In real estate brokerage, the industrial property market offers good levels of entry and activity. Why is that so? It is because the property type is ‘entry level’ for investors both in complexity and cost. It is not hard for an agent to know what is going on in the industrial market place and get the facts of what a property investor in that segment may be looking for.
The aspiring brokers and agents that are starting up in the industry will find it easier to understand industrial property first and foremost. From that point other property types can be incorporated into market activities and prospecting.
From a career perspective, and to help you get started in industrial property sales and leasing, here are some ideas:
The industrial property market is usually the first to respond in an upturn and a downturn. Watch the shifts in the economy to capture the market changes and listing opportunities.
Businesses centred on manufacturing and bulky goods usually need larger premises to operate from. They will chose locations that are relevant to regional raw materials, transport, customer demographics, occupancy costs, and business operations. This then says that a top agent in industrial property will spend substantial time getting to know the local businesses and what they are looking for in business operations, expansion needs, and locational change.
Some properties in this category can be tenant and business specific. If that is the case, any landlord should take care in structuring a longer lease with appropriate make good clauses at lease end. Also allow a reasonable lead time for a tenant making a decision on the exercise of an option. If the landlord needs to find a new replacement tenant for a highly specialised property, it can take some time to achieve the placement.
In this market segment, a top industrial property agent will work on both leasing and sales opportunities. One thing can very well lead to another.
With the predominance of industrial parks and the clustering of industrial tenants and businesses into the one location, there are special factors of knowledge that apply to the title types and the permitted uses under the leases. Get to know how these things work and can fit into the zoning and planning regulations for the local area.
Industrial properties will have configuration and improvement issues to understand. That will include hardstand, warehousing, office space, staff amenities, car parking, security, and loading areas. Use and configurations will change. Get to know what tenants and businesses are looking for locally in property choice and occupancy.
So this is a good market type to enter into as a commercial and industrial property agent. If you enjoy the market segment you can specialise for many years and achieve.
Industrial property needs to be well-positioned with due regard for transport routes and transport access. Look at the road configuration and proximity with due regard to heavy transport access and deliveries to and from the property.
Some industrial tenants and properties require access to raw materials and the labour market. This could involve public transport or ports, rail heads, and airports. Look at the access issues here.
Power supply with industrial tenants is particularly important as they usually have a high load demands and extended hours of electrical load. Can your tenants access the power they require easily? It may be necessary for you to talk to the power grid authorities and the tenants in this regard.
Can the tenants dispatch their product easily into the transport corridors and transport facilities within the state? This is particularly the main roads, airports, ports, and shipping facilities.
Is the property located in a recognised industrial area surrounded by good and busy industrial tenants? Talk to some of the other local businesses to see what they think about the local area.
Are there any unsold properties or an abundance of vacancies in the industrial precinct and are tenants and properties in high demand? Look at those vacancies and get details of the asking rent.
Does the precinct feature an abundance of investment type property or is there a balance of Owner Occupation in existence? Could other tenants in the area be looking for properties to purchase and get away from the rental or lease issue?
What is the ratio of floor area between the office areas to the warehouse? Is that ratio too high or too low given the trends of occupancy in the local area? This will be relevant to the type of property and the customers that they service.
What is the height of the warehouse between the slab and the underside of the steel frame supporting the ceiling or roof area? That dimension can oppose or restrict certain types of storage and/or access by transport vehicles.
What is the access to the warehouse area from the main road fronting the property, and how many roller doors service that access? Are those roller doors motorised, do they allow the entry of modern semitrailer vehicles? Is there a need for other access doors in the future and can they be easily installed?
Is there an abundance of good lighting, or natural lighting in the warehouse area providing good visibility?
What is the load tolerance of the warehouse floor for heavy vehicles, what are the dimensions of the floor surface slab and does it provide ease of access for loading vehicles and trolleys?
What are the dimensions between the supporting roof columns of the building? This will dictate the types of storage and pelleting load area which may affect any future tenant occupancy.
What fire prevention systems and security systems exist in the premises that will be relevant to occupancy?
Is the building fully compliant with health, safety, and fire regulations? It may be necessary for you to visit the local building authority to check this.
What is the external fabric of the building? Is it easily maintained, does it provide a quality appearance?
Is the internal warehouse suitably lined and insulated given the property usage that is expected?
Is the property flat and suitable for trucks and or loading? • Does the office area provide good quality presentation, services, amenities, and business environment which will support the tenant in their future occupancy?
Is there any asbestos in the building, and if so, is it documented and maintained within regulatory and legislative management practices?
Ask about environmental risks and threats from the property or from the occupancy.
Look at the local maps to see how the property fits into the location and the geography. Look for things that can impact property usage such as rivers and creeks that could flood. Look for slippage potential if the block is sloping or near steep areas.
What does the zoning of the property allow it to be used for? Check out the local development plans.
Has the block been filled or re-levelled? Get details of this. It may be necessary for a soil report to satisfy buyers or tenants as to property suitability for their operations.
So you can add to this list based on your local area and the types of industrial tenants that you deal with. Formulate a checklist from this and the other things that you can add. As part of the inspection process, take lots of photographs of the improvements and the property itself. Loading areas and turning areas for trucks will be of real importance to many property owners, as will hardstand space in the property.
How can you close more property presentations and sales pitches? The pitches that we do as real estate agents in the one transaction are numerous. Think about these to name a few:
Pitch to get a meeting with the property owner
Pitch to get a listing opportunity
Negotiate on the listing creation
Sell the advertising package
Attract the right enquiry
Present the property to the buyer
Negotiate and close on the buyers offer
Negotiate with the seller regards the offer from the buyer
One of the real secrets in pitching your services or offering is to help put the client or other party in some degree of perceived control. In simple terms you give the client some options to consider around the key decision. When the client has options, they do not feel like they are being closed. The key decision becomes simpler and easier. I call this the ‘Option factor’.
The nature of the human mind and psyche is that it does not want to be forced or manipulated. You can use this ‘Option factor’ as a tool of negotiation in commercial real estate sales and leasing.
When you work in commercial real estate sales and leasing, the territory dominance that you achieve is largely created by your own personal endeavours.
There are far too many ordinary salespeople out there today. When the property owner wants to sell or lease their property they really do need the agent with territory dominance. That is the agent that knows:
Where the enquiry is coming from
What the enquiry is looking for
The limitations on finance in the local market
The marketing campaigns that really work
What deals are being done and on what basis
How to draw in the right target market for the property.
When to close in on a genuine enquiry from a buyer or tenant
Has the majority of quality property listed in the local area
Whilst every agent should know and provide these things, the reality is that many do not do well on the performance specifics.
Looking at these simple issues, they are all related to things that you as the real estate agent can and should take to the seller or property owner as part of the sale or leasing campaign. This is where value and service stands alone as the best way to attract the client to your specific property solutions. Market and territory dominance supported by knowledge and experience will help you attract more quality listings.
When working as a commercial real estate agent you will see many types of property in many situations and levels of quality. When it comes to selling the property, there is a factor known as the ‘liquidity factor’, and it will impact the sale and price outcome. In simple terms the ‘liquidity factor’ is the time it can take to sell the property.
By comparison to other types of investment, commercial property has a high liquidity factor as it takes time to sell it; usually days or weeks. The share market as an investment type is just the opposite with a low liquidity factor, as shares can be sold almost within the hour. People choose to invest in commercial property as it is relatively stable and less volatile than shares. There is however the liquidity factor to contend with when it comes to property sale time.
It pays to take the seller of the property through the liquidity discussion so the right choices are made when you take the property to the market for sale.
Essentially the ‘liquidity factor’ is all about the time the property will take to sell. It is driven by things such as these:
Location of the property
Size of the property
Amount of money required to purchase the property
Lease profiles and documentation
The age of the property in the local area
Changes to the population locally
Changes to the business sentiment locally
Methods of sale to be adopted
Identity of the property in the local area
Price pressures locally
Comparable or competing properties in the local area
All of these factors will have positives and negatives when it comes to the time of sale. Importantly it is up to you as the real estate agent to help the seller understand the ‘liquidity’ of the property and how it will impact the choices of property sale.
Taking daily action in retail leasing is a strategic thing that all retail brokers and agents should work towards as part of their working day. That is particularly the case if they are looking to boost their commission and listing results. Retail is a bit different than the other property types; it stands alone as […]
When you are to sell an industrial property, there are things to think about and strategies to apply. In this video we discuss the methods of sale for industrial, but also the investigations that you should undertake of the local area. Boost your industrial property listing results using some of these ideas. Know your property […]
Every offer presented in commercial real estate should be positioned for the best levels of control and the desired outcome for your client. The parties to the deal should be part of that positioning process, and your client is the ultimate beneficiary. Do you control your offer and acceptance process? Good documentation will help […]
You should never leave your commercial property adverts untouched for more than a couple of weeks. The issue here is that you can and should refresh your exclusive listings so you can build your target market interest. The first impression of a property advert may be ‘plain and boring’ to some people. So the revamping […]
There are some core competencies in commercial real estate today that are highly relevant to getting results in any agent career. Those competencies are simply non-negotiable. They are proven from the property market around the World and they are the ‘indicators’ of ‘top agent performance’. If a broker or an agent wants to achieve […]