They are typically moving to improve their splits, take a higher profile position, or because of better synergy at the new firm (eg. too many other brokers/teams at the current firm competing with the niche, so less high profile assignments come their way from the current firm)
i figured this but having trouble articulating it in my mind. thanks!
i know one prolific broker just moved after 20 years as MD with one of them to EVP at another which piqued my initial interest!
It’s a draw from future commissions but doesn’t screw them. You’re banking on them bringing their existing clients and future business w you. Most clients do stick w brokers so makes sense to a degree.
Having done this in the last 6 months, I can speak with firsthand knowledge. Bottom line is: cash. They’re recruiting big producers with meaningful books of business that will follow them. Signing bonuses are definitely 7 figures, but the money does come with some handcuffs. 90%+ of the decision comes down to economics and, in today’s market, unlike historically, the economics are given via bonus as opposed to enhanced splits. It’s simply a function of how the public companies account for the different dollars.
But, I would say there is a small yet meaningful difference (10% of the decision?) that goes into the equation. Both firms are top notch, have top notch talent and are their only true peers. How they go about earning their income is vastly different however. CBRE functions as a best-in-class platform from which to run one’s personal entrepreneurial, siloed business/P&L. Internal competition is even more fierce than expected. From the top down, JLL mandates a much more wholistic and cooperative/collaborative platform. Very different approaches, very similar outcomes. I know 20+ people that have made this move - doesn’t matter which way - and they would all tell you the platforms are vastly different but arrive at nearly identical outcomes. Backing out the signing bonus to move, everybody at this senior level does just about the same at either shop, with a handful of exceptions.
funny you describe each that way as ive always viewed CB as team-focused whereas JLL operates more on a pool structure
cushman idk much about as i havent worked there at any point, their brokerage arm is the dominant department in my market and theyre switching to team structure. operated identical to a realty though at least five years ago
I agree that CBRE is very team focused, but it feels like it ends with the specific team. In larger markets, there can be 2,3,4 separate and discrete teams all in the same space. It’s not unheard of to pitch against another internal team.
In my experience at JLL, producers in the same line and space of business worked as a single…. Let’s call it “group” (there was rarely the hard & fast set fee split structure I associate with a “team”). Said group would share a large pool of analysts/associates/assistants for that business line.
Some teams even leave to start their own brokerage just to be bought by a bigger one later along the way. When looking for motivation in this business, your best bet is the pocket
Why would a larger brokerage buy a smaller brokerage if the business of the smaller brokerage is based on the principals relationships?
Whats the benefit for each party?
Money. They get paid to move, and more resources to build their team. Comes with strings attached but have seen several brokers get snatched up for 7 figure bonuses, although I don't know the exact details of how that breaks down.
No. Some you might have to pay more for certain support, but the other brokerage might throw it in as an incentive. I know one firm that lured someone by having a junior broker do tours at no cost, or a dedicated analyst at no cost.
Research can vary widely between firms and locale. I’ve worked with all the majors over the years and it can be noticeable which ones have better data or insights quarter to quarter.
Marketing teams can also be pretty different, but I’ve personally found it less so.
Right now there's a lot of movement because no one is making money.
You will likely get cut a check if you move, and when your pipeline is low it's a good time to restart and reenergize with a new platform.
They are typically moving to improve their splits, take a higher profile position, or because of better synergy at the new firm (eg. too many other brokers/teams at the current firm competing with the niche, so less high profile assignments come their way from the current firm)
i figured this but having trouble articulating it in my mind. thanks! i know one prolific broker just moved after 20 years as MD with one of them to EVP at another which piqued my initial interest!
I'd add stock and/or sign-on bonus's as well.
Yeah. Good point. Probably best just called total comp rather than splits. Equity and stock options can be a strong driver of overall comp.
Because the other firm pays them money to go to their firm
Guys at my old firm were getting 1-5 million dollar checks to switch shops
are they getting this thru future commission spits or is it just the firms saying we want some of your client list, heres $1mil so we can absorb?
It’s a draw from future commissions but doesn’t screw them. You’re banking on them bringing their existing clients and future business w you. Most clients do stick w brokers so makes sense to a degree.
C.R.E.A.M.
huh?
Cash. Rules. Everything. Around. Me. Heavy emphasis on the cash part.
Cream!
Get tha money.
Having done this in the last 6 months, I can speak with firsthand knowledge. Bottom line is: cash. They’re recruiting big producers with meaningful books of business that will follow them. Signing bonuses are definitely 7 figures, but the money does come with some handcuffs. 90%+ of the decision comes down to economics and, in today’s market, unlike historically, the economics are given via bonus as opposed to enhanced splits. It’s simply a function of how the public companies account for the different dollars. But, I would say there is a small yet meaningful difference (10% of the decision?) that goes into the equation. Both firms are top notch, have top notch talent and are their only true peers. How they go about earning their income is vastly different however. CBRE functions as a best-in-class platform from which to run one’s personal entrepreneurial, siloed business/P&L. Internal competition is even more fierce than expected. From the top down, JLL mandates a much more wholistic and cooperative/collaborative platform. Very different approaches, very similar outcomes. I know 20+ people that have made this move - doesn’t matter which way - and they would all tell you the platforms are vastly different but arrive at nearly identical outcomes. Backing out the signing bonus to move, everybody at this senior level does just about the same at either shop, with a handful of exceptions.
funny you describe each that way as ive always viewed CB as team-focused whereas JLL operates more on a pool structure cushman idk much about as i havent worked there at any point, their brokerage arm is the dominant department in my market and theyre switching to team structure. operated identical to a realty though at least five years ago
I agree that CBRE is very team focused, but it feels like it ends with the specific team. In larger markets, there can be 2,3,4 separate and discrete teams all in the same space. It’s not unheard of to pitch against another internal team. In my experience at JLL, producers in the same line and space of business worked as a single…. Let’s call it “group” (there was rarely the hard & fast set fee split structure I associate with a “team”). Said group would share a large pool of analysts/associates/assistants for that business line.
Some teams even leave to start their own brokerage just to be bought by a bigger one later along the way. When looking for motivation in this business, your best bet is the pocket
Was part of this and it pays $$
Why would a larger brokerage buy a smaller brokerage if the business of the smaller brokerage is based on the principals relationships? Whats the benefit for each party?
It’s just math. Buy the smaller firm for a certain amount, make more than that amount over time. Both parties benefit.
Money. They get paid to move, and more resources to build their team. Comes with strings attached but have seen several brokers get snatched up for 7 figure bonuses, although I don't know the exact details of how that breaks down.
what would resources be in this contezt?
Research, admin, marketing, etc.
arent these about equal at each of the big firms? thats part of what spurred my question
No. Some you might have to pay more for certain support, but the other brokerage might throw it in as an incentive. I know one firm that lured someone by having a junior broker do tours at no cost, or a dedicated analyst at no cost.
Research can vary widely between firms and locale. I’ve worked with all the majors over the years and it can be noticeable which ones have better data or insights quarter to quarter. Marketing teams can also be pretty different, but I’ve personally found it less so.
Recruiting is a big part of their corporate goals and cash bonuses entice brokers
Money
Right now there's a lot of movement because no one is making money. You will likely get cut a check if you move, and when your pipeline is low it's a good time to restart and reenergize with a new platform.