at $96,200. Commercial members typically have been in real estate 20 years, down from 25 years in 2015, and in commercial real estate for 15 years, down from 20 years in 2015.
Nevertheless, sales volumes continue to rise indicating a healthy commercial market. The median number of sales transactions fell slightly to nine in 2015 from 11 reported in 2014. Despite fewer transactions, the median annual sales transaction volume increased in 2015 to $2,931,000 from $2,916,700 in 2014. The annual median dollar value of sales also increased to $541,700 in 2015 up from $521,700 in 2014. The median lease transaction also increased in 2015 to $600,000 up from $500,000 in 2014, as did the median leasing dollar value gained in 2015 at $221,200 up from $203,800 in 2014.