In commercial real estate agency, you will need to interact with many different people in differing circumstances. To improve your chances of success, it pays to refine and practice your dialogue for the demands of our industry. Practice like this will help you in so many ways including market share, listing conversions, marketing adjustments, and deal conversions.
Our industry is competitive in many different ways, and on that basis personal dialogue improvement should be part of your skills upgrade.
The following situations are highly competitive and arise frequently each day:
Prospecting for new listings and prospects to serve
Talking to property investors and business proprietors in the local area
Identifying property changes and opportunities
Inspecting properties with buyers and tenants
Inspecting properties with property investors
Presenting and pitching your professional real estate services with property owners
Negotiating a sale or a lease transaction
Qualifying prospects and clients
Closing on the necessary documentation as part of a sale or a lease
Moving a transaction forward through the terms and conditions of the deal
Keeping the clients, tenants, and buyers motivated as part of the transaction
Working with solicitors, accountants, and other professional people
Referral business with current clients and contacts
Lead generation through people that you know or want to reach
This list can be quite daunting considering that many variables exist in each situation. If you cannot communicate well and show that you are a true commercial real estate professional the market will soon avoid you.
The longer you stay in the industry, the more experience you will have in each of the above matters. You can however fast track the process through some deliberate dialogue improvement and role playing.
The ways to improve your dialogue will involve a strategy and process. Here are some ideas to help you get started.
Share the challenges of the market and your clients with the sales team. You can then discuss how you would respond to issues and challenges.
Watch what other agents are listing today. Create some alternative marketing packages that you can use as examples in role playing.
Once a week take the sales team to your listings and talk them through the properties as you see them. Sometimes an extra set of ‘eyes’ will help you see alternatives in inspections, marketing and promotion.
Self-improvement is an essential part of our industry. When you take on the challenge of improving yourself, the industry takes on a new momentum. Practice and improve what you do and say.
In today’s commercial real estate market there are so many challenges for agents to address and conquer. On of the big ones is prospecting for new clients. Cold calling helps the process greatly but so many agents struggle with the rejection factor and the organisation that is required on a personal basis.
Here are some tips on audio MP3 to help agents with their prospecting efforts and outbound calls.
When it comes to operating a commercial property management department, you need to set some performance indicators that will help the individual managers match their services to the needs and expectations of the clients. That being said, many clients will have particular needs when it comes to property performance, tenant mix and tenant management, reporting, and income generation. This is all the more reason for the use of the manager benchmarking and indicator assessment process.
Without relevant indicators, you will fail to see any shortcomings in performance and eventually some property management clients will move to other agencies for their management needs. It is a known fact that the property management process is demanding and time consuming. Many property managers cannot handle the pressures and organizational issues that come with the job.
Time versus fees
Some properties can be particularly time intense for a variety of reasons; that being said, the fees for service should be suitably structured so that time allocations applied to the property are covered in the base management fee. Far too many agencies set their fees based on industry standards rather than services to be provided to the property.
So you need some performance indicators to track as part of the function of your property management department. Each week those performance indicators can be reviewed as part of the regular department meeting.
The primary object of the indicator process is to understand where there are any shortcomings and failures within the services provided to clients, or the overall division. Here are some typical indicators that you can merge into your review process each week:
Monitor the vacancy factors as they apply to the greater portfolio. Set yourself some benchmarks that are regarded as the limits of vacancy above which you will or should not go. Some properties will have greater problems with vacancies and on that basis they will need a specific leasing focus and more complex leasing services. Some property managers will not be managing their vacancies in accordance with the standards of the business. This assessment process will help you identify those managers that are not giving the right attention attention to the leases and vacancies in their portfolios.
Monitor the aged debtors and the arrears within the portfolio. Split those numbers into property managers and client portfolios. Look for any discrepancies that can apply to the recovery of arrears monies on behalf of clients. Pay particular attention to the larger portfolios and the ways arrears and aged debts can be hidden within the tenancy mix. An aged debtors report by client and by property should identify tenants that fall into this category.
A big issue within the management of a portfolio is risk management. Various risks apply to the function of a property on a daily basis. The greater number of tenants and customers within a property, the greater the exposure of the client and the agency to risk events. If you manage a commercial or retail property, you are in charge of the risk of problem and should have a specific program of risk management that is reported to each week by each separate property manager.
Some landlords are demanding when it comes to the performance of their property and the quality of reporting. That being said, they are entitled to receive what they require when it comes to property management services. The agency does however need to get the fees correctly set for the services provided. That’s where most agencies fall down when it comes to matching fee generation and services. Understand your landlord clients, your fee structures, and ensure that both issues are correctly harmonized.
The responses of a property manager to the maintenance needs within a property should be tracked. Failure to address maintenance issues in a timely way can expose the agency and the client to liability and negligence claims.
Lease management, tenant retention, and tenant management are all specific lease and income issues. They require specific systems and solutions on the part of the manager within each property under management.
Look for leasing opportunities, lease renewals, tenancy relocations, rent review negotiations, and specific tenant expansion or contraction requirements. They can all be opportunities for property income improvement but also fee generation. Every property will produce different pressures and opportunities of this type, and on that basis have a fee structure that can be applied for the extra work within each of these categories.
This is just the start of the indicator process; there are other things that can be added to the list. That being said, there is a real need to monitor the performance of each property, each client, and each manager. The performance indicators will help you do that. The long term benefits are a stable property management portfolio and clients that trust your services.
Far too many commercial real estate agents look for excuses not to make cold calls and prospect in commercial real estate. Here are my thoughts on that to help agents develop better prospecting systems and models.
If you have been struggling with cold calls, now might be a good time to consider lifting your skills. Have a listen to the audio.
This is part of a larger commercial real estate training program on cold call prospecting and networking for agents by John Highman.
You can check out our other website for more information on that.
In commercial real estate agency the tenants that you talk to must be qualified before you spend a lot of time with them. Most tenants looking for new or alternative premises to occupy will have spoken to quite a number of local property agents; on that basis you are just another person to get information from. Asking the right questions will help you work with the right tenants in the right way.
Most towns and cities will have a good supply of vacant premises available. We have some good listing stock to work with. If you want to dominate the local leasing market for your property type, it is wise to focus on the best property locations and the quality properties. In that way you will move more listings and do so faster.
Here are ten questions to ask prospective tenants before you get deeply involved in matching listings and undertaking property inspections:
Find out just who you are talking with and determine that they are the principal decision maker that is looking for property to lease. This issue gets more complex when you are dealing with a company or corporation. You may be talking with the local business manager but they may have little decision facility.
Understand their property requirements in location, improvements, car parking, area of premises, permitted use, and rental budget. These simple facts will help you with creating a short list of premises to look at.
The services and amenities in a property may be of relevance given the way the business or tenant operates. Staff and customer numbers will place some pressures on property choice.
A lease can be negotiated on the basis of gross or net rent. Through direct questioning you can see what rent types could suit the tenant. That will then influence the choice of property, the lease negotiation and the initial term of the lease in years and or months.
Ask them about any contacts they may have made with other agents. If your market is dominated by open listings it is likely that the tenant has looked at a lot of your listing stock already; on that basis you can see your commission from a lease agreement ‘disappear’ due to another agents introduction to the same property earlier.
The ideal timing of property changeover will give you an idea of just how important the move of premises is to them.
When you have got these facts sorted and identified you can move to the next stage of property selection and inspection. A wise leasing agent will get all the leasing the facts on the table and clearly identified before the hard work starts in property identification.
In this property market, you really do need to have a business plan when it comes to your personal commissions and listing opportunity. You need to set some benchmarks that can take your commercial real estate agency career forward through growth and opportunity.
For many salespeople and agents the process of business planning is relatively detailed and boring. It is not unusual to find many business plans created by commercial real estate agents and then overlooked. Perhaps the process requires a different name to help the acceptance that it requires as a critical part of the agency process.
I like to call the business planning process that of ‘strategic growth’. It infers that the matter is important and that it offers opportunity for the agent and the agency. On that basis you have a real reason to establish the plan and implement its momentum. It is a very personal process and cannot be delegated to anyone else.
So what do you need to improve your market share and your income over time? Here are some points of focus for you:
A good database of quality clients
A source of future opportunity in sales and leasing activity
Dominant market share
Exceptional skills when it comes to marketing, presentations, negotiating, and inspecting
The knowledge to do the job at a high level with accuracy and relevance
To achieve these very important goals, you need to research the right information and make some key decisions. Here are some ideas to help you get started:
Understand the local property market and its activities over the last few years. Will the property market be changing over the next four or five years? That being the case, can you service that change? Will you require further information and knowledge? Will the change give you some opportunity in sales or leasing activity?
Look at the upcoming opportunities in the market and the growth potential of the business and community segments. Can you service those growth segments and in what way?
Assess the competitors that you will be working against when it comes to new listings. Are there any competitors that will present you with challenges when it comes to market share? What can you do to be different and better than those competitors?
Understand the role that technology and marketing plays in the local area when it comes to new listings. Can you bring anything new and fresh by way of technology and marketing to your listings?
Your property location and market share is likely to show some trends and have relevant indicators when it comes to average deal size and average deal type. That will then drive a commission average from every transaction. How many transactions will you need to make from your target market segment on an annual basis to achieve your income? Is there business available for you in that segment, and how would you tap into it? What can you do that is different when it comes to building your market share?
Taking all of these things into account, you really do need a business plan or a strategic plan to take your listing and commission opportunity forward. In an average calendar or financial year, you have approximately 10 months of listing and deal opportunity. The rest of the time will be absorbed in community festivities and school holidays. For this very reason, your plan is critical to your progress and success in the industry as an agent. Focus your efforts in that 10 months of time so that you can build a pipeline of solid income and client growth in commercial real estate.
In commercial real estate agency today, you need to be consistent as a salesperson or agent with your goals in sales and leasing. The actions that you take each and every day should be planned and directed towards the key performance indicators in your business. The goals that you set should be central to the performance indicators.
Far too many agents struggle when it comes to listings, commissions, and market share. The main reason for this is usually centered on a lack of focus. That being said, every agent can take charge of their current situation and improve significantly in personal performance. They simply need to create the necessary focus and drive. It all comes back to goals.
Many things have been said regards the requirements of goals and business targets in our industry over the years. The same rules still apply in commercial real estate today as the market goes through its changes. Every calendar year or financial year there will be seasonal adjustments to listings and enquiry in sales and leasing situations. Top agents understand how to read the signs and adjust their services accordingly.
Here are some tips to help you with goal establishment and management.
In the first instance, you really do need to know that your property market has identifiable growth in sales, leasing, and property management opportunity. Review the history of the area to understand exactly what has been going on over the last five years. Research the number of new properties coming into the market today and new developments under consideration.
From the previous point, you can identify the segments of the market that are growing and that will have the best opportunity for you as an agent. From that segment identification, you can develop specialized skills and the knowledge that will help you stand out as a top agent in the local area.
Review the number of competing agents that will have an impact on your market segment. Are some of those competing agents regarded as top performers today, and what has made them stand out in that way? You can learn from these other agents. Look at their marketing strategies, their prospecting processes, and their personal branding initiatives through the region. In many respects, you can replicate the good things that others are doing.
The goals that you set should be based on key performance indicators. In this way you can see improvements and adjust accordingly when necessary. The indicators to track should be based on your prospecting processes, listings, meetings, property inspections, successful transactions, and size of commission. Pay particular attention to the quality of the clients and listings that you are involved with. Top agents usually focus only on quality and will walk away from listings and clients that can waste their time.
When you set the right goals as part of your agency business processes, be prepared to adjust them on a monthly basis throughout the year. Things will change in the local area. Look at the market with open eyes and clear thinking processes. When something works, do more of it. When something is not working, change it.
In commercial real estate agency, the marketing process that you choose today will have significant impact on the outcomes that you require with new inspections and fresh negotiations. Every property that you take to the market should be carefully structured into a targeted marketing campaign.
It is interesting to note that most commercial real estate markets change throughout the year and will have seasonal selling and leasing cycles. This then says that the timing process and the method of marketing that you choose for a property will be quite important and seasonally adjusted.
Here are some marketing tips to help you with promoting a listing and optimizing the enquiry that you achieve from the promotion.
Review the property with the client prior to forming any opinion on marketing or promotion. Walk around the property together to look at the strengths and weaknesses that the property provides. Ask the client about the history of the property and the reasons for their actions today in seeking a sale or a lease. Get to the key facts of client motivation today.
Given the previous point, you can now relate to the other properties in the market that may be competing against the subject listing. Show the client some of those other properties and provide details of current marketing efforts, prices, and rents. Your new listing needs to be well positioned in comparison to other listings for attracting better enquiry. That can very well mean a particular method of sale or lease and choices about marketing.
At any given point of time, the enquiry coming into your office relative to different property types should be tracked. The tracking process will help you with conditioning clients in the listing and marketing process. When you understand what is working to get more enquiries, you can take better actions with each property type.
Will the property require any preparation work prior to marketing? The first three or four weeks of any marketing campaign are quite important. Your enquiry rate needs to be optimized for that time frame. Any hurdles or obstacles that can be seen in the property when inspecting should be removed prior to commencing the campaign.
Clearly define the target market for the listed property. Ensure that the choices you make in promotion are matched to the target market in every respect. Exclusive listings require much more effort when it comes to promotion. They also have a significantly higher conversion factor to a successful transaction. On this basis you should be encouraging the client to choose the exclusive listing process for their property.
Today we are blessed with the technology and the resources that will help us promote a property listing directly and effectively. Package the listing correctly for the client so that you can optimize the inbound enquiries for the property, and therefore gain more inspections and negotiations.
In commercial real estate agency your sales presentation or pitch should be simple and direct. In saying that I still see so many agents front up to the client’s office for the presentation looking like a ‘pack-horse’ with every conceivable marketing tool imaginable. What a big mistake!
First impressions mean a lot in our industry. As you enter the client’s office or work environment, the message you send must be simple and professional; you must look the part in every respect. How you dress, what you say, and what you do in the first 2 minutes of the meeting will impact the remainder of the client connection.
Your sales pitch or presentation has to be simple. The client has to grasp what you are talking about and see some clear and relevant solutions to their property challenge. When you complicate things, you lose the clients attention.
Top commercial real estate agents know how to be relevant and real for the current property market. They prepare the right information that connects to the current market conditions, the property, and solutions available to the client.
The agent that wins the listing is usually the one that has fully prepared for the meeting with high level content and facts about the market. They also offer specific strategies that go beyond the ‘generic rubbish’ that ordinary inexperienced agents provide.
Here are some ways to connect with the client in a professional sales pitch or presentation today:
Ensure that you have seen the property before the meeting so you can relate to it in many different ways.
Check out the other competing properties on the market nearby. Be prepared to talk about them and how they are being marketed (successfully or unsuccessfully).
The only tools you need for a presentation will be your marketing folder, and perhaps a laptop computer.
In your marketing folder have listing forms, samples of marketing, maps of the area, subject property details (searched and checked), Gantt charts of sales and leasing processes, testimonials, and market research information.
In your laptop (or tablet computer) have plenty of photographs of the property so you can run a slide show as part of the client connection.
Have a brief marketing proposal ready with recommendations as part of taking the subject property to the right target market.
Get away from long and tedious proposals for the client to read. Use dot points, checklists, graphs, and photographs in the proposal. That will help capture the client’s attention.
Ensure that you have a few good stories to tell about some other property owners locally that have gone through the same pressures as the client you are talking to. Stories always help the connection and will be appreciated by the client in the presentation. Good stories will be remembered.
Simplify your strategies when it comes to meeting new potential clients. Take less information and clutter with you, but make sure that the things that you do have are of the highest and most relevant quality. Practice your pitch beforehand. Show the confidence that the client wants to see in the listing process.
In commercial real estate today, every agent should have an ongoing ‘client loyalty’ program to help with growing market share. In this way you can stand out as a relevant and top quality agent. It is then difficult for the client to overlook your presence and availability when it comes to taking a property to the market for sale or lease.
So what can you do to structure a ‘client loyalty’ program? Here are some ideas:
In the first instance you should give it a name. Without a name the client does not know or feel that they are any different to others in the local area that you may be working with. In the absence of anything else to use, you can call your program the ‘VIP Client Connect’. Tell the client that they are part of this ‘exclusive’ group. Show them what will be happening and why that will be of benefit to them.
On what basis will you be selecting ‘VIP’ members for the group? Will the criteria be based on property location, size, value, portfolio type, or frequency of business?
The program should be about the client and on that basis they should get something out of it. There is no point in structuring a program if you are going to do nothing with it. What can you do for them as part of their membership in your group of ‘VIP’ clients? How will they know that they are ‘special’ and that you are doing extra things for them?
Focus on ‘loyalty’ with these clients and not ‘discounts’. Professionalism should be the backbone of the program; discounts have no place in a commercial real estate client relationship if professionalism is your goal. Ensure that you are sending a message of high quality and comprehensive services in sales, leasing, and property management.
Provide market updates that are comprehensive and regular. They can be sent directly to the client with links to supporting resources and research on your website.
Your database should segment these ‘VIP’ members from the others that you work with. The database should also have the ability to capture the details of ongoing contact.
Establish a special newsletter for the process of ‘VIP’ contact. Brand that newsletter uniquely and personalise the text with specially selected properties.
Set up monthly or quarterly industry briefings that can be held in your office for selected clients. Invite other industry professionals (solicitors, accountants, and planners) to complement your presentation.
Provide a private access part of your website so the ‘VIP members’ can get to regular industry updates.
Make it easy for these special people to make contact with you 7 days per week. Give them the mobile cell phone numbers to use in the event of questions or concerns.
You can do more with this list based on your property speciality and your location. Make your clients and prospect feel special in your business. The rewards will be many.
In commercial real estate agency today, it is essential that we take all necessary steps to understand the potential of the property transaction and the client. A complete and comprehensive understanding will help you when it comes to a successful outcome for both you and the client.
This then says that you should really take the time to know the key facts that relate to the particular property situation and the requirements of the client. Here are some questions to help with that process:
Define the property from a legal perspective so that any listing and negotiation process can be correctly implemented and documented. Copies of supporting documentation, titles, owner representations, deeds, and conversations will be central to the accuracy of the listing. Look for any missing documentation or confusing circumstances. Resolve any of these challenging issues as part of the listing process. Review all of the property ownership documentation prior to any marketing campaign commencing.
Many properties will have extended issues to investigate. They could relate to rights of way, easements, encumbrances, orders or notices. The leases on the property may also have an impact on any sale or property investment situation. This then says that you must be accurate and detailed in the property listing process. Any errors made in documenting the listing can come back to ‘haunt you’ later during the negotiation or due diligence process. Learn how to interpret property documentation, leases, and factors that relate to the tenancy mix.
The local property planning process will have impact on building usage, improvements, tenant occupancy, future developments, and capital growth. Take the time to understand the local property development plans as they apply in your region and for any particular listing. Look for any changes in the development plan that could have an impact on the property in the future.
If you review the history of the area, you will see certain trends that relate to prices and rentals. You will also see factors that have impact on marketing, listing, negotiations, and time on market. Stay ahead of the current trends in property activity and the history of prices and rentals as they apply for each property type.
Every client or prospect will have factors of focus when it comes to property ownership and portfolio development. Some clients will own a number of properties or seek to do so over time. This then says that some clients can be very valuable from an ongoing business perspective for a real estate agent. In saying this, the cycle of activity in commercial real estate is relatively long. It can be many months if not years before a client is ready to take the next step in their property investment and ownership plan. You need to stay with the client for the long term, nurturing the relationship wherever possible with relevant and real information.
A client or a property investigation can be quite complex. Look for the potential that the client or a property can offer you as real estate agent. Position yourself for ongoing service and support to the client. The business, new listings, and commissions will soon be easier to attract.