Keller Williams plans South Florida commercial leap

Residential real estate firm Keller Williams wants to establish itself as a commercial presence in South Florida on a similar scale to its residential operations.

While Keller Williams’ commercial division won’t officially launch until February 2009, the firm is gearing up with recruiting efforts and training programs to allow the company to make the same impact in commercial real estate as it did in residential real estate.

Keller Williams is the fourth-largest residential real estate brokerage in North America.

“The commercial market is going through tough times, and there are a lot of commercial agents looking for an alternative platform,” said Buddy Norman, president of Keller Williams’ new commercial division. “We are building that platform and we’ll create synergy and referrals between the residential and commercial sides of our Keller Williams offices.”

The Keller Williams brand isn’t completely new to commercial investors, since the company hosts commercial brokers under its banner. But Keller Williams hasn’t offered its platform, which includes support, guidance, and training from the corporate offices, for commercial brokers.

About 300 commercial brokers hang their licenses with Keller Williams. Norman said the goal is to expand to 5,000 to 6,000 nationwide in the next two to four years. Keller Williams’ East Boca Raton market center is currently recruiting for five commercial broker spots.

“We have a proven process that works. We have the models, systems and tools. Now we just have to apply them to commercial real estate,” said Andrew Barbar, operating principal at Keller Williams’ East Boca Raton market center. “It will take some time to transition agents over and get our signs up, but it will happen.”

Despite confidence from Norman and Barbar, it remains to be seen how much progress Keller Williams will make towards its commercial real estate goals, especially in the down cycle.

It appears most brokers, the big and solid, are tightening their belts and looking to hone the skills they know the best and have excelled in, according to Janice Leis, an associate broker at Prudential Florida Realty in Boca Raton.

“My vote would be to hone residential,” Leis said. “The slow times are terrific to learn a business and its nuances, but is it the time to expand and venture into an area that is suffering most assuredly?”

Jack McCabe, principal of McCabe Research & Consulting in Deerfield Beach, doesn’t think so. Keller Williams, he said, is not known as a major player.

What’s more, he added, CB Richard Ellis, Cushman & Wakefield, Apartment Realty Advisors and Marcus & Millichap are well established in the local market with strong clienteles.

“It’s hard for me to picture Keller Williams being real competitive with the CB Richard Ellises – unless they can actively recruit some of the top brokers away from the large national firms,” McCabe said. “Just bringing in new, unproven brokers isn’t going to win the battle.”

As Michael Friedman, president of GL Commercial, a commercial development firm in Sunrise, sees it, Keller Williams may be able to woo some talent from competing brokerages – if the company can offer “a better career choice with a strong corporate support system, better financial opportunities and a good path of growth.”

Barbar said Keller Williams’ corporate culture fosters those goals. Agents are on a 70-30 split. Once agents reach their cap, they move to a 100 percent payout. Caps vary from office to office, but tend to run between $20,000 and $30,000. That means agents need only earn about $70,000 to $90,000 in gross commissions to be a profitable agent in the Keller Williams model.

“This is a great time for us to launch a commercial division simply because in times like this our business model will truly shine,” Barbar said. “We have the training and curriculum to help agents succeed, and our compensation and cap structure gives agents the ability to earn 100 percent commissions in addition to profit sharing. That’s very attractive.”

Barbar said Keller Williams’ corporate culture fosters those goals. Agents are on a 70-30 split. Once agents reach their cap, they move to a 100 percent payout. Caps vary from office to office, but tend to run between $20,000 and $30,000. That means agents need only earn about $70,000 to $90,000 in gross commissions to be a profitable agent in the Keller Williams model.

“This is a great time for us to launch a commercial division simply because in times like this our business model will truly shine,” Barbar said. “We have the training and curriculum to help agents succeed, and our compensation and cap structure gives agents the ability to earn 100 percent commissions in addition to profit sharing. That’s very attractive.”