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.
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