One of the least understood professions may be that of the commercial real estate broker.
Part of the difficulty lies in the breadth of the profession. Unlike residential real estate where almost 100 percent of agents make their living by selling homes, the commercial sector is a far broader tent.
Not only does “commercial” include many distinct business segments – manufacturing, warehousing, office buildings, medical, and retail (which itself seems to have infinite subsets), but leasing, buying, and selling as leased investments are all specialties of their own. Even investment sales of multi-family complexes – and for that matter, small portfolios of leased single-family homes – are commercial real estate endeavors. When you add those who specialize in land sales, with each commercial use requiring different knowledge bases, the profession seems almost impossible to distill into common categories.
Enter the skilled personality tester. Over the last 50 years, human resource specialists, aided by the advances in behavioral science, have come up with clever predictors of future behavior that have served most industries well in improving their placement of employees. The testing and profile analysis of new employees has given employers some reasonably effective tools in hiring appropriate people for definable functions.
It sounds great, but doesn’t work very well for commercial realtors.
What happens more often than not, unfortunately, is the old trial-and-error approach. Sure, all the tests are administered to a new, often young, hired apprentice. Resumes are checked and references are polled. Ultimately the rookie gets put into the fray. He or she gets all the nasty assignments, makes the endless cold calls, lives on little or nothing for a couple of years, and in the end, is either a rising star, a struggling and confused second-guesser of his own choice, or a dropout.
The rising stars follow a compass of their own to specialties and companies that fit their unique, particular new practice. And – like snowflakes, no two are alike.
So what does this all mean?
Looking at the commercial brokers in Cincinnati at least, there seems to be little correlation between inherent intelligence, work ethic, propensity to team, history of connected-ness, and success. There are those who make one wonder how they ever survive, those who excel year after year, and an equal number who are students of the market – who work tirelessly, who are well-liked and respected – and who make a decent living, but no more.
Why is this?
Enter the Jughead factor.
Dennis was one of 32 Bausch and Lomb scholars in the ‘60s who was the classic “book smart, but not common sense smart.” He had an uncanny resemblance to the Archie Andrews character Jughead, and was saddled for a lifetime with the nickname.
One summer Jughead, Rusty and I drove a VW beetle from our school in New York to the Stanford Research Institute in Palo Alto, CA, for a summer student engineering job. We arrived there bright-eyed and bushy tailed with no money but the promise of the job.
Unfortunately, our Stanford Research contact had been terminated –and there was no job.
The three of us wasted no time getting the first job we could find – that of selling encyclopedias door to door. We were trained quickly to convey the message, in those simpler times, that “we we’re doing market research.” For those surprisingly compliant homeowners who would let us in, we’d go on and on about why our company wasn’t having success with its advertising, and was trying a new technique – that of “placing” new sets of encyclopedias in “qualified” homes, for no charge – for good word-of-mouth advertising. Once we’d get them interested in the “free” set of books, we’d go through a qualification test – which, ultimately was best met by a family who would promise to keep the set “up-to-date” by buying the annual yearbook. It was a compelling sales pitch – but the families were paying in advance for the yearbooks – and in the end, paying a pretty hefty price to have the encyclopedias.
We went from town to town in Northern California, getting there in the trusty VW and fanning out individually. Rusty and I worked hard, with reasonable success – maybe two or three sets sold a week. Jughead, however, was setting the world on fire. He would sell one set every day before noon and keep on going. He was setting records – he hadn’t even thought of the money he was making – and we couldn’t figure out why he was doing so well.
One night we asked him how he did it – to which he replied, “it’s easy – we’re giving them away!” Rusty smirked, and said. “No, we’re not! That’s just the sales pitch. Are you kidding?”
Jughead got quiet. He was embarrassed. The best engineering student in our class really thought he was giving them away. It never occurred to him that he wouldn’t succeed in such a simple effort.
But after that night, he was never the same. He hardly sold any. He had lost the belief that made him the best.
Welcome to the Jughead factor: that intrinsic, unshakeable belief that you’ll succeed because you’re doing your customer a favor. He/she needs what you have. That’s the magic ingredient.
Those in the complex world of commercial real estate who succeed are those who drift toward the areas where they feel comfort in what they’re doing is truly needed; that their customers will be better by dealing with them.
Those who struggle and who fall by the wayside are those who have a voice like Rusty’s in their head saying that they’re selling something to a customer who doesn’t have a need and has to be sold.
I ran into Jughead years later, now successful, married, politically engaged, and in a big hurry to make me forget the old nickname. I guarantee you his success in life was in something he believed in – totally. That’s the secret sauce.
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About the author:
David Noonan, SIOR, CCIM, LEED AP is an industrial specialist and broker for Lakota Commercial Realty in West Chester, OH. He specializes in the sales and leasing of industrial properties, site search, property analysis and industrial investment.
You can contact Dave at: