In commercial real estate agency today, you can create a ‘checklist’ approach to the property sales process. This procedure can help you be far more effective as an agent with your clients and with the marketing of the property.
In simple terms you can create a ‘sales timetable’ to keep you on track with the most important things relating to the client and the listing. You could say that the approach is a way of keeping you organised on the issues that matter.
Top agents are quite focused when it comes to clients and listings. The ‘checklist’ approach helps with the focus that you need. Here is a list of items that can be considered and merged by agents into a ‘checklist’ for commercial property sales.
Finding out all the facts about the market in the local area.
Understanding the property as it exists today, including improvements, services, and amenities.
Determining the client’s priorities and requirements when it comes to the sale.
Presenting and pitching your services in a way that matches the property as it sits in the market.
Listing the property accurately with due regard for property details and facts. If you make errors here, they will come back to ‘haunt’ you later.
Determining your services to be provided to the client and the property could be very relevant. You may need to market the property in a particular way. Make the right choices.
Protecting your commissions with a legally enforceable and correct agents appointment
Getting vendor paid marketing funds to promote the property to the market
Choosing the best method of sale to generate inspections and enquiries
Resolving property issues and presentational factors in preparation for marketing
Creating a relevant and high level marketing strategy
Planning the best ways to inspect the property
Releasing the property to the market
Direct marketing of the property to qualified buyers in your database
Tracking incoming property enquiry
Taking inspections to and around the property
Resolving questions and issues that potential buyers may have with the property
Negotiating accurately and effectively between the parties
Getting offers on a contract in a legally correct and accurate way
Closing on the offer between the seller and the buyer
Moving the property transaction toward settlement.
Satisfying any subject to provisions relating to the contract
Settlement satisfaction in accordance with the client’s instructions and the contract of sale.
Asking for referral business
Keeping in close contact with your clients after the initial transaction is completed.
When you look at the list, it is easy to see why we are specialists in our industry. We can provide real value to the clients that we serve.
In commercial real estate agency today, you need to be an entrepreneur in your business practices and your focus. Your successes in the industry as an agent will come from your personal endeavors.
The agency that you work for will have little to do with the process of building greater personal commissions and generating listings. Successful agents are individually driven and have a comprehensive marketing plan to promote themselves comprehensively through the region that they work in.
There are some very simple strategies to apply here if you wish to rise to the top of the market. That being said, all of those strategies require personal effort and deliberate focus. They take time and effort each and every working day to implement effectively.
Here are some of those strategies to help you develop the entrepreneurial mindset of a top commercial real estate agent:
They say that you can learn a lot from experience. You can also learn a lot from the other top agents in the area. Whilst some of those top agents may work with competing agencies, you can observe what they are doing and how they do it. You can replicate their successful processes when it comes to knowledge, skill, and marketing.
Every client that you serve today will be an opportunity for repeat business in the future. The cycle of commercial real estate is quite long and on that basis your relationships will need to be built and nurtured. Focus on quality clients and quality properties. It is the quality properties that will bring you more enquiries from any marketing campaign. Poor quality properties bring poor results.
Referral opportunities can be generated from successful transactions. Stay close to your clients, customers, buyers, and tenants as part of closing a transaction and moving on. Ask for the referral at the right time.
There are certain skills which are absolutely critical to the services that you provide as an agent. You should have significant skills in prospecting, presenting, marketing, inspections, negotiations, and documentation. These six aspects of your career require constant upgrade and practice. When you do this, it makes it a lot easier for you to rise up in the ranks of the commercial property industry.
Every listing, sale, or lease is an opportunity to talk to other people in the local area. Send a direct letters to the local property owners and the property investors as part of your marketing efforts. In many respects, one single listing can allow you to talk to several hundred people. It is simply a matter of developing a mindset to do it and commencing the process.
If you choose to be an entrepreneur in commercial real estate agency today, you do need to take a serious look at your business activities and systems. They will help you take advantage of the local property market providing you implement the appropriate action on a daily basis. Success in this industry is driven from personal activity and nothing else.
In commercial real estate agency it is essential that you sustain peak performance when it comes to undertaking the daily business of an agent. Peak performance can be many different things for each of us, however in our property industry it usually relates to client contact, prospecting, marketing, and negotiations. It is a very personal process.
The agents that are struggling are usually the ones that have little focus on the key issues that really matter. It is very easy to get tied up in mundane and ordinary issues. You can be ‘busy’ doing all the wrong things; you can also be ‘busy’ chasing hope in a sale or lease, and distant deals that you have been working on for months if not years. A good degree of selective work is required to build and maintain your income. Understand the difference between a good deal that has a reasonable chance of success and one that is really a great waste of time.
The key issues in our industry relate to building the business, converting the business, and establishing a strong market share. Peak performance has something to do with that. Here are some tips to help you:
Segment or split your day into the things that really matter. They are the things that will help you build your business, listings and commissions. If you put a title to the tasks they will be prospecting, client contact, and marketing. Those three things will allow you to inspect properties with the right people and negotiate on more deals.
Identify the key issues, clients, actions, and tasks that are closest to the money and commissions. Avoid anything that cannot give you a lead or a commission. Your income depends on your focus and actions.
What exactly are you really good at (in commercial real estate business)? Hopefully your skills are in connecting with clients, finding listings, and marketing. When you understand what you are good at you can do more of it. If you are not a top performer in some critical things then you will need to improve. Practice will be required.
Enjoy what you do. Passion and attitude has a lot to do with moving your market share forward.
Look for the top agents in the local area. See what they do and how it works for them. You can replicate their skills and actions. Watch and learn.
Simple things like these five will help you move ahead as an agent in commercial real estate. Control your time and your focus.
In commercial real estate agency today, the process of self-improvement is really important to the traction that you need as an agent. Virtually no one will start off in the industry with all the skills and knowledge required. This then says that ongoing improvement will be required.
It is of note that some agents are better at some things than others when they first start their career. The agents that are generally good at prospecting will usually climb up the ladder of the market relatively soon in comparison to other agents.
This then says that prospecting is really important to help you proceed as an agent and build market share. Unfortunately, prospecting is really difficult for many agents to master and focus on. Regrettably this then becomes a struggle for them and can be the major hurdle that holds them back from improving listings and commissions. If you are struggling in the market today, take a serious look at your prospecting efforts and systems. Address the shortcomings, and improve your processes.
Here are some other ideas to help you with a self-improvement system in commercial real estate agency.
Many of the clients and prospects that we deal with are very experienced when it comes to property types and the local property market. You will need to be equal to if not better than these people to show some relevance as an agent in conversation and with your presentations. Build your market knowledge at every opportunity. Track the trends of the market when it comes to prices and rentals. Understand what’s happening when it comes to comparable properties. Be prepared to tell stories of importance to the clients that you serve.
Watch your competing agents closely. Some of them will be high performers when it comes to listings and commissions. Watch what they do and how they do it. Good business practices can be replicated. Success leaves clues.
Work with a coach or business colleague that understands the industry. They can help when it comes to problem solving and market experience. They can give you those extra ideas to change your approach or your business habits. If you are struggling in the industry at the moment, it is important that you change your habits to improve your results. Habits are the only way to progress with better listings and clients. A coach can help you improve your habits.
Set some goals and targets relative to listings, income, prospecting, and marketing. Within each category you can look at sub categories as targets. For example you could look at the topic of listings and define the differences between exclusively listed properties and open listings. You could also look at the topic of marketing and split it into online, offline, and direct marketing. Certain things will be more effective when it comes to marketing each property type. Understand the differences and repeat the things that work.
A successful agent will progress in the industry based on personal effort and self-improvement. Some of these items will help you do just that. Be open to seeing what is working for others in the industry, and repeat the things that can work for you.
Leasing commercial property today can be a challenge for all sorts of reasons. The landlords that we act for and the tenants that we negotiate with all have requirements to be balanced into a lease structure. Negotiating a lease can be a real challenge.
When you look at the financial or calendar year, there will be ‘seasons’ of property activity. Sales and leasing activity for a property type will vary during those ‘seasons’ of business and tenant activity. As the local real estate agent you must do the best you can with leasing given the rental and leasing requirements. Understand what the property market is doing and then ‘prospect’ into it. You will soon find the landlords and tenants that require help.
Reflecting on today’s property market, here are factors that require attention of the leasing agent:
Comparable properties in the local area should be understood and watched. From time to time you will see those comparable properties take your tenants or seek to attract your tenants away from their leases. It’s all about you being competitive as a property when it comes to lease terms and conditions. Use a tenant retention plan to keep your tenants happy and in occupancy. Talk to your tenants regularly.
Market conditions will change during the year. Pay particular attention to the factors of market rent and vacancy rates. See the trends in both and look for the upcoming new property developments that could impact the supply and demand factors of occupancy.
Rents and incentives will change during the year. Gross and net rents will rise and fall based on the supply and demand for space. Importantly your vacant areas should be competitive when it comes to marketing vacant space to new tenants.
Local property types will show trends when it comes to rents and vacancies. Watch what the market is doing. Stay ahead of the trends and advise your clients and landlords how to handle their tenants and rents.
Landlord requirements will vary based on the holding requirements and cash flow of the property investment. The leases that you negotiate will also be based on the holding requirements of the landlord. Understand these factors.
Vacancy factors will have an impact on the tenant mix. Work with your tenants to keep the vacancies under control. Talk to new tenants to encourage lease negotiations of currently available space.
Outgoings recoveries will help the landlord with net rents. Look at all the leases to see what recoveries can and should occur. Reconcile and charge those outgoings correctly in accordance with the leases.
Lease documents will vary across a property and on a landlord by landlord basis. Read your leases and enforce them correctly.
To be successful in leasing commercial property today, you must understand the market, the landlord, the local rents, and the property performance. It is a fine balance that is a professional requirement for property leasing agents.
In commercial real estate agency there are certain market symptoms for you to watch for. If you like they are the symptoms of change.
I like to think that any property market is an ‘agents market’. The buyers, sellers, tenants, and landlords will all suffer some market pressure and change, but we are the professionals that can choose our responses and actions. The commercial property market is full of opportunity for those agents that look for symptoms and adjust their actions accordingly.
So here are some ‘symptoms’ to watch for:
New property developments will throw some pressure on supply and demand for occupancy space and property ownership. Check out the local planning office monthly to see what new property developments are coming up.
Market rents will change seasonally, and for other reasons. Understand the ‘seasons’ and what happens to lease or tenant enquiry as a result. In some cases it pays to regulate the timing of property to be marketed for lease.
Incentives will change in your local area when it comes to leasing. The idea behind an incentive is that the cost of it is loaded into the balance of the lease term. In other words the landlord gets back the incentive cost and interest from the lease structure. You can build this extra cash flow from the rent review structures placed in the lease.
Time on market will change each year by property type. It is also a ‘seasonal’ factor to be watched. Some properties will have a long ‘time on market’ factor, whilst others will move quickly to a transaction. You must understand the reasons for either and both to occur.
Certain price ranges will be more acceptable to the market throughout your region and during the year. Keep the local sales records active so you can see what price ranges are more active than others.
Renovation and refurbishment will be factors of change that can apply to older and redundant properties locally. There is opportunity to be had here with the right properties that need to go through some usage change and property repositioning. Look for the properties that need to go through this cycle of change.
Always track the types of property enquiry coming in to your agency and how that enquiry is coming to you. Understand what those people are looking for when it comes to a property or location. This current property enquiry from all your listings will give you hints as to what is happening locally and how you can satisfy the demand.
Property research is easy in commercial real estate agency when you know what to look for. Keep your records accurate and up to date. You will then know how to improve your prospecting and marketing efforts.
It is important that every commercial property has a lease strategy to support ongoing cash flow and reduce vacancies. These strategies should be integrated into the business plan for the property and for the landlord.
It is of note that a single lease for a new tenant should not be looked at in isolation. It should be looked at broadly with due regard for the surrounding tenancy mix, the income required for the property, and the impact that the long term occupancy may have from the initial term and into any option period agreed.
Here are some ideas to help you consider the leasing of a commercial property:
Assess the local area for competing properties. Some of those properties may be taking or attracting your tenants now. Look at those competing properties to see what is happening when it comes to vacancy profile, tenant mix, expansion and contraction, and the lease marketing strategies. Your property will need to be equal with, if not better than, those competing properties.
Assess the market rental through the local area so that you can create attractive lease packages for incoming tenants. When it comes to leasing, the start rent is not as important as the cash flow over the lease term. The starting rent should be regarded as something of attraction to create lease occupancy.
The rent review structure over the lease term will give strength to the cash flow for the landlord. The best way to assess ongoing cash flow is through the calculation of the lease and its net present value to the landlord for the duration of the lease. You are therefore assessing the income over time, not just focusing on the rent today.
Some landlords prefer not to give options for renewal. This is certainly the case when it comes to a quality or larger property where the landlord wants to retain flexibility in the tenancy mix. Many landlords of the larger shopping centers will avoid giving options to tenants for ongoing occupancy. The reason for doing this is that they like to move tenants in and around the property based on tenant mix and clustering. When they move the tenant, they can improve the overall cluster and general area including the other tenants. This will then have further benefits for the overall income return for the landlord.
When you negotiate the necessary rent reviews in a lease document or new occupancy, mix the rent reviews appropriately so that the landlord gets a sensible and realistic increase in net rent income. The rent review methods available will be variable such as market rent, fixed dollar increase, fixed percentage increase, or something that is indexed to the consumer price index. You can make the right choices based on the property type, the landlord, and the legislation or property laws that apply to lease occupancy with that tenant situation and property type.
If you manage or lease a property with a number of tenants in occupancy, look at the overall lease profile and expiry dates over the long term. Any lease that is to be expiring inside the next 18 months should be focused on now for lease renewal, lease expiry, tenancy change, expansion, or contraction. Start talking to your tenants early so that any appropriate changes to the occupancy can occur with measured and structured negotiations. Whilst the lease document may provide for certain other time frames on lease renegotiation, there is nothing to say that you cannot start this process early.
Keep in close contact with the current tenants in your property. They will have pressures of occupancy and on that basis it is better for you to work with those pressures than let the tenant move to another nearby competing property. Keep talking to your tenants on a monthly basis to understand exactly what they are thinking and doing as a business. Help them stay with the property for the long term if it suits the landlord’s situation.
The leasing of a commercial or retail property is relatively straightforward when you follow the rules. You can create a checklist with the above matters and other things relative to the property type. Control is everything when it comes to making a lease strategy and structure successful for the landlord.
In commercial real estate you must prospect for new business every day. In that prospecting time, 50% of the time should be spent on people that you already know and are progressing up the contact pipeline, and the other 50% should be spent on the new people and property owners that you have not spoken to before.
When you follow this model of prospecting, you find that your market opens up with opportunity; the clients and contacts that you know will expand. From that action plan you see the new business that you need.
It is a fact that many agents if not 90% of agents do not prospect enough. They like to find excuses to move on to other things. When they get busy, the first thing to be avoided or removed from the diary is prospecting. That then leads to a market downturn and decline in listings and then commissions.
Here are some rules for prospecting in commercial real estate:
Don’t work with a small group of clients and prospects. This will expose you to loss of income when a client moves away or stops activity in property. It is better to have your main client list (the ‘A’ list) and then a secondary client list that you can move into or escalate when the ‘A’ list is shrinking. As a general rule you should have an equal number of people or prospects in your ‘A’ and ‘B’ list. Prospecting on a regular basis will help you with the numbers in each group.
Know what your idea client looks like and where they are located. When you get focused on a specific client you can target your prospecting for better effect. Top agents tend to focus on clients with large properties or portfolios of multiple properties.
Know what your ideal property listing will be and where it is located. This focus helps you with organised prospecting. Keep to a geographical area so you can methodically go through your region with focus on properties and clients.
The prospecting efforts between sales and leasing, versus property management are a bit different. The best agents can work with sales and leasing quite well. Be aware of the property management opportunity and have someone to service it with you or for you. That being said you will need the right people in the agency business to take on the workload. Commercial property management is quite special. The same can be said for retail shopping centre management.
These are quite simple rules to follow; simple to create, but hard to do. Prospecting reluctance is a big issue for some agents. Take on the task and get better at it. Soon the business will come in.