Will More CRE Dealmakers Become Their Own Boss?
Brokers may get to scratch that entrepreneurial itch in '25.
Commercial real estate brokerage is a business for entrepreneurs. Even within larger firms, dealmakers are responsible for making their own fortunes. Such an environment also fosters large egos. Under current conditions, many of these egos are expected to strike out on their own.
At the beginning of 2025, CRE is like a boxer who has taken a few tough rounds but might have found a second wind. The cost of capital is higher-for-longer, but deal volume is ticking upward, at least for most areas and a good number of asset classes.
That sets the stage for CRE pros, and especially brokers, to form new ventures. This comes with some caveats, however. No one is predicting a gold-rush, but steady movement instead.
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For individual brokers, the 2023 and 2024 malaise meant depressed deal volume, less opportunity and less financial gain. On the other hand, harder times can make for bolder CRE entrepreneurs. That’s especially the case for those, such as brokers, whose rise or fall tends to depend on their own initiative.
“The best businesses are built in downturns, right?” quipped Johnny Noon, CRE director of engagement for the National Association of Realtors. He added that there’s less competition in such an environment, allowing those who are nimble enough to take advantage.
“Entrepreneurs know their markets and whether (or not) there is going to be a need for brokerage services or opening a franchise—whatever the climate,” added Noon, who has extensive experience in retail site selection, retail leasing, business development and store construction.
“They also ask: ‘Am I going to differentiate myself from the competition?’” said Noon. “What’s going to set me apart, and do I have the tools and resources available to me to be successful?”
Growing interest
Though no one tracks the number of pros hanging their own shingles each year, anecdotal evidence suggests that despite the softer conditions the less-than-robust conditions, some brokers will be heading out.
Noon reported that his organization services more than 180,000 members that are involved in CRE in some way or another, a total that has increased 16 percent over the last two years, even as the markets slumped.
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“We’re definitely seeing a lot more traction with people wanting to break into the business,” Noon said. “That has been happening despite a tighter market in terms of volume and what’s going on in the capital markets. But it’s also a different market. With all the tools and resources that are out there, I think the barriers to entry are a little bit lower now.”
The best businesses are built in downturns, right?
—Johnny Noon, Director of Engagement for CRE, National Association of Realtors
Compensation is a strong motivator when forming new brokerages and other CRE startups, according to Graham Beatty, president of Ferguson Partners. In its latest real estate hiring and compensation hiring survey, the firm found that modest salary increases are in the works in more CRE companies than not. Also, there are three times more firms looking to increase hiring in 2025 than there are planning reductions.
In the short term, compensation seems to be rising again, which would argue against startup formation. But the picture isn’t quite that simple.
“Oftentimes, at inflection points, you see executives make decisions around striking out on their own,” observed Beatty. “One of the inflection points that a lot of individuals are dealing with now is that the value of their long-term compensation has been negatively impacted by the last few years. Because of that impact, some of the golden handcuffs on executives have eroded.”
A generational cliff?
In its 2025 CRE outlook, Deloitte noted a somewhat surprising trend that could, in the long run, open opportunities for entrepreneurs. Namely, CRE is facing a retirement cliff. In the next decade, 40 percent of the U.S. workforce will reach the age of retirement. That means a new generation is going to take the reins.
Real estate companies should align with the expectations of the next generation and take steps now to fortify their talent pipelines, according to Deloitte. Millennials and Gen Zers—some of them anyway—will be every bit as interested in the potential rewards of running their own CRE businesses.
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CRE breeds entrepreneurs
Being an entrepreneur—in real estate or elsewhere—is often about more than money. The Ferguson findings, for example, hint that some employees are itching to go on their own.
More than half (58 percent) of respondents saw no change in voluntary turnover last year compared to 2023. However, 21 percent reported increases, with the same percentage finding decreases in voluntary turnover. The most cited reason for leaving was a lack of career mobility and professional development, the report noted.
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“It’s hard to be a non-entrepreneur and grow rapidly in this industry,” noted Collete English Dixon, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University in Chicago. So, in a real sense, unless the market is truly horrible—think 2009, for example—the entrepreneurial urge in CRE is hard to suppress.
Some of the golden handcuffs on executives have eroded.
—Graham Beatty, President, Ferguson Partners
“Even if you’re working for one of the big brokerage houses, you’re still an entrepreneur, because you’ve got to build a business. You get to use their name, but it’s your business that you’re building.”
The CRE entrepreneurial bent starts early, according to Alisa Pyszka, Barry Menashe Family executive director at the Center for Real Estate School of Business at Portland State University. Moreover, the skill sets for CRE success often closely align with those needed to run a business. This tends to facilitate entrepreneurial forays.
“What makes everyone excited about this industry is a love of problem solving, and never taking ‘no’ for an answer,” said Pyszka. “The problem to be solved is: How do you always get the ‘yes’? That’s a defining characteristic of people in this industry.”
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