In commercial real estate brokerage, you need plenty of clients to support your listing and commission activity. You also need new prospects and opportunities to fill the gaps when some of your clients move on or leave the industry.
Given that we are soon to be starting another calendar year, it is time to have a look at a new and fresh approach to prospecting and client networking. This should be a personal priority for all real estate agents and brokers. This is the best time of year to get your client activities and database directions set for the next 12 months.
Here are some facts that relate to the market today and the clients we work with:
The ‘market noise’ from competing agents will always be significant. Many of our top clients will be working with other real estate agencies or at least know of some other top agents locally. This is a continual threat to our market share that can only be addressed by relevant and constant contact with the clients that we know. That is why property specialization is such a critical process in building listing opportunity. When the time comes for the client to move on a property matter they will usually choose the best agent with a dominant market share within the location and the property type. That is why general real estate agents and brokers never really develop dominant levels of business.
Winning a listing today is not entirely about providing discounts or inflating the property price to attract the clients business. Winning a listing is all about packaging the property to attract the maximum interest and facilitate inspections. High prices and higher rentals will not do that. Understand the prevailing market conditions and how you can work with that to solve the property challenge for your clients and prospects. Show the client the true facts of the market as they apply to the property type and location. Tell some stories relating to both successes and failures within the property category.
If you have a property that has been on the market for a long time, it is time to seriously adjust and reduce the price and or the rental structure in line with market conditions. Clients are not fools when it comes to true market conditions; they want results. They will usually understand that an inflated price or rental will make the marketing process quite difficult, so your pitch or presentation needs to tell the right story and provide the right market evidence. Any property with an inflated price or rental will soon become stale on the market; stale listings are usually quoted by top agents as marketing weaknesses. It is easy to show clients how other overpriced listings have been poorly marketed and overlooked by buyers and tenants. If the client is still unrealistic on price or rental expectations, it may be time to walk away from the listing and let some other agency or brokerage waste their time.
Every quality listing should be exclusively marketed. As part of that process, you should be asking for and attracting vendor paid marketing funds. Structure your sales pitch and presentations accordingly. Marketing dollars spent will have a lot to do with your real estate profile locally.
Working within these very simple and yet important facts, it is time to look at the ways you can attract new clients and listing opportunities. As I said earlier, the change in the calendar year is upon us and certainly will give us the opportunity for a new business direction and a freshening of our client connection process.
Reaching Out for Clients
Here are some tips to help you with reaching out to new clients and prospects:
Visit the people within your current database with the deliberate intention of asking for referral business and opportunities.
Identify the bankers and financiers within your town or city that have an interest in commercial industrial or retail property. Get to know those people at a personal level.
Contact all local accountants and lawyers locally that appear to be reasonably successful with their business activities. They are likely to have many clients active or interested in commercial property.
Identify the entire listings list active with your competitors. Use those listings as leverage to talk to other property owners nearby. Some of those property owners may like to compete with the current listing in the same location.
Identify the people that have purchased investment property within the last 3 to 5 years. They are likely to be active again within the next two or three years. They may wish to buy, sell, lease, or develop.
Check out the property development activity at the local council. Also check out the changes to zoning and property usage. All of these things could be solid foundations for project marketing, future sales and leasing activity.
In our industry there are many leads and opportunities available at any point in time. It is simply a matter of digging deep enough into the marketplace, the people, and the listings. Opportunities in commercial real estate are always available and it is simply a matter of asking the right questions to the right people.
In real estate brokerage, the industrial property market offers good levels of entry and activity. Why is that so? It is because the property type is ‘entry level’ for investors both in complexity and cost. It is not hard for an agent to know what is going on in the industrial market place and get the facts of what a property investor in that segment may be looking for.
The aspiring brokers and agents that are starting up in the industry will find it easier to understand industrial property first and foremost. From that point other property types can be incorporated into market activities and prospecting.
From a career perspective, and to help you get started in industrial property sales and leasing, here are some ideas:
The industrial property market is usually the first to respond in an upturn and a downturn. Watch the shifts in the economy to capture the market changes and listing opportunities.
Businesses centred on manufacturing and bulky goods usually need larger premises to operate from. They will chose locations that are relevant to regional raw materials, transport, customer demographics, occupancy costs, and business operations. This then says that a top agent in industrial property will spend substantial time getting to know the local businesses and what they are looking for in business operations, expansion needs, and locational change.
Some properties in this category can be tenant and business specific. If that is the case, any landlord should take care in structuring a longer lease with appropriate make good clauses at lease end. Also allow a reasonable lead time for a tenant making a decision on the exercise of an option. If the landlord needs to find a new replacement tenant for a highly specialised property, it can take some time to achieve the placement.
In this market segment, a top industrial property agent will work on both leasing and sales opportunities. One thing can very well lead to another.
With the predominance of industrial parks and the clustering of industrial tenants and businesses into the one location, there are special factors of knowledge that apply to the title types and the permitted uses under the leases. Get to know how these things work and can fit into the zoning and planning regulations for the local area.
Industrial properties will have configuration and improvement issues to understand. That will include hardstand, warehousing, office space, staff amenities, car parking, security, and loading areas. Use and configurations will change. Get to know what tenants and businesses are looking for locally in property choice and occupancy.
So this is a good market type to enter into as a commercial and industrial property agent. If you enjoy the market segment you can specialise for many years and achieve.
Talent in commercial real estate can be a number of things depending on the job specification, the local area, and the property type. The point is that you must hire people with ‘talent’ or ‘potential talent’ if you want a better brokerage and market share.
When you are employing people for real estate roles in sales, leasing, or property management, choose those people that match the demands of the role. Don’t employ someone that ‘thinks’ that they can do the work or is untested without applying a probation period. Employing the wrong person can waste a lot of time and money.
Real ‘talent’ in our industry will be specific to the role required and the person, but they generally have a set of ‘common denominators’. Here are some of those:
An ability to self-motivate under pressure
Real knowledge of the property type and the area locally
A willingness to learn new things and systems in real estate
Advanced communication and negotiation skills across all parts of the industry
Awareness of property strategies that apply in sales, leasing, and property management
Knows how to seek out new business and clients quickly and effectively
The ability to set personal goals and to then take steps to move towards them
A track record of achievement in the industry
A client base that is deep and proven for the local area
Someone that is personally committed to growing their business and can prove to you that they have a system to do so
Can you find a person with all of these ‘traits’? Yes they are out there; but they do take some finding. Question the candidates ‘track record’ in the industry and get some facts about their client base. Both issues will be important to the future of the role. Understand just where they have been and the achievements reached in doing so.
There are people that have some of these elements of ‘talent’, and a willingness to learn the rest. That’s where the full review process comes into importance and relevance. Through the job interview process understand just who you have before you and what they can bring to you. Skills, knowledge, and market experience all have value to the employment selection process. Make sure the person can prove that they are willing to learn and get evidence of how they have done that in other roles or brokerages.
As a final note here it is worth understanding that it takes a couple of interviews to really review a person considered for a sales position in commercial real estate. In the last interview you can ask them to do a presentation on ‘why they should be the best person for the role’. Don’t rush your choice or decision. Consider all the facts before you before accepting the candidate into your commercial real estate brokerage.
When you create an action plan for prospecting in commercial real estate brokerage, you have something to work with that can help you find the right clients and listings. Most prospecting plans require modification and refinement given that most property markets will change throughout the year. The important issue here is that you also change your approach accordingly, and keep new contacts and prospects flowing into your database.
So you need an action plan. That plan is something that you can do every day to reach new people to talk to and connect with. Have you got one of those plans now? If not this will help you get started:
Understand that you are the person to drive the prospecting plan and all the stages of it. Diligence to the process is required. You can’t take a day off or ‘cheat’ on the tasks required. When you define the actions to take, they simply have to be done.
Define your territory to focus on. That will be ‘geographically’ so that you can concentrate on the streets, property owners, quality properties, and listings in a logical way. Split up the area into segments to be covered and worked. Ideally that will be in segments of 100 properties.
Understand your property speciality in all respects. Most of the clients that you work with require an agent that is really experienced in the property type and the market; the client must see that you are the ‘real deal’ when it comes to understanding the property and what to do with it.
List high quality properties as a preference. On that basis be selective in what you list and why you do it. It is a fact that any quality property will create better levels of inbound enquiry. In that way you can create more inspections and create leverage in negotiations.
Letters should be sent to property owners locally and the required follow up calls should be done. Don’t send letters and hope that the prospect or property owner will call you back; it is highly likely that they will not. You are the key to getting momentum from your prospecting letters. Only send out the required number that you can follow up in calls. A good number to start with is 5 letters per day.
Each day call at least 25 business people, tenants, property owners and any others that may have an interest in commercial real estate today or in the future. Ask the questions to see what they are doing now with property. Qualify them before you seek a meeting.
Conversations are the secret to finding the leads and the opportunities that you require. Talk to lots of people every day and leave your business card with all the people you speak to. You really do not need much in the way of other marketing material. Your business card is the key to the process.
Other listings, sales, and leasing should be watched for action and opportunity. Monitor your competitors and the factors of time on market.
Track your momentum with a good database. People of substance and relevance to commercial property should be spoken to frequently, and a database will help you do that correctly and specifically.
Your prospecting plan doesn’t need to be complex, but it does need to be done. It’s not something that you can delegate. Personal action is required. The processes that you create can take you to the top of the commercial real estate market much faster.
Every so often you will hear some agent or broker say that ‘cold calling doesn’t work’. They are of course giving themselves some reason to not make the calls and avoid the process.
It is a fact that the top agents of the market are not afraid to make lots of calls every day to new people. The important issue here is that they are talking to both new people and current contacts. They are growing relationships on a daily basis.
Our industry is based on relationships. Get to know many property investors, tenants, business owners, and property developers. Keep in contact with them for the long term. Trust is a big issue when it comes to attracting new listings to your agency or brokerage. It can take months if not years for some prospects and clients to be in a position to move on a property matter.
So here are some detailed cold calling tips to help you grow your real estate business:
Determine your market area and targets. The market area is likely to be a part of a town or city and that should be determined by boundaries. Stay within your boundaries and get to know all the properties and property owners inside the zone. The targeted properties are likely to be by type and size. On that basis travel the streets in your sales and leasing territory. Find the quality properties and network the property owners and or landlords.
Call times should be set that work for your business and the people that you should be talking to. Ideally you should be making calls for 2 or 3 hours every day. That will take some discipline in your diary. Don’t let others interfere with your prospecting plans and efforts.
Record your numbers relating to calls out, calls connected, meetings arranged, and listings created. Over time you will see those numbers improve. The improvement can be fast tracked through practice each morning when you first arise.
A conversational approach works better in prospecting. Don’t pitch in any way; you really have no idea of the needs of the other person, so a conversation will get you further into understanding future opportunity.
Get a good database to track your call results. Simplicity and flexibility are important with a database. Protect your data and keep it up to date.
If you want more listing and commission business in commercial real estate brokerage, you will get there a lot faster with a professional approach to cold calling. Understand that most brokers avoid the process, and on that basis it can be a major source of leads and new business for you. Remain confident and make more calls.