In commercial real estate sales, the corporate clients in your area are good prospects for new business in any market and economy. They can afford the change of property in most markets and will look to change when the pressures of business dictate it. Owning the property that they occupy has advantages of controlled costs and controlled occupancy; they can make decisions for the business knowing that some landlord will not come along and change the goal-posts.
Corporate clients are a different type of client in that they are driven by business needs and are likely to have a head office or board of directors to report to or bring into the property decision. It pays to understand just how many of these prospects you may have in your area.
It is interesting to note that many agents and brokers mainly focus on property investors as prospects. Whilst this is part of what every agent can do, it does not need to stop there.
It is wise to open up your scope of prospects to include all those local businesses that own the property in which they are located, or may want to own local property. As the local property agent, you can be the person to help them.
So how do you start a program of tapping into the corporate businesses locally? You need a system that will keep you focused and organised on who they are and where they are. From that point onward you will need to know who the decision maker is in each case.
Here are some ideas to help you tap into the companies locally that may need property help.
Successful businesses will stand out in the area. They will have lots of activity, and perhaps lease or occupy prominent business locations.
Businesses of all types can be identified through the internet, yellow pages, business telephone book, and driving the streets. In a logical and methodical way you can tap into each business of relevance to your plan.
Look for pressures of expansion or contraction on a business by business basis. You have 3 categories of businesses given the property types that they occupy. Office, retail, and industrial property will call contain different businesses with opportunity; this then suggests that you have to be comfortable in crossing the boundaries of property types as part of your prospecting efforts.
Relocation pressures can also apply with some businesses. Look for those factors and tap into them.
It is a different world when it comes to prospecting companies and businesses. They have different triggers of decision and property change. A keen eye on the market and the local properties will help you find these high level prospects.
In commercial real estate you will be doing proposals for your clients and prospects on a regular basis. You would think that being asked to do a proposal is a good thing; in some ways it is, although many a prospect will ask you for a proposal simply to get rid of you. The hard truth of the matter is that many a prospect is going to use your proposal as a reason to choose another agent to sell or lease their property. Here are some tips from our Bulletin this week.
If a prospective client asks you for a proposal, and you are meeting with them when they ask the question, respond by saying something like this:
‘Why would you want that? Have I not been clear and helpful in the discussion here with you today? What is it that you need more information on?’
Top agents know that the best time to sign up the client is ‘now’; not at some later time when ‘they have had time to think about it’.
So the request for a proposal is actually a strategic way of not making a decision on the spot. What are the chances of agreeing to your proposal later when you give it to them? Probably it is no better than 20% in most cases.
If you do decide to create a proposal for the client, do so understanding that the client is genuine in the request and that you will not be wasting your time. A good proposal to sell or lease commercial real estate will include some or all of the following:
A clear statement of the clients requirements to sell or lease the property
A description of the property or the tenancy so that there is no misunderstanding in what is intended and what property it applies to.
A summary of other properties in the local area that are regarded as competing with the listed property. You will need to include a statement that describes the prices and rentals of those other properties.
A description of the local property market as it exists today, taking into account the factors of supply and demand.
The factors that will make the property relevant to the target market in the local area.
A marketing brief as to how the property should be taken to the target market. You will also need to supply samples of advertising and content that will apply to the property as you know it.
Expectations of price or rental given the prevailing market conditions.
A resume of issues that should be attended to before the property is taken to the market
A visual strategy to the process of moving forward. That can be a Pert or Gantt model that summarises the sale or lease process in stages
The list can be expanded subject to the prevailing market conditions and the property type. If you are going to do a proposal for the prospective client, then make sure it is a good one. First impressions are everything. Get some more tips in our Bulletin.
In commercial real estate agency it is common for the property owner to put you under some pressure to accept their price or rental in a listing situation. If you do that, you will commonly finish up with a listing that is over the mark or could contain errors. A listing with problems will not sell or rent well and can be on your books for a long time.
The key facts should always be known when you list commercial property. Investigate everything before you comment on price or rent. For example:
A lease in a property may be a positive or negative when it comes to the potential sale, and you will need to look at the lease to understand those facts before the listing is marketed.
The property itself may have issues of ownership or orders and notices that can impact the sale process. In all cases you should do a title search and a detailed property search at the local council before you complete the listing.
The improvements in a property may have compliance issues with the building codes, or orders may have been issued on the property for alterations to certain issues.
So the list can go on. Asking questions of the property owner is a good thing, but sometimes they do not have all the answers or know about the issues. For that reason you should ask for more time in the listing process.
Here is a checklist that can help you with some of the bigger concerns when listing a commercial or retail property today:
Get copies of the leases for the property and in the property so you know what impact they can have on the sale or lease process. Look at the critical dates in the leases in case they require response or action before the marketing of the property.
Notices and orders may have been issued on the property by the local council or building authority. The client should normally know about these things however a checking process at the local council will be a wise move.
Boundary issues relating to the borders between adjacent properties should be checked. That may require you to get a copy of the latest survey plans that apply to the area. If any questions appear regards boundaries, then the client should get a survey check done as required.
Property usage currently should comply with the existing tenancy or ownership. Property usage will or should comply with the requirements set out in the local zoning planning regulations.
Tenant lease issues can vary enormously from property to property and tenancy to tenancy. This says that you should be comfortable in reading and interpreting lease documentation. When in doubt see a good solicitor that understands the property type and the leasing process.
Outgoings and other property operating expenses will vary from property to property, although they should compare on average to other properties of similar type and size. This is where your local property knowledge is quite important in the listing phase.
Improvements in the property should be checked for relevance to the target market, building code compliance, and existing property usage. Look for any improvements that could require upgrade or refurbishment prior to the marketing process commencing.
This list can be expanded given the property location, the property type, and the improvements. It is best to have a questioning approach to the listing process so you can get issues and hurdles out of the way prior to the marketing process.
Not many agents and salespeople in commercial real estate have ever done a ‘secret shopper’ check on their competition. That being said, it is a very powerful tool and will give you lots of ideas to work with.
So exactly what is a ‘secret shopper’ in commercial real estate? It is the process of having someone call your competition agents and ask them for some details on a particular listing that they have. What it will tell you is this:
How timely they are in answering the telephone with property enquiries.
How they return calls to people that make enquiry.
Whether they ask the right questions of the person making the call.
How intelligent or otherwise they are in the call contact process.
What questions they do ask in finding out about the needs of the caller.
How they give out property information in follow-up to a call enquiry
Now this is not ‘rocket science’ and is a gathering of basic sales market intelligence. It is just so easy to do. You just need a friend that is suitably primed with the right information and questions to make a telephone enquiry on your competitors.
This process will give you an idea of just how effective your top competitors are. It will likely give you a good idea of their weaknesses as well.
To get the process started you will need to choose a few properties in the local area that are advertised publically. When the advert hits the paper or the internet, get your friend to make the enquiry of the other agent via telephone.
Here are some of the parameters to use in the process.
Give your friend making the call a list of the questions that are relevant to the property.
Give your friend a profile and an email for the information to be emailed to them.
Date and time of call
Length of call
Was the call answered the first time or did they have to leave a message?
If they left a message, how many days or hours did it take for the agent to get back to your friend?
Did they ask the following
Timing of need
Arrange for an inspection
Did they qualify your friend or was it a case of information overload and no connection?
You can add a lot more to this list. Importantly you will find out just who are the good agents and who are the poor ones. This process should be repeated every 6 months with the same top agents in your area; you will then know what you are up against and how you can improve.
When you work as a salesperson in commercial real estate, you really do need to build your personal profile in the local area. That profile needs to extend to property investors, business owners, property developers, and professionals associated with those groups. Here are some tips from our Newsletter.
To build your profile takes continual effort in a number of different ways. The most obvious ways to build your market share and profile would be through the following:
Direct connection with the key people that own significant property in the area
Meeting with the business owners that occupy significant properties and run significant businesses in the local area
Cold call prospecting and marketing on a daily basis throughout your precinct
Door knocking all of the local business proprietors.
Many salespeople overlook the value of the internet to their profile and business activity. Sure they may have some listings on the internet but rarely will a salesperson do anything more than that to lift their profile on the web. So there are some things that you can do here. Have a look at these:
You can write articles about property trends and types in your local area. What it does is it helps consolidate your name as a local expert. One of the best article sites to do this is www.ezinearticles.com
Create a personal business blog on either ‘Wordpress’ or ‘Blogger’. The blog process is free and will be yours to run and own. Everything you say is of your creation so be professional at all times. This blog process allows you to write about the area in which you operate and the property market. You could also talk about different ways of buying or renting commercial property today.
Use email newsletters with auto responders to connect with your clients. The cost of this is very low and initially you could get a free account with a newsletter service such as ‘Mailchimp’. They have templates and lots of instruction to help you get underway. You could set up an auto responder to connect with your clients monthly or more frequently. You can personalize the whole thing.
Social media tools today are numerous. Many of them are at no cost, but they do require you to take a strategic approach if the target of contact is commercial real estate. Initially the best to use would be Facebook, Linkedin, Twitter, and Googleplus.
So the opportunity here is for you to move to the top of your market with a great internet profile that is a combination of the listings that you have currently, but also these other very effective strategies.
Given that most of your competition will likely only do the Social Media part of the equation at best, there are many other things that you can do yourself to step up higher in the internet as a commercial property agent of relevance.
In this tougher commercial property market there are all sorts of pressures and hurdles to handle in agency on a daily basis as you look for the right prospects and deals. Importantly each and every day your system should take you forward a bit further towards the targets that you are chasing.
In saying that there are some really important observations that will help you understand the bigger issues and then help you get somewhere.
Many agents and salespeople have very little system. They do not do the right things every day and on that basis they struggle. They take each day as it comes. Very few salespeople have a personal business plan that they stick to and modify as they go through the year. That is a massive opportunity. You can quickly get past the competitors that have no base plan or focus.
Most towns and cities have elements of activity to tap into. You just need to know what to look for. If you can move from sales to leasing, you will always find property listings and business to tap into. On that basis become very versatile with the property services that you offer.
These two simple facts will set the scene for new business. Stop working for others and start working for yourself; when you really accept and understand that the process of new business comes from you personally, the doors to new listings and deals open very quickly. Property business is always out there; it is just a matter of what you can do about it. Stay away from any negative and poor performing salespeople in your team; you do not need to travel their road to destruction.
Self-belief is a wonderful thing; self-action is even more powerful. You need both to get somewhere in commercial real estate.
If you have not got a base plan for your working day, here is a simple one that works for some agents that I know. One of those agents earns 7 times more than anyone else in that office. Here is their plan:
Start the day on the telephone doing some prospecting. That means a time frame of about 2 hours that can take you through to 10:30 am in the morning.
Move all your meetings beyond 11:00 am every day.
Leave your paperwork to the time beyond 5:00 pm every day.
Get your of the office when and only when you have finished your prospecting.
Visit your territory and sales patch every day to meet new people and to door knock new businesses that you have not called on before.
These 5 simple things are not done by most salespeople every day. That shows just how easy it is to be better than the others that you compete against.
When the commercial property market gets tough or challenging it is a wakeup call to all those agents that have been neglecting the prospecting process and database creation. Let’s face it, the cycle of commercial real estate is about every 7 or 8 years in most towns and cities, and things change within that cycle. When you prepare for the dips and peaks, the business gets a bit easier for you.
When the property market slows it is critical that you have a database of relevance and accuracy. In only that way can you network the right people and segments of the market that need help or are potentially active.
So this knowledge and experience comes with time; and over the years you will see many changes going on in sales, leasing and property management. As the changes occur we must match our focus to the trends and needs of those players that are active or want to be.
Here are some tips for agents in working a challenging property market:
Take time every day to get out into the streets and precincts that contain the businesses that are active. Talk to the decision makers.
Review all the property owners in the precincts for pressures of change such as new vacant space, weaknesses in the tenant mix, expansion or contraction of the premises, and refurbishment.
Review all current property listings across your local area and chase down the listings that are for sale by owners. Invariably most owners do a very poor job of marketing their property.
Any new listing that occurs with your competitors is a reason to talk to other businesses in the same street in case they would like to compete with the new listing nearby. The competition factor may get you some more listings.
Talk to ever more people every day. It is remarkable just how much local market knowledge and leads you will get from other business owners in the area. They see things and know things that you will never see.
Track down the franchise groups in your state or town and see what their priorities are in locating new premises to operate from. It is likely that they could need new business locations from time to time.
The large businesses in your area are likely to have pressures of occupancy. Expansion or contraction will place some pressure on them as the year and their trade adjusts. Relocation to cheaper space or newer space is always a possibility for some successful businesses locally.
When it comes to a slower property market, the simple matters always seem to work. The common problem with most agents and salespeople is that they are not sufficiently organised to keep a contact system going. Look at your daily practices and activities; go back to the basics and do the right things.
If you have been working in commercial real estate agency for some time, you will know that there are many different things to do every day. That being the case, it is very easy to take the ‘easy road’ and avoid the hard and difficult tasks.
An average working day for a commercial salesperson looks a bit like this:
Prospecting for new business with business proprietors, and property investors
Inspecting other competitors listings in the market to understand how they are impacting your listings
Talking to property owners to update them on activities and marketing changes
Listing new properties and checking the relative details of price and marketing
Servicing existing listings to the qualified prospects and target market
Running marketing campaigns for existing listings to lift the levels of enquiry currently available
Reporting to property owners on progress made from recent inspections
Inspecting properties with qualified prospects to encourage offers and negotiations
Farming your territory in a methodical way to strengthening your market domination
Building a presence on the Internet for yourself personally as a specialist within a property type and a particular area
Taking offers and negotiating contracts and leases as the case may be
Getting involved with the sales team with regular meetings and market updates
Writing proposals for new business
A career in commercial real estate sales and leasing is perhaps one of the best and most rewarding selling environments you can work in providing you work hard and in a systemized way. Some salespeople struggle with being systemized even in these times where freely available technology helps us enormously.
One of the main attributes of human beings and particularly salespeople is that we have choices and we make choices; the choices we make in commercial real estate on a daily basis can radically impact the results that we achieve. That is the single most challenging aspect of salespeople in the industry. The majority of the salespeople make poor choices when it comes to their daily activities and points of focus. They would rather take the easy road than the challenging road.
Some of the things in the list are far easier than others. Invariably many salespeople do the easy things first and neglect the hard things. Most commonly, it is the hard things that really do bring in the business; prospecting is perhaps the most important item on the list. Most salespeople fail to prospect on a regular basis.
The most important things in the list can be summarized in a very short number of issues when it comes to commercial real estate salespeople. They are:
Prospecting for new business
Servicing existing exclusive listings and key clients
Finding of qualified buyers and tenants to satisfy the needs of each listing
Negotiating and closing on a realistic offers
All of these items link together to form the results that we require. Create a list of actions like this and incorporated it into your diary. Are there salespeople out there who are prepared to take the necessary steps to make their business happen on a daily basis? The answer is yes, and they are the top agents. Action is everything in our industry. Talking about something without taking the action is of no value whatsoever.
There is no doubt that commercial property management is very different to residential property management, yet so many real estate agents put their ordinary property managers (with only residential experience) on to the management of commercial or retail property. The process sets the scene for incompetency; the problem is magnified when the property in question is retail given the uniqueness of retail property performance and tenant mix.
The two people that suffer through all this are firstly the property manager because they just do not know what to do and secondly the landlord because the property is poorly managed. If the situation is not closely monitored the agency will lose a client and expose itself to the potential of litigation.
Agency principals beware; if you are going to manage any commercial or retail property, only do so with the right people and give them the knowledge to support you.
Without knowledge and experience in commercial property, residential managers find the change of property type really hard. They just do not have the experience in the things that happen every day such as:
Tenant mix strategies
Maintenance controls in larger properties
Budgeting property performances
Lease documentation and enforcement
Supply and demand management of available space
Forms of lease documentation and negotiation
Critical date management from the leases
Rent review and renewal negotiations
Environmental and heritage issues
Lease assignments and sublets
Lease negotiations and variations with new tenants to the property
Essential services management and compliance to codes
Occupational health and safety
The list can go on into many different things and special challenges. The larger the property that you manage, the more complex the issues that will have to be handled.
At the very centre of the commercial and retail property management processes and the basic keys to what you are attempting to do. Here is a summary:
Manage the tenants in the property to the rules of the leases and the occupancy codes applicable to the property and the location
Maximise the income for the property given the local property market, the leases, and the focus of the landlord
Control the expenditure of the property given the requirements of each lease and the authorities of the landlord
Maintain the property to the targets of the client, the budget and the pressures of occupancy
Integrate the property into the community and the business segments that it serves.
Optimise the income through vacancy minimisation.
If none of this makes sense, then knowledge is required to build up the skills and processes in commercial and retail property management. I did say earlier that retail property is very special; it requires a unique awareness of rents, tenant mix principles, and retail leasing property legislation. When in doubt see a good property solicitor.
In this commercial real estate market, the competition is fierce and the quality of enquiry coming back to you is selective. That being said, you should never ‘wing’ your presentations and inspections of properties.
You can do far too much damage to your chances of winning the deal or the listing. You can also send out the wrong message when it comes to your skills and relevance to the client or the prospect that you are presenting to.
What’s going on?
This property market is significantly competitive. Many of the agents you are up against will choose to use discounts and other enticements to influence the listing or the decision of the client.
On that basis your presentations need to be carefully planned and relevant to the solution that the client requires. That is why you cannot ‘wing it’ when it comes to your presentations.
Most clients today will initially be influenced by statements such as the following:
Low marketing costs
Availability of immediate property inspections
Open vs. exclusive listings
To help with the entire sales pitch and presentation process you can specifically discount all of these distractions providing you plan your presentation for the property and the client. Best results will be obtained when you completely understand the focus of the client and the challenges that are troubling them.
Set up your Checklist Strategy
Here is a checklist that you can apply to a planned sales pitch and presentation process. Into this model you can feed elements of the local property market and the particular property.
STRENGTHS AND WEAKNESSES: Define or restate to the client the challenges that you know they are facing. Clarity is important here so that they can see you fully understand their opinions and concerns. Generally they will be focusing on the expected outcome of price or rental, and the time required to achieve a satisfactory outcome. Part of that process will also involve the money required to market the property in the best way possible. It should be said that vendor paid marketing is the norm and not the exception. Always ask for a reasonable amount of vendor paid marketing.
COMPETITION: Be quite clear to the client when it comes to the competing properties in the local area and the achieved prices and rentals of similar properties over the last 12 months. Market evidence is a powerful tool if you use it correctly.
GET THE FACTS: A detailed inspection of the property prior to your sales presentation will allow you to build on the features of the property that you know will help you convert enquiries to potential sales or leases. Show the client that you really understand the factors of the property that will help convert a positive result.
SHOW THE STAGES: Prepare a timeline to the process of listing, marketing, inspecting, and negotiating. The timeline should be a visual process incorporated into your proposal documentation. You can use a Gantt graph for this process. One simple graph is far more powerful than five or six pages of your proposal document. Strategy is everything in this tough property market. Show the client that you really understand the right strategy for the property and can implement it conveniently and efficiently.
PICTURES: Take plenty of digital photographs in and around the property prior to the final sales presentation. Those digital photographs can be automatically scrolled on your laptop computer whilst you talk about the property and the solutions that will fit the client. It is remarkable how much positive attention and client focus these photographs will provide to your presentation.
A good sales pitch or presentation to list a property takes about 1 hour. Many clients will try to compare your presentation to other competing agents. Providing you have comprehensively covered these five items above, the client will find it very hard to overlook the strategies that you are providing.
When you work as a salesperson or agent in commercial real estate, the prospecting process can be very frustrating. That is because it is not easy and it does require practice and real focus. Some people find those two things really hard to achieve on a regular basis. Here are some tips from our regular bulletin for Commercial Real Estate Agents.
The good agents prospect every day for about 2 or 3 hours. When this becomes a habit in your business processes and diary, the market opportunities start to evolve. Given that your salary usually revolves around commissions, this is a good thing.
Having seen many salespeople struggle with the issue and most not handling it well, I have developed a set of rules to help the process for those that want to get ahead.
When you follow the rules, things start to happen. I want to share those with you now:
Prospecting and cold calling is the single most important thing that you should do every day. There are no short cuts; just research and do the work. That being said, it is best to get your ordinary business day very organised so that the same time frame is set aside for you to prospect and cold call. Research does not fit into that time frame; researching the people to call takes time and should occur in the evening the night before you make your calls. The internet and the business telephone book will be good sources of opportunity if you use them methodically.
There are only a few simple things that will make a lot of difference to your career in the industry. Prospecting is always number 1 on the list. Presentation and negotiation skills fall at numbers 2 and 3. As you can see, the industry is quite simple if you break it down to the main categories. So what should you do with items 1, 2, and 3? You should practice them on a regular basis. The process of practice will fast track the results that you get.
The process of prospecting involves contacting lots of people on a regular basis. Some of those people will have no interest or need for your services and on that basis should be dropped from ongoing contact. Others will have a need one day, and on that basis you will need to talk to them at least every 90 days until you can get a meeting and put a ‘name to a
face’. This industry is all about relationships, and meetings are really important to start that.
As you prospect with new people, expect that most people will not want to talk or meet with you. That is quite OK given that you do not want to waste your time (or theirs). Look at ‘rejection’ as a simple process of advantage that allows you to talk to other people and find the right opportunities.
If you prospect well, you will build a good market share faster than those that struggle to organise themselves. Are you up to the challenge? I hope so.
Need some more tips to handle prospecting in commercial real estate sales or leasing? Get our bulletin here.