Commercial Real Estate Layoffs Lead to Shifting Roles for Many Brokers


Over the last couple months, some of the largest commercial real estate brokerages in the U.S. have revealed that they will be laying off staff as a cost-cutting measure. The move was not particularly shocking, given the current economic climate. In fact, some in the industry predict that there will be more layoffs to come. For brokers in the competitive industry, continued layoffs could mean having to scramble to find a new position, shifting into a new focus, or looking outside the sector altogether. 

Two of the biggest firms, CBRE and JLL, are planning cuts to their workforce as part of wider measures to reduce capital expenditures. Recent earning calls shed light on how the companies are faring amidst rising interest rates and continued inflation. In its third quarter earnings call late last month, CBRE announced a $400 million cost-cutting plan, $300 million of which is slated to go toward permanent cuts, including layoffs. The decision came as the company’s global sales revenue dropped by 11 percent, with sales revenue in CBRE’s Americas region dropping by 16 percent. The majority of the cuts are expected to happen by the first quarter of 2023. Company leaders reported that CBRE’s mortgage origination revenue dropped 28 percent year-over-year, while the value of the loans originated fell 34 percent. Executives attributed the figures to an increasingly difficult lending environment. “Many capital sources have tightened underwriting standards considerably and set pricing at levels that are uneconomical for borrowers,” said Emma Giamartino, Global Group President, CFO & CIO at CBRE, in the call.

Earlier this week, news began to spread that layoffs had started to take place at JLL offices in New York City and Chicago. Two weeks earlier, JLL noted in its third quarter earnings report that it had spent $9.3 million over the quarter on severance costs, a jump from just $1.2 million spent during the same time period last year and up from $8.3 million in the prior quarter. “JLL is continuing with measures which were already underway to align our operational structure with our global transformation and reinforce our focus on managing costs,” the firm said in a statement. “These actions may include the difficult but necessary decision to make specific roles within our operation redundant. 

The other major publicly-traded brokerage firms—Newmark, Colliers and Marcus & Millichap—did not mention layoffs in their third quarter earnings calls, but they did experience declines in sales and lending activity and said they would look to reduce costs. A scan through Glassdoor job listings shows that JLL, CBRE, and Cushman & Wakefield all have between 1,500 and 2,000 open job postings. CBRE, a company with more than 100,000 employees worldwide, currently has about 30 job postings for brokers, most of which are intern positions. The other broker positions were posted more than 30 days ago. At JLL, which has an employee count of just under 100,000 globally, there are currently 17 job postings for broker positions, about half of which were posted within the last week. 

The lending community, especially on the residential side, has been getting battered by the major slowdown in the market as interest rates continue to rise. Rocket, a major non-bank mortgage lender, has made two rounds of job cuts in recent months, while small fintech firms Reali and Sprout shuttered altogether. The average production costs per loan hit a new high in 2022, as loan origination profitability decreased significantly. It’s a sharp turnaround from the past couple of years, when mortgage companies were on a hiring streak, bolstered by low interest rates and a surge in refinancing.

The impact of the layoffs on industry brokers will vary depending on their experience level. Commercial real estate veterans that have solid footing in the business and who may have even been through downturns before will find it easier to get through brokerage layoffs, but rookie brokers and students who are just starting their careers in commercial real estate will probably be impacted the most. 

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New York University adjunct assistant professor Robert Schoetz says that’s what he’s been seeing firsthand. Schoetz teaches students at NYU working toward a Master of Science in real estate finance and investment. Over the spring semester, he noticed more pessimism among his students he hadn’t seen before due to worsening market conditions. Some students who had already accepted offers for jobs they would start after graduating had their offers put on hold or rescinded all together, forcing them to go back to the drawing board. “Last year it was crazy, these firms were chomping at the bit for anyone who could run a spreadsheet,” said Schoetz. “Now it’s definitely slowed down.” With lending and origination roles disappearing, and many larger firms implementing hiring freezes within lending divisions, Schoetz is encouraging his students to look at positions in other areas of the business.

With loans coming due and some borrowers having trouble with refinancings, that’s where the need for workout agreement professionals comes in. Schoetz said he has already seen senior level banking professionals shifting to workout groups, and he expects more jobs will be opening up in that space. Asset management is considered a safe bet, and an area where there are currently more jobs available. Schoetz also pointed to more opportunistic roles as a possibility for commercial real estate professionals forced to shift their focus. Private equity firms, many flush with capital, will likely look to go on a buying spree once property prices hit certain lows, and that will create opportunities for rookie commercial real estate professionals to get their foot in the door. “That’s where people will go in the next six months, those private equity shops,” said Schoetz. 

As year end approaches, brokerage firms will have some big decisions to make about costs and staff, and there will likely be more layoffs. With another expected interest rate hike in December and most of the industry expecting a recession next year, brokers and other industry professionals should be prepared to shift to roles in the sector that might be in more demand, like workout groups or asset management, while those new to the industry may have to reevaluate their career paths, at least in the short term.



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Mike McNamara

Mike McNamara

A Las Vegas Realtor since 2008. Mike has a wide range of knowledge around all things Las Vegas.

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