Commercial Real Estate Brokers

Goals

To find some examples of ways in which commercial real estate brokers generate revenue, in addition to charging a commission on the originated loan.

Early Findings

Commercial Real Estate Mortgage Broker Services

  • Friedman Real Estate, and other commercial real estate mortgage brokers, offer specialized marketing services that help their clients find the right buyers or tenants. These marketing services include the design of property fliers and print materials, email marketing, social media marketing, and copywriting services.
  • Commercial real estate mortgage brokers can supplement their primary income by referring their clients to other businesses, for which they earn a referral commission. For example, they can refer their clients to other brokers that are better positioned to meet their needs (perhaps they operate in a different geographical area). They can also refer lenders to lender aggregation services like C-Loans and earn a fixed fee every time that lender closes a deal. Additionally, they can refer clients who are interested in selling their businesses to companies like International Business Associates, which offers a 25% referral commission to commercial mortgage brokers.
  • Commercial real estate mortgage brokers are advised to learn how to underwrite loans so that they can expand their business to underwriting, in addition to brokering the loans.
  • Some commercial mortgage brokers like Clopton Capital offer specialized financing options. For example, Clopton Capital offers Debtor In Possession (DIP) financing to companies who are in chapter 11 bankruptcy reorganization. DIP financing can "help investors save their real estate value after all else fails".

Other Services in the Commercial Real Estate Space

  • Some commercial real estate mortgage brokers, like Friedman Real Estate, expand to provide other services in the commercial real estate space, generating revenue in the process. For example, Friedman also manages commercial real estate, for which it earns a management fee, it constructs and designs properties and assists with the design and set-up of telecommunications and information technology.
  • Companies that have started off as commercial real estate mortgage brokers can also expand into property construction and design, and even advisory services for commercial real estate. Those services include, but are not limited to, site inspections, market research, real estate tax appeals, property condition reports, environmental reports and energy management and property insurance and risk management.

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