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Ways to Get Consistent Commission Growth in Commercial Real Estate Brokerage

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Commission growth in commercial real estate is a planned process at a personal level.

In commercial real estate brokerage, the gross commission that you earn each year will be critical to the overall income that you generate over time. Look for the trends and pressures in your income.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Understand your current levels of earnings as they apply to sales and leasing activity. Compare those numbers to the industry averages for your town or city and within your industry, and then identify some real ways to improve commission growth. Commercial real estate success is really all about planning and action implementation. You cannot be complacent as an agent or broker.

 

Location information

Check out the level of competition in your location so that you can understand the people that you will be pitching against when it comes to new listings and client relationships. On average, there will always be a small selection of top agents converting business successfully in your town or city.

Most of the other agents locally will be ‘typically’ average when it comes to business activity. Look at their strengths and weaknesses to see how you can learn the right strategies and skills. Improve your skills and improve your position.

 So your target or goal should be to reach the levels of a top agent for your location controlling your own client base and your listing activity.

Exclusive listings are the way to achieve that momentum. Your marketing processes should be considered accordingly so that you are perceived as the property ‘expert’ for the area, and the person that can convert most of the enquiry at the right time. You will need exclusive listings to do that, so refine and improve your listing pitch accordingly. Why should a client list their property with you ‘exclusively’? You must have a good answer that is relevant to your clients.

 

Costs versus Income

Each year you should be looking for ways to increase your gross income whilst maintaining levels of control on your costs of sale or listing. The costs that you will normally be carrying professionally in your career will typically include:

 

  • car expenses
  • telephone expenses
  • some personal marketing activities
  • computer costs
  • Internet related fees
  • stationery costs
  • desk fees
  • franchise costs

 

Many agents and brokers operate under different business models including those that apply to a franchise situation, an independent operator, and/or a salary based professional as part of a brokerage team. It doesn’t really matter what business model you choose to work to, but it does matter that you are suitably rewarded for the transactions that you create and the commissions that you convert.

 

The expenses listed above will easily consume a lot of commission before you really get started in your business activities and ‘break-even’ so develop a plan to take yourself forward.

 

Ways to Grow Your Numbers

 

Here are some ideas to help you monitor and grow your gross commission numbers in your commercial real estate career:

 

  1. THE INCOME FACTS: Look at the listings that you have currently to determine the average level of commission per sales and lease transaction. Smaller transactions are generally a lot of work, and they can consume a lot of your time. Choose the types of listings of suitable size that can help your real estate business thrive and grow over time.
  2. REPEAT BUSINESS AND REFERRALS: There will be opportunities for referral business after each and every transaction, and with every client and prospect relationship. Ask the referral questions at the right time so that you can grow good client-based relationships with VIP clients.
  3. YOUR BEST CLIENTS: Understand exactly what VIP client should be to you by profile, location, and property ownership. When you know what a VIP client is, you can target your prospecting within the town or city.
  4. CLIENT CHALLENGES: Some of your clients will have ongoing property needs. Make sure that you are connecting with them frequently and directly so that you can understand where the next property challenge will evolve. Constant contact will help you build those relationships as an industry professional.
  5. HONE YOUR PROPERTY FOCUS: Target particular properties that you believe will have a good chance of creating local industry activity and sales and leasing results as the case may be. It can take months if not years to break into a particular client or property ownership structure. Be prepared to make the right connections and grow your business relationships strongly and specifically.
  6. BUILD YOUR LIST: Your database should be personally established and regularly updated. If you want to thrive as an agent or a broker in your location, then your database will be at the centre of the process. The people that you talk to, your prospects, and your clients will all feature within your database for particular ongoing contact and professional support.

 

So these ideas are not necessarily new or different, but they are quite specific. If you want to get anywhere in commercial real estate brokerage, then it is the time to look at these issues raised and identify where you can build on your strengths and weaknesses as a top broker for the location.

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Commercial Real Estate Leasing Vacancy Solutions and Strategies

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Vacancies in office property can be resolved through strategy.

In commercial property management and leasing, you have to closely watch the tenant mix and the leases for any upcoming vacancy risk and or tenant in distress. The property market changes all the time, and each city will have unique pressures that can set the momentum to move tenants around and impact business performance.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Local Issues?

So what is happening locally for you in your location? Do you have clients and properties under vacancy pressure? It’s an opportunity to resolve. You really do need to know why vacancies are happening and then work on a strategy to resolve them.

Before I go too far into this concept, I will say that the leasing market is lucrative from a commission perspective, if you focus on one or all of the following:

  • Quality properties – some properties are better than others. Look for the differences in local properties and buildings in your location. Choose the better properties from a leasing perspective.
  • Larger tenancies – the size of the tenancy will dictate more rental and therefore more fees per transaction.
  • Corporate tenants – the companies and corporations in any town or city tend to need property help in relocating and expanding or contracting. You can have an appointment to locate their next property lease.
  • Particular property types – when you look at the rents per unit of area per property type, you will soon see the property types that create better interest from tenants and better rents. That is where you should focus your leasing efforts.

Given these 4 facts, you now know what types of leasing factors should feature in your prospecting model. Take deliberate care to stay within your set leasing criteria. You will then find the tenants and the better properties.

What value do you bring?

So why are vacancies happening in any building or location, and how can you help? To get to the answers, you really do need to look into the following factors and do the appropriate assessments:

  1. Rental pressures and shifts – rents that are consistently climbing will reach a plateau where business owners will resist leasing. In a city where rents are escalating, understand the realities of a business paying higher occupancy costs. What are the limits?
  2. Competing properties – other properties locally are likely to be competing for your tenants so watch the problem and intervene where necessary.
  3. Occupancy costs – rent and outgoings all add to the cost of occupancy; a tenant has to be able to afford the total occupancy package.
  4. Tenant mix problems – some tenants have issues with being close to others and other business types; look for those problems.
  5. Permitted use or exclusivity – in a larger building where you have multiple tenants, ensure the balance of tenant mix, and avoid giving away exclusivity (retail properties in particular).
  6. New properties being developed – any new property will shift the balance of supply and demand, thereby pushing businesses out into the leasing market.
  7. Landlord issues – some landlords are very difficult to work with, and will give tenants a good degree of frustration as part of lease negotiation and occupancy.
  8. Quality of services, amenities and improvements – buildings age as do the services and improvements.

From these things, you will find the properties and the businesses needing leasing assistance. At that point you have some advantages to work with.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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Checklist for Creating Clients for Life in Commercial Real Estate Brokerage

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Make your client list a personal process.

In commercial real estate brokerage, the clients that you convert and work with can give you plenty of property business over time.  Get into your database and split it up into client categories, zones, property types, and budgets.  Update all of the contacts in your database and reconnect with the best people.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Look for the quality clients that you can work with productively and exclusively over time. They will be your VIP’s when it comes to contact and service.

Understand how you can add value to their property situation and exactly when they should need that special help in solving an investment or property occupancy challenge. Refine your services accordingly.  You are (or should be) the expert so build your brand with your clients accordingly.

Quality clients are good business

So your good clients should be with you for the life of your real estate business. If you like, that by definition is the window of your professional career. Over time your real estate business then gets easier and more consolidated; that consolidation comes from the quality of your client connections. How can you do that?

Do you have some good clients now or some targeted clients that offer more property related opportunity to you? Think about these things:

  1. Industry updates – Think about your location and explore the things that are happening. Visit the local planning office to see what new developments are coming up. From the list of upcoming development applications, you may be able to write or talk about precinct enhancements and changes.
  2. Market coverage – Most clients like to know that they are working with an agent or broker that really controls the market for the location. Specialization will help you do that. Drill down into a segment such as offices, bulky goods warehousing, investment performance, shopping center leasing, and then look at your opportunities in each. Write articles and editorials about the specialty segments. Share those articles and information editorials into your social media channels.
  3. Use Social Media with focus – Most agents and brokers don’t use social media very well at all. They simply do not lift their social media profiles enough using relevant and high quality comments and content. Consider how you can be of value to your clients and prospects. What do they want to know about? What are their local property interests? From those 2 questions you can write specific articles, share statistics, create charts, and take photographs. The increase of electronic media tools gives you a lot of alternatives to work with.
  4. Treat your VIPs differently – When you know that a client or prospect is of importance to you, consider how you will interact with them over time. Be personal, relevant, and real in how you contact people and talk to them. Ultimately you want your VIP clients to remember you as they get to the next property challenge. It is a simple recipe to remember and market your skills and knowledge with.
  5. Seek referrals and contact people often – At a basic minimum, contact all of your clients and prospects frequently. That will usually be once every month, or any period up to 90 days. After 90 days the client and prospect contact process is less meaningful. Build a contact process into your database that sets the right client momentum and awareness through personal contact.

Put clients at the center of your commercial real estate business. Create relationships with your top clients that will extend for the duration of your professional career in property.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

 

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How to Avoid Procrastination in Commercial Property Management

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Get things started early in Commercial Property Management

In commercial real estate property management, procrastination can be a big issue or hurdle in getting the harder jobs done. Let’s face it, there are difficult things to do every day of the week in our industry. Have your people in the management team got the right knowledge, experience, and commitment?

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Workload pressures in commercial property management are usually consistently high. Free time and spare time is a luxury if and when it occurs. Most days of the week are quite busy. Stress can also be a problem for some people.

What is the Focus?

The best commercial managers are the ones that get the work done first and foremost every day. They prioritize their time so that they are effective in the best possible ways. So what are the issues that put the pressure on? There are many pressures arising from separate categories such as:

  • Tenancy management and communication
  • Landlord reporting and approvals
  • Maintenance contractor controls
  • Property performance to targets and to the budget

So the best property managers know how to optimize their time and will usually do so efficiently and directly. Any inefficiencies in the job role will usually create problems with clients and property performance.

Any team leader in commercial property management should be careful to select the right people for the tasks and the portfolio under management. The team of people within the division should work to a system or plan to help them get the work done and to control the assets in the best possible way.

Commercial Management Systems?

Here are some ideas to help you develop the best property management system and control process:

  1. SOFTWARE: At the top of the list would have to be the selection and use of a specialized software program controlling property performance. There are many different programs available for the task, and some are better than others. Typically, a program will need to control rental monies in all categories, arrears management, tenant communication, lease administration, critical dates, and property maintenance. The best programs tend to be somewhat expensive, however they provide high levels of property control and reporting. If you are going to manage high quality assets for quality clients, then you will need such a program.
  2. FILE ACCESS: Cloud based storage is always very useful. When the managers are out in the field meeting with tenants and landlords, cloud based storage can help when it comes to file access, reporting requirements, and all communications.
  3. CLIENT ACCESS SERVICES: Develop a dedicated client portal for all client communications. All of the client reports can be stored online within a dedicated portal for VIP client access and communication.
  4. TENANT COMMUNICATIONS: You can enhance tenant management through a special web site where any maintenance issues and communications are directed or first initiated. The website can retain all communications and redirect as required to the right people in a timely and efficient way. Like it or not, some of maintenance issues occur at the strangest of times, and you will need an effective communication process to handle those things.
  5. MAINTENANCE PERSON: As the property management portfolio grows, there are benefits to be achieved by employing a specialist maintenance manager. The manager can oversee the day to day maintenance requirements and unexpected portfolio issues for all of the managers.
  6. LEASE ADMINISTRATION: Appoint a year lease administration person to monitor the lease critical dates and upcoming lease changes and issues. The larger the portfolio, the more desirable, essential, and efficient you will find this position. A lease administrator will be a good addition to most property management portfolios.
  7. TRUST ACCOUNTS AND FUNDS CONTROL: The handling of monies, rentals, arrears, and property performance will require an experienced accounting person understanding the issues of lease documentation, tenant management, and property law. There is high value here in choosing the right person for the role.

From this list, you can see the specialties required in commercial property management. The same can be said for retail property management. Choose the best people and position them accordingly.

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How to Segment Your Commercial Real Estate Market for Opportunity

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Segment and split up the real estate market for better prospecting.

In commercial real estate brokerage today, you should segment your property market in a number of different ways so that you can find the opportunity that may exist currently and that which is predictable for the future.

Market segmentation allows you to work on the right property listings and people over a period of time strategically. In that way you can get faster results.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

So what do you need to know here?

Some listings are better than others. Some property locations are better than others. You also have a mixture of clients and businesses within the location to consider and connect with. Look for the variations and look for the people. Research will always help you find your leads and opportunities.

The right focus?

So you have some work to do when it comes to selecting the opportunities for your brokerage business into the future. Here are some ideas to do that:

  • Segment the geographical location – understand your limitations when it comes to time, and on that basis focus your prospecting efforts within a specific geographical location. Determine the zone or the precinct by both suburbs and main roads. Within that defined area, you should have sufficient new business opportunity to work with over the coming five years.
  • Select the correct property types – some properties will be more active than others when it comes to inquiry and activity. Undertake an assessment of supply and demand that applies to the location and the property segments. Look for the property types that create the most opportunity and change over the predictable future. You can then adjust your specialization across office, industrial, or retail as the case may require.
  • Develop the required property knowledge – when you have selected the property types that you can relate to and understand, a degree of local property knowledge will always assist you in working with sellers and buyers, together also are with local landlords and tenants. Every listing negotiation and property pitch should contain a good degree of market evidence and property knowledge. Understand what’s happening in the local streets and within the quality buildings when it comes to inquiry and a transaction activity. It is hard for a client or prospect to refute or dispute local market evidence. Make sure that you have all the required facts relating to the property type and the location.
  • Focus on quality buildings – some buildings locally will create far more activity and interest from the property market. It is not too difficult to identify those buildings and undertake the necessary research and investigation. Check out the tenancy mix, the vacancy factors, and the market rentals. Soon you will see a pattern of activity and opportunity that you can work with.

So there are some good things that you can do here from an opportunity perspective in commercial real estate locally. Always refine your strategies and focus over time. Understand what works for you in prospecting and new business, and the frustrations that you may need to resolve.

The property market will change many times through the year. The opportunities that you require will exist through that change and churn.