Commercial 101: What Every Residential Agent Should Know
EMC Weekly Agent Power Hour Recap with Karl Markarian
Commercial real estate might seem like an entirely different world from residential, but the opportunities could be closer than you think.
In this Every Move Collective Agent Power Hour with Karl Markarian, Founder & Advisor SVP of One West Group | eXp Commercial, for a practical conversation about what residential agents should know about commercial real estate, how to recognize opportunities within their existing networks, and how collaboration can help them grow their businesses.
With more than 30 years of experience across real estate development, brokerage, investment, and international markets, Karl shared lessons from his career and answered questions from agents about commercial transactions, client relationships, investment opportunities, and the differences between residential and commercial real estate.
Here's a recap of the key takeaways from the session.
1. From Residential to Commercial: Why There's an Opportunity
One of the central ideas of this conversation was that residential agents may already know people who own commercial real estate.
As Colby pointed out during the session, people who own commercial properties also live in homes. Residential agents already work with homeowners, investors, business owners, and families who may have commercial real estate interests of their own.
That creates an opportunity to provide more value to clients by recognizing when a conversation could lead to a commercial transaction.
You don't necessarily need to become a commercial specialist to start recognizing these opportunities. You can build your awareness, ask better questions, and develop relationships with experienced commercial professionals who can help when a client's needs extend beyond residential real estate.
The takeaway: Don't assume your work with a client ends at the residential transaction. Their broader real estate goals may open the door to another conversation.
2. Karl Markarian's Journey Through Real Estate
Karl's career began in Toronto, Canada, in 1991, when he was 19 years old. He entered the industry through real estate development, working alongside his father on approximately 14 ground-up developments, including luxury homes.
He later obtained his real estate license and became involved in brokerage, development, and syndications.
In 2001, Karl moved to Dubai, where he invested in the market and opened two RE/MAX offices, one in Dubai and another in Abu Dhabi. His work included brokerage, development, and investment activities.
After moving to Los Angeles, Karl faced a new challenge: rebuilding his network in an unfamiliar market. Despite his years of experience, he needed to establish new relationships, build a new database, and develop a new sphere of influence.
Today, Karl leads a team of 64 agents across the United States and works with clients across multiple commercial asset classes.
His story highlighted an important lesson for agents at every stage of their careers: experience matters, but so does the willingness to adapt, learn, take calculated risks, and build relationships in new markets.
3. Understanding the Differences Between Residential and Commercial Real Estate
Commercial real estate operates differently from residential real estate, and understanding those differences is an important first step for agents who want to recognize potential opportunities.
During the discussion, Karl explained that commercial real estate does not operate with the same standardized MLS structure familiar to many residential agents. Commercial properties are often marketed through specialized platforms and professional networks.
The conversation included LoopNet, a platform used to market commercial properties, and CoStar, which owns LoopNet.
Commercial opportunities can also involve different property types, investment structures, financial considerations, and transaction processes.
Rather than assuming the residential process translates directly to commercial, agents should take the time to understand the basics and work with professionals who specialize in the relevant asset class.
The takeaway: Commercial real estate has its own terminology, resources, and processes. Learning the fundamentals helps residential agents recognize opportunities and make better introductions.
4. Recognizing Commercial Opportunities in Your Existing Database
One of the most actionable lessons from the session was the importance of asking questions.
Residential agents already have relationships with people who may own businesses, investment properties, retail buildings, or other commercial assets. However, those opportunities can go unnoticed when agents focus only on their clients' immediate residential needs.
Karl encouraged agents to consider asking clients whether they or their families own commercial buildings or are interested in acquiring commercial property.
The conversation also emphasized the value of understanding a client's longer-term goals, including building wealth and creating assets that can benefit future generations.
You don't have to know every answer yourself. Recognizing a possible opportunity and connecting the client with the right specialist can be a valuable service.
A few questions to consider incorporating into client conversations include:
Do you or your family own any commercial real estate?
Have you ever considered investing in commercial property?
Are you interested in expanding your real estate portfolio?
Would you like to explore opportunities beyond residential real estate?
These questions can help open conversations without requiring you to position yourself as a commercial expert.
5. Know When to Refer and When to Partner
Identifying a commercial opportunity is only part of the process. The next step is determining how to help the client move forward.
Throughout the session, Karl and Colby discussed the importance of collaboration between residential agents and commercial specialists.
A residential agent may already have the client's trust and understand their goals. A commercial professional can contribute the specialized knowledge and experience needed to evaluate and pursue the opportunity.
Depending on the situation, that may mean referring the client to a commercial specialist or exploring a partnership.
Karl also stressed the importance of pre-qualifying clients before bringing in a commercial professional.
Before making an introduction, agents should understand what the client is looking for, the type of property or investment involved, and whether the opportunity aligns with the specialist's area of focus.
For example, a client looking for a small space for a local business may have different needs from an investor seeking a larger commercial investment or a 1031 exchange.
Understanding those distinctions helps everyone use their time effectively and creates a more productive experience for the client.
The takeaway: You don't have to handle every transaction yourself. Knowing who to call, when to refer, and how to prepare a client for that introduction can make you a stronger resource.
6. Commercial Real Estate Specialization and Finding Opportunities
Karl also discussed the importance of specialization.
Commercial real estate encompasses a range of asset classes and investment opportunities. Developing expertise in a particular area can help agents better understand the clients, properties, and transactions they want to pursue.
The conversation touched on commercial investment sales, property research, business opportunities, and the importance of knowing the financial details behind a transaction.
Colby and Karl also discussed business brokering, where the opportunity may involve selling an operating business rather than simply selling the building or space it occupies.
For example, selling a laundromat may involve evaluating the business and its financial performance, not just the real estate.
This is another area where residential agents can benefit from partnerships. By identifying the client's needs and connecting with the right professional, agents can help uncover opportunities they might otherwise overlook.
7. Understanding Commercial Transactions, Investment Sales, and 1031 Exchanges
Commercial real estate transactions can involve financial structures that differ from those in residential sales.
During the session, Karl discussed investment sales and 1031 exchanges, along with how an investor might sell one property and pursue another investment.
The conversation illustrated how a single property sale can sometimes be part of a larger investment strategy rather than an isolated transaction.
Karl also discussed the potential for substantial commissions in certain commercial and business-brokerage transactions. However, the figures and fee structures he described were examples from the discussion, not universal commission standards.
For residential agents, the broader lesson is to understand the type of opportunity in front of you and recognize when a client may benefit from specialized guidance.
Commercial investment sales can involve complex financial considerations, so agents should avoid making assumptions about the value, structure, or outcome of a transaction without the appropriate expertise.
8. Commercial Deals Require Patience and Resilience
Another important topic was the time and uncertainty involved in commercial transactions.
Colby asked Karl whether commercial deals typically take longer than residential transactions. Karl shared an example of an $18 million land development transaction in downtown Los Angeles that took approximately nine months.
He also described how a transaction can progress through an extended process only to fall apart before closing.
His point was that commercial real estate requires patience, emotional discipline, and realistic expectations. A transaction that appears promising is not guaranteed to close, even after considerable time and effort.
For agents exploring commercial opportunities, this is an important consideration when planning their business and managing their expectations around future income.
The takeaway: Be persistent, stay grounded, and avoid treating a pending transaction as guaranteed income.
9. Commercial Market Conditions and Financing Considerations
The group also discussed the state of the commercial real estate market and how it differs from the residential market.
Karl explained that commercial real estate financing can involve different loan structures and terms. Unlike the familiar long-term residential mortgage, commercial loans may have shorter terms or maturities that require investors to plan ahead.
The conversation touched on maturing loans, financing considerations, and the potential opportunities and challenges investors may face as loans come due.
Karl acknowledged that commercial professionals can have different views on where the market is heading. The discussion reinforced the importance of evaluating individual properties, financing structures, and investment circumstances rather than assuming all commercial markets are performing the same way.
For residential agents, developing a basic understanding of these considerations can help them recognize when a client's question requires a conversation with an experienced commercial professional.
10. Business Brokering: Looking Beyond the Building
The group explored another opportunity for agents: business brokering.
During a question-and-answer segment, an agent asked about helping a client interested in renting a dance studio. Later, the conversation turned to the sale of an operating business, using a laundromat as an example.
Colby highlighted an important distinction: a business sale may involve financial statements and the value of the operating business, not just the property where the business is located.
Karl explained that agents interested in business opportunities could benefit from partnering with commercial investment sales professionals when the transaction requires additional expertise.
This is another example of why asking questions and understanding the client's actual goals matter. A request that initially sounds like a real estate transaction may involve a business, a lease, an investment, or a combination of these.
11. International Real Estate and Recognizing Opportunities Beyond Your Market
Karl's experience extends beyond the United States, and he shared examples of his investments and real estate activities abroad.
He discussed his experience in Dubai, his property investments in Spain, a home he is building in Portugal, and other international business ventures.
When Dylan Casoria asked about buying property in Spain, Karl spoke about the country's appeal to international buyers and shared his perspective on the lifestyle and investment opportunities that attracted him there.
The discussion illustrated how real estate opportunities can cross borders and how relationships can help agents connect clients with resources in unfamiliar markets.
For agents, the lesson isn't that every client should invest internationally. It's that understanding a client's broader interests and having a network of trusted professionals can help you identify the right resources when their goals extend beyond your local market.
12. Relationships and Authenticity Still Matter
Toward the end of the session, Karl shared his thoughts on technology, content, and building genuine relationships.
He explained that he regularly writes articles for his Substack, Empower, Elevate, Excel, using ideas and technology as tools while emphasizing the importance of his own perspective and experiences.
His message was simple: Be genuine. Be real.
Technology can help professionals work more efficiently and generate ideas, but authentic communication and meaningful relationships remain essential to building trust.
For real estate agents, this connects directly to the earlier discussion about commercial opportunities. Clients are more likely to turn to professionals they know and trust, and those relationships can create opportunities that might not emerge from a transaction-focused approach alone.
Karl also shared plans to host Taco Tuesdays in the Los Angeles area beginning in 2027, bringing together title representatives, lenders, and agents to encourage networking and collaboration.
The initiative reflects a recurring theme throughout the conversation: business growth is supported by showing up, building relationships, and creating opportunities for people to connect.
Key Takeaways for Residential Agents
If there's one overarching lesson from this EMC Weekly Agent Power Hour, it's that commercial real estate doesn't have to be outside your world simply because you work primarily in residential real estate.
Here are a few practical ways to put the conversation into action:
Ask better questions. Learn more about your clients' businesses, investments, and long-term real estate goals.
Look for opportunities within your network. Existing clients and their families may have commercial interests you haven't explored.
Learn the fundamentals. Become familiar with commercial terminology, property types, and the differences between residential and commercial transactions.
Build relationships with specialists. Know whom to contact when a client needs commercial expertise.
Pre-qualify before making introductions. Understand the client's needs and goals before connecting them with a specialist.
Know your limits. You don't need to become an expert in every asset class to recognize an opportunity and help your client find the right resource.
Stay patient and authentic. Commercial transactions can take time, and strong relationships remain valuable throughout the process.
You don't need to know everything about commercial real estate to start recognizing where it fits into your business. Sometimes, the first step is simply asking a question and knowing who to call next.
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