The Skyscraper's the Limit
No bones about it, said Kevin Hanna: Working the kitchen grill at his grandfather’s steakhouse as a teenager helped him to launch a successful career in the real estate business.
Hanna, 36, has since traded in a greasy apron for a white shirt at Cushman & Wakefield of Massachusetts, Inc., a commercial real estate firm in Boston where he cooks up deals with some of area’s most cutting-edge companies.
He negotiates leases for retail, healthcare, high-tech, and other industries that are seeking office and industrial space in Boston and greater New England. He represents both landlords looking to market office and industrial space and tenants looking to relocate or expand.
“My experience at the restaurant taught me social skills, how to provide good service, and certainly a good work ethic. We often worked long hours,” said Hanna, who has been working for Cushman & Wakefield more than 12 years.
Like 80 percent of those in his profession, Hanna is paid in straight commission – cashing out only if he closes the deal – which makes commercial real estate brokerage a risky business. Without the security of a paycheck, brokers usually rely in their first years on a “draw,” or money paid in advance of future commissions.
Brokers cannot expect to make too much money in the first few years, Hanna said. It takes four to six months to complete a transaction, so a broker “needs to have a lot of irons in the fire to build up a book of business.”
Most brokerage houses split the profits 50-50 with the broker up to the first $350,000, with five percent increments to the broker as production increases throughout the year. The slate is wiped clean at the end of the year and returns to a 50-50 split.
After four or five years, brokers should be making at least $100,000, said Hanna, who has pulled down a salary in the high six figures for the last few years.
“It’s a great job because you really control your own destiny. Your income is directly related to your success in the business,” Hanna said. “The sky’s the limit.”
One of Hanna’s most interesting and successful deals was the Watertown Arsenal project, a historic, 200-year-old building near Boston that the U.S. government once used to build armaments. In 1998 he helped secure the rights to redevelop the space, which his firm now leases for a hefty $34 to $40 per square foot, excluding utility fees. Several clients now rent out about 200,000 square feet, for about $7 million in rent.
Brokers’ pay usually depends on market conditions, not years of work experience, said Al Marco, a partner in Joseph Chris Associates, a national recruiting firm in Chicago that specializes in placing commercial real estate executives. At the low end, a commercial-side broker like Hanna can expect to make between $70,000 and $100,000. In a successful year, he or she can pull down between $200,000 and $500,000, Marco said.
The risks of the commercial real estate business are certainly offset by financial rewards, and Hanna said he also appreciates the job flexibility and opportunities to go out and meet his clients. Although he works up to 60 hours a week, he spends some of that time away from the office, touring his clients’ conditions and trying to understand their corporate culture and what kind of office or industrial space they need to operate.
“You do something new every day, you’re constantly meeting new people,” Hanna said. “It’s a truly exciting business.”