The process of advertising a commercial property for sale or for lease may have changed somewhat over recent years, but the need to promote the property remains as important as ever before.
Every property listing is a great excuse to talk to local business owners and property investors; in this way you will get more market intelligence and opportunities to work on as a commercial real estate agent.
Decisions and Strategies
Before you start to advertise a property, a few decisions and strategies should be set. In this way you can optimise the enquiry that you create for the commercial or retail property. Here is a checklist of some of the main things and ideas that you can use in establishing the advertising program and campaign:
Inspect the property comprehensively to understand the factors of presentation that should be addressed prior to any inspections. If something doesn’t look good then it should be removed or fixed; we have limited qualified enquiry today for most properties that are taken to market, and every enquiry should be optimised. You do not need ‘hurdles’ when it comes to property marketing.
If the property is already tenanted and therefore to be sold as an investment, you will need to comprehensively review the lease documentation to see how it will impact the marketing efforts and the target audience that you wish to attract. It may also be that you will need to address any weaknesses in the lease and occupancy documents (such as rent reviews, options, and vacancies) prior to marketing.
Determine the 4 things that the property clearly offers a buyer or tenant. Will these things influence the enquiry rate that you could create? If so, they will need to feature prominently in the advertising copy.
Get some professionally prepared digital photographs of the property that can be used in the marketing effort. It is remarkable just how these photographs will help you create enquiry as the property is advertised. Most agents do not take photographs of sufficient quality to help generate property enquiry. Ensure that your vendor is encouraged to have a portfolio of professional images taken of the property before the campaign commences.
What will be the best timing of the property promotion? In saying that, have due regard for seasonal and business pressures that may impact your target audience; on that basis, choose the right advertising material and how it is initiated into the market.
Some marketing efforts will be more successful than others. For this reason you should have a process of ‘test and measure’ when it comes to monitoring all of the marketing for a particular property. If something is not working, change it before you waste too much precious marketing effort and funds.
It pays to have all drafted advertising and layouts checked by others in your business team before the material is lodged with the respective media. Get these people to tell you of any weaknesses in message and presentation.
When you take the right steps in preparing your marketing, you will find that the outcomes from each property promotion are more genuine and specific to the property. In this way you can optimise the outcomes that you require.
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A retail property is quite special when it comes to tenant mix. In many ways the tenant mix will shape the future of the property. The success of the market rent for the property will come from the relevance and stability of the tenant profiles and the anchor tenants in the property. Are you an expert in all of these things?
In saying all of this, if you are a retail property manager, shopping centre manager, or perhaps a retail leasing specialist, you really should spend time on understanding the factors that strengthen a tenant mix profile in a retail property. In this way you bring better value and knowledge to your clients and property owners.
Retail property leasing and performance is really the pinnacle of skill and speciality in investment property today. Most of us that know the retail shopping centre industry well, find retail property very interesting and challenging.
A successful retail property is a balance of many things; as a retail specialist, you need to know what those things are and how to work with them. Good clients pay well for top retail property agents to help them.
Here are some of the important factors that come into a tenant mix plan and tenant retention plan for a retail property today.
From the outset you must know what your customers want and how the property interacts with the local community. For this reason it pays to survey your customer base and find out what they think of the property and its tenant offering.
Talk to the tenants in the retail property. They will have factors that they can share regards shopper requirements and buying patterns. Also note that some tenants will have different ‘stories’ to tell in this regard given their retail offering and position in the property layout.
Work closely with your anchor tenants so you understand just what they are seeing in shopper buying patterns and movement. Integrate the anchor tenant to the specialty tenants in the property to optimise mutual trading advantages.
Do you have common areas in the property where people and shoppers are encouraged to congregate and spend time? Do you have a food court in your common area layout that will help the shopper retention factors in the property?
Look at the lease terms and conditions for all the tenants. As part of the tenant retention plan it pays to negotiate any lease renewals early so you know just how much vacant space is coming up for renewal; then you can plan how you want to use it.
Expansion and contraction factors in a retail property are always happening. Some tenants will need more or less space; that is why you should create and how you should manage your tenant retention plan. Look after the good tenants in the property and manage the poor tenants out of the property at the end of their lease term. Over time the market rental can be underpinned by better tenants working in cooperation with each other.
Should you give tenants any options for a further term in a lease negotiation? Not necessarily is the right answer. The final decision on lease options will be based on the overall tenant mix, the property renovation requirements, and the landlord’s investment plans. Most large shopping centre owners do not like giving options for a further lease term given that it takes away a lot of control that they would otherwise have in a shop location and its position in the tenant mix.
Some of these factors can give you real control on the future of a retail property. Formulate your tenant plan and put it into motion. Over time this will help your retail property perform more effectively as the retail trading environment and economy shifts and changes.
In commercial real estate sales and leasing, you need results when it comes to cold calling. There is no doubt that the cold call prospecting process is a significant part of the business generation system that you should be running. That being said, you still need to get results from your telephone contact processes. Tracking your numbers as you make the calls is really important.
To get the call system up and running for you I have provided a number of tips that will help you with establishing the right mindset, and building the processes to support the results that you will achieve.
The first two or three weeks in the call prospecting system are always the toughest. That is because it takes time to develop a new habit, and you have had years of other activities to break or reshape. Developing new habits are part of the commercial real estate business and certainly part of the prospecting process.
Every day you will be contacting many people in the local area. The key to the process is in making lots of calls in the easiest possible way. When it comes to commercial and retail property, the best place to start is in the business telephone book. Every business will have a relationship to commercial or retail property as a tenant or an owner. When you ask the right questions, you will get the market intelligence that you need. Local business owners will also tell you more about the local area and their immediate location. It is very easy to telephone 50 businesses from the telephone book on a daily basis. As you do this, you should track your findings and the comments from relative prospective business owners.
To telephone 50 businesses, it takes about 2 hours. You will not get through to 50 people during that time or establish 50 reasonable telephone conversations. Those people that you cannot contact today should be put into the pipeline for a return phone call. Out of 50 telephone calls, you should get through to approximately 15 to 20 business proprietors. It is then simply a matter of asking the right questions.
Many salespeople look at the cold calling process incorrectly. In our industry, it is very difficult to pitch over the telephone. On that basis your initial call should simply be to find out if they have a need or interest. Following that point of qualification, you can generate a meeting with the right people. On that basis you will not be wasting your time.
The super-fast process to cold calling is simple and straightforward. When you stick to the rules above, you will find that results are achieved. Keep yourself focused and detailed when it comes to capturing information.
Without a doubt, prospecting is the most important tool in your commercial real estate toolbox. Without a good prospecting model your commissions and listings will flounder.
The ‘golden rule’ to establishing a prospecting model is to make it a daily event. You cannot look for new business once per week. When it becomes a central part of your diary on a daily basis, then and only then will you see results.
If life is that simple, why is it that so many commercial real estate salespeople really do not prospect well, if at all? Most salespeople suffer from a mindset issue that holds them back from making ‘cold’ contact to people that they have not spoken to before. They just ‘hate’ the process.
When you start anything new, the process does take time to ‘settle down’ and gain momentum. Setting new habits over old habits that you have established over the years is quite difficult. Persistence will however get you through if you set up your model of prospecting.
Here are some rules to help you get a good prospecting model together:
From the very start make sure that the prospecting time in your diary is the same time every day. So often salespeople break this rule and a habit of prospecting is not created. It is best to do the process in the morning first thing before anything else takes over.
You will need a simple script to use as part of making cold calls. The simple script should be an ‘opener’ to a conversation. It should not be a pitch for new business; a conversation is what you want when you reach new people.
Start your contacting model with local businesses. They are easy to find and approach. You can use the business telephone book to help you here. Those businesses will tell you a lot about the local area and be a great source of market intelligence. In some cases they will tell you who owns the property.
Define your boundaries and your streets. In this way you will know the ‘priority zones’ where you think the main properties are located. Opportunity starts to show itself when you focus and dig into a zone to extract all of the local information. Systems like this are really important.
Use a good database that is easy to use and backed up to the internet. So much work today occurs out in the field. You need to get to your database from a mobile telephone or laptop computer in the field.
Our industry is built on established ‘face to face’ relationships. Getting in front of the right people is a big part of building your market share. Remember, you are a self-promoter of your experience and relevance to the prospects that you talk to.
The customization of an industrial property is achieved through the integration of the real estate, its established and new property improvements owned by the landlord, and the machinery and inventory of the tenant. This relationship can occur as part of the lease negotiations between the tenant and the landlord.
If the customization of the plant and equipment is going to be extensive and elaborate, the terms of the lease will need to be suitably and carefully constructed. It is important to identify the different levels of plant and equipment that are owned by each party. The lease document is the place to do this.
If costs are to be incurred by the landlord in modifying the plant and equipment and to help the tenant in establishing occupation, then the initial property modification costs should be amortized across the lease term. Any money outlay by the landlord should be built back into the income recovery.
You can calculate the cost recovery alternatives through a discounted cash flow with appropriate rental recovery assumptions across the initial lease term. The rent reviews and the market rentals to be charged during the initial lease term can be modified for recovery of amortized costs.
Distinguishing the Differences
It is often difficult to distinguish between the plant and equipment owned by the tenant, and that which is owned by the landlord. For this very reason, any new lease should clearly detail the ownership factors and the maintenance factors that apply to the existing plant and equipment within the property.
The landlord may own some of that plant and equipment; however the maintenance may be passed across to the tenant as part of ongoing occupancy. The lease document is the way to detail this factor. It is then up to the property manager to ensure that the appropriate levels of maintenance occur during the lease term.
Clear definitions and relationships need to be set when it comes to leasing a complex industrial property with complex cross ownership structures of the plant and equipment.
Generally speaking, the costs incurred in establishing new plant and equipment within an industrial property will have some advantage in depreciation when it comes to taxation. Clear relationships need to be set between the tenant and the landlord as to the initial cost outlay and the application of depreciation.
Any property landlord should consult with their financial adviser before they make the final decisions on capital costs incurred in a new or established industrial property.
When it comes to working in the property industry, commercial real estate can be very special and unique. The knowledge required to be an expert in your field is quite specific. For this very reason it pays to specialize in a property type and a location. All the ‘top agents’ do exactly that.
You can be a sale and or leasing expert, or perhaps a commercial property management and leasing specialist. The important thing is that you are very good at what you do and you can talk to the service you provide in a comprehensive way.
I should also make a special note here about ‘retail property’; retail is much more specialized than office or industrial property. If you are a true ‘retail expert’ then focus on the special issues of retail property performance such as tenant mix, leasing strategies, and increasing sales performance for the retailers. All of these things lead to a great property performance.
Our clients like to deal with ‘property experts’ that have a very good command and control of the market. Whilst your office can have a good marketing position and perception in the local area, you personally should also have the same.
Here are some tips to help you get the right focus in your career and steer the process forward.
Find a top agent or mentor to help you with ideas and focus. Experience is a great thing and those that have been working successfully in the industry for a long time will have ideas that they can share with you.
Watch the good people in the industry to see what they do. Some of your competitors will be better than others in market share and closed transactions. Some salespeople in those competitor businesses will be ‘top agents’. How did they get to that position and what do they do every day to build their market share? Look at their marketing efforts and their property speciality; are there any differences in what you are doing? How can your mirror their ‘good’ processes?
Systemise your day so you stay on track and move ahead in your plan. The only real resource that you have in the industry is the time that you use every day. Don’t waste a minute of time on things that do not matter.
Personally create a database that grows through your daily prospecting efforts and directed action. You will capture a lot of information in that database that can take you forward into new property opportunities. The capturing and recording of the right information is a personal skill; ensure that you do all of this work yourself so you take ownership of the information and use it to the fullest of its circumstances.
Avoid poorly organised salespeople that make excuses. There are a lot of these people around. Negative comments and ideas from these people do nothing for your momentum and market share. Whilst the property market may appear slow or sluggish, don’t let the comments of ‘poor performers’ hold you back from trying something new and relevant.
In any property market there are always opportunities to be captured. In most cases your results are driven by the number of relevant people that you know and maintain contact with. It always comes back to who you know and how you keep up the contact.
In commercial real estate sales and leasing, the process of setting goals will help you stay on track in your personal business and marketing plan. In this property market one thing is certain, everything changes quite frequently. For this very reason, a good goals focus system will help you maintain your momentum to the market share and commissions that you require.
When the property market is slow and tough, it is very tempting to absorb the negative comments of underperforming salespeople in your office. Excuses are very common in this industry. It is best to shut out these people from your business practices and your social activities. They can offer nothing to your end result as a professional commercial real estate agent.
Here are some tips for setting stimulating goals that can drive your business ahead.
Understand the market that you serve both geographically and by property type. When you narrow your activities in this way, you can be far more specific in your marketing efforts.
Look into the history of the area over the last few years. Make sure that you are working on the market segments that are attractive and active. Also make sure that you are specialising in a part of the market that is growing and vibrant.
Your goals should be specific to your end result. That will normally be commissions, listings, closed transactions, and active clients. All of these things are personally controlled through your prospecting efforts. On that basis you should build prospecting into your daily diary activities.
Given that our industry changes so frequently, set goals for a period of 12 months that are quite specific. Beyond 12 months is almost like a wish list where the goal posts will change subject to property market conditions.
When you set goals for the period of 12 months, they should be reviewed on a weekly and monthly basis. In that way you will know if progress is being made, and on that basis you can make adjustments.
Measuring your success towards your goals should be achieved through ratios and results. In the first instance, you will need to know where you are right now. That is in the number of listings, commissions, and percentage of market share. Beyond this current point, everything will be an improvement.
One of the biggest problems in setting goals is that most people will forget the process after a short period of time. Other issues take over and daily events become more random. If you want to proceed in this industry, your goals become points of the compass to keep you on track to your business plan.