However, as a broker, I am seeing another kind of attrition among my colleagues. The attrition rate of brokers and other service providers in this down market is rarely discussed and not easy to quantify. Most brokers do not like speaking about the rate at which their counterparts are leaving the commercial real estate industry. But there is definitely a bright side to working with real estate professionals that are products of the attrition rate and faring well in this market.

It's no big secret that brokers are typically paid on commissions earned from sales. Therefore, when there are fewer sales, there are fewer commissions. And when there are fewer commissions to go around, people have a tough time maintaining a lifestyle or paying bills altogether. Some brokers just can't afford to be brokers anymore.

So what is a once-prolific real estate professional to do? The answer is simple: Hang in there.

While most brokers do not make as much money in down markets, some still do. Leasing brokers are a prime example, especially those representing tenants. With rates down, vacancy at abnormally high rates and landlords more apt to make a deal, tenants that are still in business are shuffling their spaces to more affordable locales and the brokers are there to facilitate the transaction.

However, let's discover more specific and critical data points that point to success, and downfall, of brokers in recessionary periods. The arduous and coveted Certified Commercial Investment Member (CCIM) designation has probably seen the smallest decrease in membership over the past year. Losing only 2% of its almost 10,000 members in this economy, CCIM could be used as a barometer for those truly committed to commercial real estate sales. With an increase of membership over the past five years of at least 17%, it could be said that those committed to professional commercial real estate services are still interested in the industry. Additionally, from January 2005 to October of this year, CCIM has enrolled over 85,000 people in its courses.

While statistics are helpful to determine trends, it is also important to qualify what commercial real estate professionals are experiencing. We have heard of entire brokerage firms closing in 2009 and seen layoffs beyond our comprehension. But do we know exactly what has happened to the people that were laid off on a day's notice? We hear from industry professionals that most of the seasoned brokers have easily found a new home. While it may take a little while for them to build their brand under a new umbrella, they have committed themselves to their profession.

However, like previously stated, some have left the business altogether. Without naming names, we have heard of commercial real estate investment sales brokers going to medical supply sales; we have heard of brokers going to copier sales; and we have even heard of brokers going to the restaurant industry.

Brokers are having a hard time remaining brokers, yet those that are sticking it out are experiencing less competition. Those people, the last ones standing, are those committed to an industry that isn't always good to them.

As an example of the effects the market is having on well-trained and ambitious professionals, highlighting one individual that optimizes the tone of the market is important. Keith Edwards, MBA, is a relative newcomer to commercial real estate, having been in the industry roughly six years. However, during his tenure, he has been considered a strong asset to two once-successful companies: a regional developer and a tenant-in-common syndicator.

Keith was part of dozens of transactions during his time at each position, but became a product of his environment. Laid off twice within 12 months, he has been looking for a new position for about a year.

When asked about his perception of commercial real estate, he states, "Having gone through a bankruptcy and being laid off two times within one year really changed my perception of the industry. I started to see the volatility and uncertainty that is part of commercial real estate. While I do like the business, I began to consider leaving to find something more stable. It was this understanding that really started to change my thinking of staying in commercial real estate."

Keith continued to express his desire to work in the industry but felt with the mass closures, layoffs and bankruptcies, he was competing for jobs with much more seasoned professionals. He continued, "Firms that were/are hiring seem to be looking for experienced (15 years or more) talent that they can hire at a discounted rate. While I have six years experience, many people with a lot more experience than me were looking for the same jobs."

Brokers are hardly the only group of service providers that are experiencing attrition in this market. Development firms started laying off people in 2007 and consolidating offices in order to weather the upcoming storm. While most are working on skeleton crews, some have been forced into drastic scenarios and closed their doors altogether.

Attorneys, once considered recession proof, have been forced to reduce salaries and lay off some of their staff in order to work under a business model that receives fewer fees. The easy money is gone and most likely wont come back for decades. That aspect in itself will deter many from staying in the business and will most likely detract from new professionals being motivated to enter the business. New graduates are finding that jobs are less prevalent in the field and are reallocating their academic credits to different interests in order to have a better chance of gaining employment.

A group of industry professionals got together in 1954 and started the Realty Foundation of New York. Its sole purpose is to help brokers when times are tough. Through anonymous grants, they help their colleagues get back on their feet. Maybe it's several months of mortgage payments, college scholarships for their kids or paying a tax bill that comes due, but the foundation is as busy as ever in this market.

From the 1950s to today, people know that brokerage is a necessary profession in the commercial real estate industry and is not always the easiest one to sustain. Keeping true professionals in the business, even in the hardest times, will benefit everyone as the market begins to take a positive turn.

What I am personally finding, as a broker, is that some of the slower times at the beginning of the year helped me formulate my strategies for the next several years. I knew that while I wasn't going to retire in the next six months, I was able to have more substantive conversations both with colleagues as well as future clients. I was able to take advantage of the phone not ringing every two minutes and actually engage in a meaningful conversation. Essentially, I was able to listen, learn and, in some cases, mentor.

With the national unemployment rate essentially at 10% and layoffs still occurring from large conglomerates to small local businesses, we can assume that there will be additional attrition in commercial real estate for the next year or two. So what are you ultimately left with and who is the last one standing?

Those that remain in the business, are dedicated to the field, are true professionals and realize that this is a difficult, complex and sophisticated industry are the people you want to work with now and into the future. They understand that every year, every quarter or every day will not be a windfall of cash. But they appreciate the long and established relationships that they generate over the years of providing the absolute best and most comprehensive services.

In essence, those real estate professionals that are still here and those committed to their field are who you should choose to work with for years to come. Because we all know those that were in it for the quick buck always had their eye on just that and not the long-term benefit of servicing their clients for extended periods.

The views expressed here are those of the author and not of ALM's Real Estate Media Group or its publications.

David Sobelman is executive vice president of Calkain Cos. in Tampa. He can be reached at dsobelman@calkain.com.

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Broker Attrition: Who's Left?

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