Why Now May Be a Good Time for Residential Agents to Consider Commercial Real Estate

The best real estate professionals never stop learning. In fact, by continually pursuing education opportunities, these agents and brokers explore new facets of real estate, harness new skills that can benefit clients, and find new ways to stay productive and generate income.

One key way residential agents can expand their knowledge – and their business offerings – is by becoming proficient on the commercial side of real estate. Jeff Wright, industry coach and Broker/Owner of RE/MAX Right Choice in Connecticut, encourages residential agents to learn about the commercial real estate market – and how to turn their knowledge into ongoing business growth.

Q: What’s going on in the current commercial real estate market?

A: Like all markets, the commercial real estate market has areas that are doing well and areas that are challenged. Most of the current challenges are tied to the effects of the pandemic and to increases in interest rates. The pandemic created record-high office vacancies with a significant amount of the work force working from home, which remains true to this day.

Both residential and commercial real estate have been impacted by the rapid rise in interest rates. I believe the rate impact in commercial real estate is even greater than in residential because many commercial loans reset every five years. If someone purchased a commercial property when rates were significantly lower, they may have issues when their rate resets. In fact, it is possible that they may no longer qualify at the higher rate and may be forced to sell and/or lose significant equity.

The most important thing about any market is that opportunities change. As real estate professionals, we should have the knowledge and ability to shift when new opportunities arise.

Q: Why is it valuable for residential agents to explore commercial transactions?

A: Part of what attracted me to RE/MAX 26 years ago, and remains true today, is that RE/MAX is the brand for top producers – and for those who want to become top producers. This applies to both residential and commercial real estate.

Learning commercial real estate can be valuable for residential agents by:

• Adding income to their business while expanding their client base • Helping them feel more confident as a trusted advisor and true real estate market expert, not just a residential real estate market expert • Empowering them to be able to walk into any room where real estate is being discussed and confidently answer any residential or commercial real estate questions

Q: How can finding new streams of income – like expanding into commercial – help an agent through any type of market?

A: I believe one of the best strategies to combat market shifts is to make sure you always have a buffet line of income opportunities. If one aspect of the real estate market is challenged, you have other ways to keep producing.

I learned this the hard way early on in my 42-year career, and I vowed not to let that happen again. I then set out to be an A+ student in all aspects of real estate: residential, commercial, new construction, land, investment properties, REO, and more. That way when the residential market shifts – like it is now – I’m able to combat a drop in my residential income. My main goal is to be the trusted real estate advisor for all my clients’ real estate needs, not just their residential needs.

Q: Some real estate professionals believe they need to specialize in residential or commercial, but can’t do both effectively. Is this true?

A: I disagree. My career is a textbook example that both can be done at a high level – and by doing so, an agent has another possible revenue stream. Limiting oneself to just residential real estate could be hurting their overall earning potential, specifically with their existing residential clients who may have other real estate needs.

Q: You have a new course with RE/MAX University, “Commercial Real Estate for Residential REALTORS®.” Who can benefit from taking it? And, what skills can they expect to take away from it?

A: The “Commercial Real Estate for Residential REALTORS®” course is designed to provide a basic framework for selling and leasing commercial real estate. It’s for residential real estate agents seeking an income stream to supplement their current business.

The course lays out the foundational terminology, mathematics, and processes of the business. It uses specific case studies to provide a step-by-step look at four different types of commercial real estate transactions.

The course is a self-paced training program that includes a 400+ page course book, and all the math needed in a downloadable, plug-and-play Excel workbook. It also includes a 49-segment video series that provides additional context to the concepts covered in the course book. Whether you are a visual or auditory learner, we have distilled this information into bite-sized chunks to make learning simple.

Q: What other opportunities do you have for agents and brokers to partake in?

A: I’ve launched the Commercial Real Estate for Residential REALTORS® podcast, which will look at the foundational principles of commercial real estate through the lens of residential real estate agents. While its focus is to educate residential agents on commercial real estate, anyone who wants to brush up on the foundational principles of the industry will benefit as well. I will be interviewing agents who are successfully transacting both residential and commercial real estate, as well as experts from all areas of the commercial real estate industry (financing, land development, law, financing, and more). Plus, there will be segments around mindset, the power of belief, overcoming fear, and understanding what the most successful professionals do on an everyday basis.

Also, building upon the foundation of my Commercial Real Estate for Residential REALTORS® course, “The High-Risers Club” is designed to help members be more knowledgeable and confident around the most important aspects of commercial real estate. Live training takes place four times per month.

Each month, we take a deep dive into one specific commercial real estate topic. I believe the quickest and easiest way to succeed in commercial real estate is to learn all about it from those who have been highly successful in the industry.

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