Creating the Best Outcomes in Commercial Real Estate Brokerage

two business men walking in street.
Professionalism is a big part of commercial real estate brokerage.

Commercial real estate brokerage can be a highly profitable industry to work within.  In saying that, it can also be a difficult industry if the right people and processes are not applied correctly as part of a plan and targets process.

There are some rules skills to develop across sales, leasing, and property management.  There are some real knowledge challenges to address and resolve with office property, industrial property, and retail shopping centres.

Here below are some ideas from our eCourse Snapshot.

What are your targets?

The message here is that you can and should develop some real targets in your business to define and improve the outcomes of your commercial real estate brokerage.  It really doesn’t matter if you are part of a large team, or if you operate individually.  Here are some valuable targets to work towards:

  • Commissions written per transaction
  • Listings generated within a defined area
  • Exclusive listings vs. open listings
  • Signboard presence within a defined territory
  • Referral business created from every successful transaction
  • Repeat business from existing clients

Everything in commercial real estate today comes back to results and activities.  The right activities will always produce momentum, and the best activities can then be tuned over time to achieve some real momentum in listings, clients, and commissions.

Understand your local commercial property industry

Nothing remains the same in our industry, and the activities that you undertake each year should be shaped and changed based on current market activity and trends.  In other words, every broker and agent should be tracking personal efforts and property indicators.

Through a simple set of key performance indicators every broker and agent can monitor their activities across prospecting, listing, time on market, and deal conversions.  A focus on quality listings and better clients will always help boost enquiry levels; database growth can be part of that process.  A good quality listing will always encourage the players within the local property market to display their hand and connect with you.

Why struggle?

When an agent or broker is struggling in the property market it is usually because they have not focused on the best listings locally.  They are also avoiding the importance of exclusivity in listing conversion.  You cannot dominate the property market without exclusivity.  You must control the quality listing stock and the clients that you work with.  Those simple rules need to be remembered at all times.

Identify the strengths and weaknesses in your property market, and then adjust your business efforts accordingly.  Improve your skills were required, and start talking to the property owners locally.  You must control your listing stock and your clients.

Where are the opportunities?

Look for the opportunities and look for the weaknesses in your local area.  Understand what’s happening when it comes to property investment, occupancy, and business sentiment.  Consider the following questions:

  • What segments of the market are showing the most enquiries?
  • What are the tenants and the buyers looking for when it comes to property occupancy or purchase?
  • What is the supply of property today and how is that being impacted by current and future demand?
  • How are prices and rents trending in today’s terms?
  • Are there any threats on the horizon when it comes to commercial real estate in your town or city?

So there are some valuable questions to consider here as you establish your commercial real estate business.  Undertake a regular assessment of market conditions and relate those market conditions to your personal skills.

Practice and improve your processes at every opportunity.  Soon the commercial real estate precinct in which you operate will start to present opportunities that other agents and brokers have overlooked.

You can get more tips about commercial real estate brokerage growth in our eCourse right  here.

Commercial Real Estate Podcast 232

Commercial real estate podcast
Commercial Real Estate Podcast

Its the time of year where we can still create some real momentum in the property market.  There is still some 2 months of opportunity and transactions to be sourced.  As you focus on that idea, understand and remember that how you work through the next 2 months will impact the way in which you start 2015. 🙂

I have put 4 audio programs in this recording below.  All different topics, but all very relevant to what we should be doing in the property market today.

Here are the topics:

  1. The 3 common mistakes that most agents make, and how to avoid the problems.
  2. Why you should think about your ‘opening statements’  as you work with new clients and prospects.
  3. How to work more productively with property investors this year.
  4. How to go about routing inspections in commercial property management and why the process is really important to the ways in which you help your landlord clients.

These are all parts of the eCourse ‘Snapshot’.  You can get more of those eCourse ideas and templates by joining up right here.

Here is the audio recording for you today:

The Important Features of a High Quality Tenant in Commercial Real Estate Brokerage

office property foyer
Focus your leasing efforts on quality buildings and quality tenants.

In commercial real estate leasing today, the first tenant that you find to fill a vacancy in a property may not be the best tenant for the investment over the long term.

Ultimately you need to consider first and foremost the future of the property, the improvements within the asset, and the investment targets of the client.  You can then choose the best tenant by type and market the property accordingly.

The marketing strategy behind the leasing requirement will allow you to drill down into the factors of attraction that apply to the vacancy.  You want to attract the best tenants for the location.

Information

So you will need some information to assess about the property, the client, and the local area.  The depth and the strength of your research will help you match your services to the requirements of the client and the property

Before you lease the property and the vacancy understand the client first and foremost.  The client as the landlord owning the property will have certain targets to recognize including the following:

  • How long do they wish to hold the asset?
  • What are the requirements of cash flow from the lease?
  • Are there other tenants within the property to support the rental return?
  • In any medium to large property, you will need to review the lease expiry dates, rental structures, and occupancy pressures before you lease any vacancy to a new tenant.
  • Are there factors of renovation that need to be incorporated into the tenant mix and the lease structure?
  • Are there factors of risk that need to be incorporated into the property performance plan and the overall leasing strategy?
  • Has the client diversified their property portfolio across a number of different locations? Diversity brings with it other strategic factors to consider.

In answering all of these questions, you will have a reasonable idea of the best tenant by type and by location.  Understand how the tenant will fit into the tenancy mix to strengthen the overall property profile and income return.

Lease Priorities

Subject to all of the previous questions raised, you can drill down into the best types of tenants that suit the asset and the investment targets of the client.  A good tenant for an investment property will usually bring the following factors to the asset:

  1. Stability – Every tenant should be assessed for stability before you commit to lease negotiations. You will need to review their business history, other locations of occupancy, and talk to the key people.
  2. Income – Look at the levels of rental that apply in the local area. Will you be leasing the property on a gross or a net rental basis?  What are the market rentals that apply respectively?  How can you improve the income over time through rent review structures and strategies?  How long should the lease be?  All of these questions will impact the income for the asset.  Answer the questions before you negotiate with the tenant.
  3. Profile – Some tenants will bring with them a business profile that is attractive to the property. A business brand or a business profile can bring a marketing advantage to the property.  Some franchise brands also achieve the same enhancement.

Taking these three elements into account you can do something with your lease negotiation.  You can give the landlord some solid reasons to negotiate effectively and directly with the chosen tenant.  Most landlords will cooperate when it comes to attracting a new tenant in a stable and strong lease arrangement.

You can get more tips about commercial real estate brokerage in our eCourse ‘Snapshot’ right here.