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.