What You Should Know Before Jumping to a Competitor Firm

It’s the rare broker who has stayed at their current firm for their entire career. As firms compete amid an increasingly tight race for talent, mul-tiple factors are typically at play for commercial real estate professionals looking to optimize both their compensation and their overall work experience. But seasoned brokers agree: before jumping ship, do your diligence about the company and what it is truly offering you.

When Michaelann Murphy joined STNL Development in November 2021, a major priority was ensuring interests were aligned—both hers and the firm’s. And now that’s she on the hiring side with the company as the company’s vice president of real estate development in the Tampa office, “that’s a key ingredient.”

“I want new members to join my team not only because we pay well, but also because we’re a great team that is committed to making sure everyone is valued. I want to enable my team to grow without limitation and that means grow in new roles and more pay. As STNL does well, the team does well too.”

‘CONSIDER EVERY POSSIBLE FACTOR’ BEFORE LEAVING For Michael Marks, now a managing director of capital markets at Cushman & Wakefield in Chicago, his own transition between competing firms was centered on competing for more iconic, larger assets than earlier in his career. Marks, who has now been at Cushman for nearly 11 years, was previously a vice president of investment sales at Marcus & Millichap’s retail division, a role he held for nearly a decade.

“My business partner and I elected to make a move from a firm that predominantly focused on private capital and investors to a firm which focused more on institutional capital and ownership,” he says. “The decision was tied to executing a business plan that had us ‘move up in weight class’ and compete for larger assets and within different air space than at the beginning of our career.”

Marks suggests that brokers looking to switch firms “consider every possible factor that could impact their happiness and long-term suc-cess” before jumping ship.

“While the devil may be in the details, it’s important they look at the big picture of where and how the move could affect the trajectory of their career,” Marks says. “Look deeply at the platform for communication and knowledge sharing, as well as the caliber of colleagues they will work alongside.”

THE POWER OF CULTURE “There are so many factors to consider from systems, tech, marketing, company ownership profile and financial health, but I think it really depends on where you are at in your career,” says Glenn Rudy, Senior Managing Director of Retail Capital Markets at Newmark. “Culture that aligns with your own personal brand is imperative regardless of tenure.”

“When you’re starting out, a recognizable firm that is financially healthy and offers quality support for up-and-comers and incentive fee structures are some factors to really understand,” Rudy says. “If well established, company brand and culture is even more important. Addi-tionally, the reputation of your would-be contemporary producers and willingness of the company to commit financially to major pursuits is incredibly important.”

James Chung, who left a global brokerage to start his own shop, The Econic Company in San Jose, in 2020, says a “disconnect with cul-ture” is often among the top reasons brokers leave firms, noting “it’s really at the top of the list most of the time.”

“That’s where there’s typically the biggest gap, and what propels folks to look elsewhere,” he says. “And what follows closely after that is the potential focus, or lack thereof, on a particular vertical. There may not be as many resources for a particular vertical that the broker may be looking for.”

“Culture is huge, and it’s the biggest thing a firm can offer,” says Brandon L. Singer, who launched retail advisory and brokerage firm MONA three years ago after lengthy stints at two large brokerages. “In my experience, the typical culture can be very competitive and sort of a ‘stab-each-other-in-the-back, try to get over the other guy’ situation. I wanted to be in a place where people enjoy being at work, and I want-ed to create that…if you can find a culture where you can grow and flourish, that’s the biggest thing in this day and age a brokerage can offer their agent.”

Courtney Auther Van Loo, an associate vice president at Phoenix Commercial Advisors, has switched firms twice in the past 18 years and said office culture, performance and reputation far outweighed compensation concerns when she made those transitions.

“My friends who took compensation over culture often found themselves unhappy and moving from firm to firm,” she says, noting that her first move — from Grubb & Ellis to Cassidy Turley — was to build her career and make a name for herself in growing the retail group at an-other large firm. The decision was a great one for her both personally and professionally, she says, as she was preparing to become a new mom and moved from a mostly all-male brokerage to a firm with many women who understood her new role. At the time, she’d been offered more money from another company for a role that would require more travel, “but it didn’t feel right at the time,” she says.

After growing professionally at another big firm (and two kids later), she decided to move to a much smaller retail specialty firm. When asked what drove the decision, Van Loo is direct and unequivocal.

“I saw how great their office culture was and how respected every broker at the firm was in the CRE community. I wanted to be a part of their continued growth,” she says. “I had never been into an office where the principals sat amongst the rest of the brokers in cubicles. There were no closed doors. It was a family—a place where you could be a professional and also discuss your child’s accomplishments the night before.”

AN ENTREPRENEURIAL APPROACH EMERGES Increasingly, brokers appear to be cutting their teeth at large brokerages before jumping to smaller boutiques, which often have a more be-spoke, startup feel. And many are launching their own shops, in what they describe as an entrepreneurial drive to speak more directly to clients’ needs and a changing environment.

“When you’re in a larger firm there’s just more bureaucracy,” Chung says. “In fairness, the larger you get, it becomes like the mili-tary—without process, there’s chaos. You actually need to have bureaucracy to keep things running in an organized fashion, whereas when you get into a smaller environment, especially one where you align with the ethos and culture, you can be more fleet-footed and nimble in how you do your business. You know the leader is going to do everything they can to make sure they address your needs efficiently and di-rectly.”

Chang says his decision to leave his last brokerage “wasn’t so much what they were or weren’t doing.” Rather, “it was simply knowing the way I wanted to run my business was different.”

“I adored the people at the company—they are people to this day I call friends and do business with,” he says. “My decision was more about me as an entrepreneur wanting to architect the second half of my career in a really original way.”

For Singer, the decision to open his own shop came after careful deliberation—and after being courted by other large brokerage firms that felt very similar. Singer spent time at two large brokerages before starting MONA in the midst of the pandemic.

“This time around, I wasn’t interested in going to another large competitor,” he says. “I really felt the larger firms were missing what was needed—agents got lost, and they were just another number in these huge conglomerates that are really top-heavy. I felt as though they were missing not only what the broker and agent needed, but what the client needed. I wasn’t really looking to jump to a big shop because I didn’t think a lot of those firms had the DNA and soul as to what was needed for this modern-day era of commercial real estate brokerage.”

Singer recommends brokers looking to jump “take a really hard look at the way firms are doing things,” particularly in terms of how clients are serviced.

“In my experience, I felt as if both landlords and tenants were not being serviced appropriately,” he says. “A lot of information and data and methods used in bigger shops are frankly old school and not geared toward the modern day, whether that’s how social media is used, how different types of marketing is deployed, or understanding new trends. And that’s not the way clients want to see things done.”

TEAM PLAYERS, MENTORSHIPS AND LIFESTYLE CHANGES

Gary Chou, a partner at Berkeley Capital Advisors, recommends examining a prospective firm’s culture, branding, and team dynamics as well.

“In today’s world, brokerage is increasingly becoming a team event,” Chao notes. “There’s always at least a handful of people working together, and that may not be working for you —so that’s an important consideration.”

Mentorship also matters. According to CREW Network’s most recent benchmark study in 2020, women in commercial real estate list the lack of a company mentor or sponsor as one of the top three barriers to their advancement in the industry. Just 56% of 2022 survey re-spondents said they had access to a mentor or sponsor in the last two years. And a recent survey of the industry by Deloitte recommends firms “empower people at all levels,” regardless of seniority and job function, noting that “employees increasingly want to know how their work contributes to company goals.”

When veteran retail broker Gene Spiegelman left the large brokerage where he’d spent a good portion of his career in 2018, “it was about a life change,” he says.

Spiegelman has been in the commercial real estate business since 1992 and spent 25 years on the corporate side of the business. Prior to joining RIPCO, he ran a successful team in a global firm’s retail services division and later served as the head of the platform, a role that saw him frequently flying around the country to the firm’s many offices.

“Half of my transition was based on me no longer being aligned with where the company was heading,” Spiegelman says. “I didn’t like the drive to go public. The company had changed. And having spent two years leading retail, my younger daughter was starting high school and I wanted to be home for those years. I wanted to stop traveling so much and to focus more on the core New York marketplace and on the investment side of the business.”

Joining boutique firm RIPCO in 2018 allowed Spiegelman the opportunity to shift to the investment and principal activity side of the business—and critically, it gave him an ownership stake. Spiegelman says he was drawn to the company’s “very strong market position” and reputation as a quality provider.

“In my prior role, I just couldn’t grow anymore,” he says. “And since I started at RIPCO we’ve grown from 60 brokers in June 2018 to 105 brokers at the end of 2022. It’s thrilling to be part of.”

Spiegelman encourages those considering a move to a competitor to look at whether they offer what he calls a competitive wraparound platform by paying for things like CoStar and LoopNet, providing full GIS mapping analytics, and making quality internal marketing teams available to all brokers. He prizes RIPCO’s “smaller environment, collaborative vibe and family feel,” noting that its brokers have the ability to invest in deals on the firm platforms and can bring deals to market they might find.

“Certainly that’s a very tangible wealth-building exercise over time,” he says.

THE ONGOING DEBATE OVER FLEX WORK

And, of course, there’s the issue of flexible working arrangements. In CREW Network’s most recent 2022 research survey, 70% of respond-ents said they favor working for a company with flexible work arrangements. And 37% said that if they had the choice of two equal offers, a company with flexible work arrangements would be more desirable than one that has equal pay but less flexibility.

According to the most recent CEL & Associates survey, slightly more than 60% of commercial real estate firms offer remote work, with 55.6% allowing flexible work options.

“Recruitment today is very different from recruitment pre-pandemic,” Yunia Lubega, Senior Director of Sales Recruiting (West) and Head of DEI at Marcus & Millichap, told CREW as part of the report. “Part of the challenge and opportunity is those seeking employment want more than a paycheck. They want the flexibility of working from home and coming into the office two to three days a week.”

With that said, however, economic headwinds may see a shift in leverage back toward the employer side when it comes to remote work arrangements.

“Going into next year it’s likely we’ll see a lot more uncertainty,” Chou says. “Some of the momentum or leverage employees had during Covid is going back toward the employer.”

Ultimately, the calculus around evaluating competing offers—and deciding whether to move at all—is a complicated one, and experts agree the process requires a steady hand and a firm idea of what matters to you.

“Commercial real estate has so many different career paths,” Spiegelman says. “There’s no one thing that drives people.”

What About The Money?

Commercial real estate is a numbers game — and structuring splits and compensation agreements are arguably one of the top ways to retain talent in a competitive market.

The problem for brokers who are contemplating leaving a firm: They often don’t think it through and instead make the decision emotionally, says Gary Chou, a partner at Berkeley Capital Advisors in Orange County, Calif. “Are you leaving because of compensation or your commission splits? That’s not a good reason to leave in and of itself.”

Splits Aren’t Necessarily Everything Chou, who started his career in the capital markets and retail groups at The Matthews Retail Group and Colliers, says brokers can usually negotiate a better split in their existing roles, but says he often sees them look for greener pastures without considering other fees their current company may be covering outside of straight compensation metrics.

“If you’re somewhere where you get a lower piece of the pie, they’ll often give you other intangibles — think sponsoring conferences for you, agency incentives, paying for Costar, and things like that,” he says. “If you go somewhere where you’re trying to get a 90/10 split, you’re not getting any of those things.

“So realistically you’re arguing about 10 to 15 percent. You’re not going to make a significant difference unless you’re literally changing the industry of the company you’re going to…people tend to go from a full-service lower split brokerage to a higher split firm, but then they aren’t happy because they didn’t think about the other stuff they’re giving up.”

According to James Chung, who left a global brokerage in 2020 to launch boutique shop The Econic Company in San Jose, brokers leaving larger firms tend to be at the senior level. Younger agents, he says, can really benefit from being in a larger environment and tend to stay put for a decent chunk of time.

“In the brokerage world, if you’re contemplating making a move two things are likely happening. One, you’re considering going to another large firm because you’re maybe unhappy with how the business runs wherever you are. And two, they’re offering you money,” he says. But “splits are not going to be that different regardless of where you are.

“The thing about aggressive splits is you are likely compromising resources and support,” Chung says. “If asked, I’d tell a bro-ker looking to move that they should go to a place with fair splits but where they’re ultimately being supported in every way they deserve to be supported.”

Brokers we surveyed also recommended against being wooed by offers that involve large up-front payments, which often require brokers to stay put for a number of years.

“A lot of the time, brokers make moves because compensation is dangled in their face — and a lot of the time it’s sort of fool’s good,” says Bran-don L. Singer, who left a large brokerage in 2020 to launch his own shop, retail advisory and brokerage firm MONA, in New York City. “Typically what happens is a broker signs a contract that’s a big up-front payment, and then they have to stick around for seven to ten years in order for that contract to be realized. People get lured by some big amount of money, but in reality it’s not that much — and then they’re stuck at the same place for a long time.”

Other Forms of Compensation

Other ways firms can structure comp include annual “deal credit” that can be used to invest in the company’s acquisitions, partic-ipating in a portion of the promoted interest when a property is sold, or taking a piece of acquisition or disposition fees. For those working in asset management, taking a percentage of leasing override fees is even an option.

“Within a commercial real estate firm, there are a lot of different ways to get paid, and many of these more unconventional ways end up being much more lucrative long-term than something like an up-front 5% increase in salary or bonus,” says Justin Kivel, founder of Break Into CRE. Kivel recommends backing up any negotiations over comp with data, pointing to the annual CEL & Associates compensation study as an excellent place to start.

Michael Marks, a managing director of retail capital markets at Cushman & Wakefield in Chicago, says compensation plays a “material role” in brokers’ decisions to jump firms, but notes that it can come in a variety of forms.

“Whether it’s an inducement bonus or more favorable splits or some type of equity in a larger enterprise it’s all considered comp,” Marks says. “Every commission-based intermediary faces similar limitations on time and resources so as their track record and credibility improve, so does their capacity to leverage expertise gained along the way in an effort to earn more. It’s compelling to consider compensation above and beyond what is generated in fee income.”

Michaelann Murphy, vice president of real estate development at STNL Development, recommends a similar approach, urging commercial real estate pros looking to make a move consider what she calls “the bigger picture” when negotiating with potential firms.

“Maybe they can’t get on board with a larger base salary but they’re willing to think outside the box on ways to add to your bo-nuses or commissions on a transactional basis,” she notes. “Be prepared to get into details on what you bring to the table to each project. If I can connect the extra benefit of hiring you for each project I work on, it’s easier to justify enhancing your compensa-tion.”

For more senior brokers, the conversation over comp could look different. According to Gene Spiegelman, a career commer-cial real estate executive who is now vice chairman and principal at RIPCO, the decision to jump to a competitor “is very much an economic conversation.”

“For someone at my level, the economics do matter, because when brokerages are looking to staff up retail groups they’ll pay for your revenue,” he says. “It becomes an economic deal. You’re looking at which company will pay you the most to bring you over, and what will they offer you to do that? What sort of platform do they have, and what sort of services are they going to offer you?”

About That Gender Pay Gap And then there’s the gender pay gap: according to CREW Network’s most recent benchmark study in 2020, the salary gap between men and women was about 10%, while the commission and bonus gap clocked in at a staggering 56%.

“The gender pay gap is unfortunately often true,” STNL Development’s Murphy notes.

Murphy also points to the “ownership gap” between men and women in commercial real estate, and recommends women look-ing to advance seek the option to invest in commercial properties as part of their overall compensation package.

“I cannot stress enough how important it is to get women investing in real estate,” Murphy says.

Of course Murphy pushes her entire team to become real estate investors. STNL offers the ability to invest in projects from an employee’s first day, and beyond those equity opportunities, members of leadership can be offered the opportunity to purchase an ownership stake in the company as a whole.

“It’s important that companies think about how to make that accessible to their employees,” she says.