Posted on

How to Engage with More VIP Clients in Commercial Real Estate Brokerage

city buildings on edge of harbour

In commercial real estate brokerage it is important that you segment your client list into groups and opportunities. As part of that, you should identify the VIP clients that you know and those that exist in your local area. They should be the primary targets of your prospecting model in an ongoing way. (NB – you can get our free commercial real estate training right here)

In this audio program, John Highman talks about the strategies behind VIP database management and the professional skills of commercial real estate sales and leasing today.

Learn how to improve your real estate business and grow the opportunities with the right clients in the right way.

You can access the audio program right here:

Posted on

Tenant Management Tips for Commercial Property

Human shadow figures in a building uid 1461085

When you lease and manage commercial property today, you really do need to monitor the activities of tenants within the tenancy mix and be ready to respond to occupancy issues.  Be aware of the changes within the building and the activities of tenants in each of the separate premises.

(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)

Why worry about this?

It is better to be ahead of the tenancy problems before they become overly large or pressured, thereby impacting the landlord and the asset.  It is better to negotiate with the tenant through their trading or occupancy issue at the earliest stages.

  • Protect the tenant mix, lower the vacancy factors in your asset, and keep your good tenants for the long term.

Most buildings today with multiple tenants in occupation will have some form of tenant retention plan to consolidate occupancy and cash flow over the foreseeable future.  Within that document will be the necessary lease strategies, rental indicators, and tenant profiles.

So what is it?

It is a landlord based investment planner to help with occupancy planning.   Shopping centres and large office towers would have such tenant planning processes in place, and then they adjust the plan every year based on what can be observed and predicted in tenant occupation and known vacancies.

Tenant retention planning?

So the retention plan is a document that allows you to prepare at the earliest stages for the worst and best possible leasing scenarios, and control the best outcomes.  In other words, you can stay well ahead of the leasing and tenant mix problems before they get out of hand.  Isn’t that what the leasing strategies should be in any investment property?

 

  • Look for the indicators and the pressure points of occupancy.  Given the pressures of the economy and business today, tenants can sometimes suffer with pressures of cash flow emanating from variations of staff structure, seasonal sales, production, and intellectual property.

 

So what can you do here?

On a regular basis look at how the tenant and their business appears to be tracking, and wherever possible identify any weaknesses that could impact occupancy.  In simple terms, you stay close to the tenant in every way possible through a series of telephone calls, meetings, and email exchanges.  You take plenty of notes, and you negotiate through any issues as early as possible.

Here are some ideas to help you with that lease management strategy:

  • Inspect the property and the tenancy frequently so that you can see when changes are underway.  Where necessary, take photographs and plenty of notes to support your observations.  You can see variations with staffing, management structures, production, on-site storage, and business activities.  Look for the indicators and asked plenty of questions.
  • Stay in contact with the decision makers of the business so that you can identify when they are under any particular pressure of occupancy.  In any corporate structure there will be different levels of management to interact with.  Take notes and make observations when it comes to any meetings with tenants and management personnel.  A simple thing evolving from a meeting today can be a major issue in the future.  Understand the impact of a shift in rental or tenant occupancy within the asset.
  • Watch for any shift or change relating to staffing and management within the tenant business.  Are they still employing the same number of people? Has the management structure changed within the business?  When you see changes, ask questions.
  • The lease document will be important when it comes to enforcing lease conditions and rental cash flow.  Review the lease regularly for the necessary critical dates and methods of response that apply to the occupancy process.

Given all of these things, the landlord needs to be fully briefed on any lease issues and recent tenant meetings.  Those facts can be merged into the end of month reporting for the property leasing and tenant management updates.

(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)

Posted on

The Many Different Ways to Build Your Commercial Real Estate Network Faster

man holding globe of earth

There are significant differences between commercial property and residential property. One of the biggest differences will be the types of people that you will be or are working with. You will find that the people transacting commercial real estate today are largely from the business sectors or the investment community locally.  They have different motivators and decision facilities.

(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 is the message?

The emphasis here is local. Get to know your local property market and the people that occupy or transact property within it. There will be plenty of people in your town or city to connect with over time ‘commercially’ if you have a good look into the businesses and the investors locally.  You can build long-term relationships in the right way, hence providing the right services.

What are your services and how do you sell into them?

You may provide investment sales services, leasing services, or property management solutions. That being said there are some very special services that you can implement within each of the three disciplines mentioned.  Here are some ideas to help across property management and also leasing.

Example of property management services

Take for example commercial property management as a business process and professional service. Here are some very specialized sub-activities within the asset and property management business:

  • income analysis and optimization
  • expenditure controls and budgeting
  • maintenance planning and routines for asset performance
  • tenancy mix planning and optimization
  • lease controls and administration
  • arrears minimization
  • vacancy marketing and property leasing
  • tenant selection and placement
  • the performance of an investment property within a larger portfolio
  • make good controls and lease compliance at lease end

So there are a number of things that you can do here when it comes to professional property management services. Given the types of buildings that you work with, there are some unique and valuable skills that can be applied across the disciplines mentioned.

Look at how you can provide some very special sub-set skills to the top clients and the active clients in your location. Always choose your best clients and properties with a bias towards quality and size. In that way any listing activity or property challenge will have a reasonable chance of fast resolve and marketing momentum.

What about leasing services?

So let’s look at leasing services as well.   If you are recognized as a leasing expert for a location, then you should have a number of specific solutions to locate and provide tenants to any vacancy problems that local landlords will be experiencing.

The place to start here is with your database. The size of your database in commercial real estate leasing will be indirect co-relation to the opportunities that you can create from the property leasing market. You simply have to know a lot of tenants within business segments and property precincts. That will then give you the ‘edge’ when it comes to working with landlords and vacancy challenges.

As a specialist in local property leasing, you should be able to provide a variety of services similar to the following:

  • an opinion of market rental relative to the location
  • tenant advocacy services for larger businesses
  • a selection of ideas to market any vacant property at any time
  • a clearer understanding of how property incentives should be shaped for the particular vacancy
  • marketing solutions to connect the vacant property to the right target audience
  • a solid awareness of leasing documentation that applies to commercial real estate leasing today
  • some real strategies behind rental establishment an escalation over time
  • ways to improve the property investment and the net income from a base of leasing activity

So there are some good things that you can do here as a specialist in commercial real estate leasing. Understand what is happening in your local market today when it comes to vacancies, tenant activity, and landlord pressures.  Take action with the market evidence you are seeing.

Match your professional skills into the momentum of the market and the trends of the time. You can choose to work with landlords, tenants, or business owners. Note that you can also work for property developers at the right time if the prevailing market conditions are right.

The take home message?

So the message here is that you should make the right choices when it comes to your property market and the specialist services that you provide. Look deeply into the needs of your clients as they address their property challenges. Look at the ways that you can provide specialist high-end real estate services to the right people in the right way.

Get to know your clients at each and every opportunity. Be prepared to take a property solution or option to your clients before they even know that they have a potential need or issue on the horizon. Be pro-active as a property specialist; that’s what top agents do.

Posted on

The Core Principles of Lead Generation in Commercial Real Estate Brokerage

business man talking on cell phone.
You can create plenty of leads in commercial real estate brokerage.

In commercial real estate leasing, there are plenty of lead generation opportunities to be had when it comes to tenant placement and leasing activity.  In any town or city at any time, there are usually plenty of tenants looking to move for a number of different reasons.

Your job is to locate those tenants at the earliest possible time before they consider moving and changing premises.  The relationships that you strike with tenants locally will help you grow leasing activity and opportunity.

There are two sides to the levels of new business that you create as a property leasing specialist.  Firstly you should be working with landlords helping them with vacancy problems and tenant mix strategies.  That in itself is quite specialised process.  Secondly you should be working with local businesses and tenants to help them relocate at the right time as part of their business activities and growth strategies.

What’s it all about?

So the message here is that you should be focusing on lead generation with both landlords and tenants.  Separate strategies are required.  You should be connecting with these two groups in a regular and ongoing way.  That is why your database and your prospecting activities are fundamentally important to lead generation in commercial property leasing.  Tenants and landlords should be segmented within your database, and relationships should be growing with each qualified lead or prospect.

Specialist leasing services for a location and property type are always in demand.  Consider your answers to these questions:

  • What is your specialist service?
  • What values and opportunities do you bring to the landlords and tenants that you serve?
  • How can you improve your professional service offering to both landlords and tenants?
  • Why are you the leasing expert for the area and the location?
  • How can you market vacant premises more directly and effectively?

An important factor to remember?

It is an interesting fact that your database and the people within it are perhaps the most important factors of leverage that you can apply to the lease negotiation process.  If you are growing your database daily and regularly, the landlords and the tenants within your list will allow you to quote any property, vacant premises, or a new leasing opportunity quickly and directly.

If you are struggling in the property market now with leasing activity, take a serious look at your database and start to improve it and grow it through regular contact with new people.

When you know lots of people, you can create leasing churn and activity.  Here are some ideas to help you improve your listing conversions and leasing results:

  1. CONTACT SYSTEMS: Keep in contact with all local businesses. You will find that businesses are moving and changing premises for many different reasons.  Make sure that they remember you at the right time when it comes to changing location.
  2. QUALITY CONTACTS: Network the tenants in high quality buildings. The tenants in high quality buildings are generally those businesses that can afford better quality occupancy and longer term leases.  The commission you achieve from such a high quality property leasing transaction will generally be higher per unit of space under lease.  Many corporate tenants today require the services of a tenant advocate to help them find new premises and other properties.  You can offer comprehensive and specialised tenant advocacy services.
  3. LOOK FOR CHANGE: Look for tenants moving premises or those that are under some form of business pressure. When you canvass through an area or a location, look for the signs of change. You will see some businesses that are under pressure to relocate.  Levels of stock, lack of parking space, lack of storage, and growth of business activities are all signs of a tenant or a local business needing help.
  4. SERVICE OFFERING: Establish some comprehensive tenant placement services. As mentioned before, tenant advocacy can be part of the services that you offer.  In other words you will be locating a tenant into a new property.  In that case the tenant will be paying your commission and they will be your client for the purposes of the transaction.  The larger corporate tenants are generally quite comfortable in seeking out and using the services of a specialised tenant advocate.  They are also prepared to pay the necessary fees for service.
  5. FRANCHISE BUSINESSES: Establish contact with local franchise businesses. Many franchise business models focus on factors of location first and foremost.  They generally need to locate a new franchise business into a zone or precinct after they have undertaken the necessary market research and study.  Make direct contact with local franchise businesses to understand the preferred business locations and lease circumstances that they prefer.  They may also share with you the terms and conditions of the typical franchise agreement at they use.  The franchise agreement will need to be integrated into the lease terms and conditions that you may negotiate.

So there are some things that you can do here when it comes to lead generation in commercial real estate leasing.  Understand the differences between landlord activity and tenant activity.  You can offer specialised services in each case.

You can get plenty more lead generation tips and ideas in our eCourse right here.

Posted on

Grow Your Commercial Real Estate Business Faster – Understand Exactly What Clients and Prospects are Looking for in Investment Property

two business men talking in street
Know your roles and responsiblities as an agent.

 

Property Investors get involved with commercial property for a number of reasons.  Their motivations can be quite personal and specific to factors such as capital gain, redevelopment, highest and best use, building renovation, market rental, and portfolio mix.

In asking the right questions you can identify exactly what your clients and your Property Investors are looking for.  From that point onwards it is simply a matter of understanding capabilities of finance and the correct time for a transaction; those observations will apply individually with your clients and prospects.

Here are some ideas to help you understand exactly what your clients are looking for relative to commercial and retail real estate investment:

  1. Determine the property type that suits the balance of the portfolio. It is a well-known fact that portfolio diversity will lessen the risk and volatility of an investment portfolio.  In a lessening the risk, the returns can also be reduced.  That is where many Property Investors will divide their portfolio across retail, industrial, and office buildings.
  2. Understand the factors of timing with any property acquisition or change. Locally you will find the pressures of property supply and demand impacting prices, rents, and time on market.  There will be times of the year which are more favourable for the sales verses leasing activity.
  3. Some properties have a definite lead up to a promotion or marketing campaign. Some things may need to be fixed and addressed.  As an example, you may have to rectify weaknesses in the tenancy mix, vacancy factors, tenant selection, building cash flow, and rental structures.  Look for those weaknesses before you implement a marketing campaign for the client.
  4. Some of your clients will have a preference for portfolio improvement through diversity and change. They will be on the lookout for properties in particular locations, assets of particular value, and buildings that may offer a new and vibrant opportunity through redevelopment or a fresh alignment to the market rental locally.  When you understand the needs of the particular client, it is quite possible to put together a transaction off market without the pressured factors and interference occurring with other agents, buyers, or tenants.
  5. Within your database, determine a small segment of clients and prospects that you would regard as VIPs. Over time get to know exactly what these people are looking for from an investment perspective and identify when they could potentially need that repositioning or change.  From that point onwards you can be researching the market and looking for the correct property acquisitions and opportunities.

When you focus a lot more on your individual VIP clients and their property needs you can get to the real triggers and points of change that create commissions.  That then is a proactive approach to being a top commercial real estate agent.

Posted on

Leverage Factors in Commercial Real Estate Brokerage

hi rise office building.
Look for leverage in every property listed

 

As an agent or a broker in commercial real estate today, the current events in the market will be sources of substantial leverage and opportunity when it comes to a future sale or a lease situation.  You can also find plenty of property management opportunities within a sales or leasing transaction.

The message here is quite clear for the astute agent or broker.  Look for the opportunities within the market based on industry trends and business churn.

The property market moves in cycles and in the case of commercial property it is the local business or economic cycle that impacts the decisions of property investors, business owners, and tenants.  What you can do here is built leverage and action from certain activities in your market.  Here are some ideas to help:

  1. Inquiries – Any property inquiry coming in to your office from the marketing of listings will allow you to create a conversation, qualify the party, and potentially find out about their new property needs and changes.  Understand the motivation of the person making the inquiry, and the timing of their decisions.  It is likely that they will be talking to other agents locally, so be prepared for quoting other properties where appropriate that may suit their inquiry.
  2. Quality listings – When you focus on quality listings you will generally have many more direct inquiries coming in to you from each marketing process.  Understand what the factors of attraction are when it comes to tenants and buyers today.  Fully qualify the people that you talk to and then itemize or short list property requirements.  You will soon know how to package a listing and find the right properties for today’s market.
  3. Inspections – Every property inspection allows you to connect completely and thoroughly with a potential tenant or property buyer.  If the subject property inspected doesn’t suit the inquiring party, add some other property inspections to the list.  Most buyers and tenants will purchase or lease property from within the local area.  That is because they understand the location, the values, the rentals, and the opportunity.  Track your inspection activities within your database.  Keep in contact with inspecting parties for the long term.
  4. Methods of sale or lease – There are differences in the market when it comes to the successful methods of sale or the methods of lease.  Understand the factors that work in your local area with buyers or tenants as the case may be.  A timed method of sale such as an auction can put some urgency in the property decision process.  A quality listing taken to the market through the auction process will usually create a lot of interest.  From one auction marketing campaign you can create a substantial database of qualified buyers.
  5. Offers – An offer to purchase or lease may or may not be successful in today’s property market; a lot depends on the client you are working for and their impressions of the prevailing market conditions.  Understand the offer limitations and the negotiation objectives of the people that you are working with; negotiation skills will help you in this process.  You can quote other properties to those people that may have been unsuccessful in any property offer.
  6. Referrals – From any successful listing, be it in sales or leasing, you will find further new business in asking for a referral.  Be prepared to ask the right referral questions at the right time; understand that most business people and investment property owners have relationships with others that can lead to more opportunity.

So the message here is quite clear and most particularly that simple issues and events in commercial property today can give you some leverage and lead to other opportunities in new business over time.  Be prepared to work with the right people and see the opportunities.

Posted on

Marketing Advantage in Commercial Real Estate Brokerage – Use a Blog to Build Your Online Profile

woman with laptop
Build your blog in commercial real estate brokerage.

As a commercial real estate agent or broker, you can use a blog as a professional and personal marketing strategy.  There are plenty of things that you can write about when it comes to your local area, your town or your city.

The blog is something that you can do individually at very low cost.  It is also something that you can do in your spare time or perhaps in the evenings when the pressures of the working day are diminished.

As a special note and as part of the blog marketing process in real estate or commercial property, you should not write about particular property listings and clients.  Leave that marketing strategy to the brokerage websites and the portals where you can and already do promote existing listings and particular properties.

The blog process is all about providing commentary and information or knowledge.  That is why the search engines rank the process so highly when people offer valuable information and insights.  As a real estate agent you can do exactly that and hence the blog strategy can help you greatly when it comes to building an online personal profile.

So what would you write about in the blog and why should you do it?  Consider the territory in which you work and the specialisation or the property knowledge that you can bring to the market; if you are truly the specialised property agent or broker that you claim to be, there will be plenty of things to write about and information to share.  Here are some ideas within those factors to help you get this strategy underway:

  1. Look for the changes in the property market in prices, rents, and future supply.  The changes in the property market and the analysis of history will give you plenty of things to write about.  You can create simple graphs relating to growth in prices or rentals, shifts in yields, or enquiry rates relating to property types.
  2. If you are a specialist in a particular property type you can talk about the future growth and opportunities that apply within the zones or precincts in your town or city.  Property investors will always show an interest in a well-crafted article giving valuable information about recent property trends and predictable changes.  As a case in point and as an example, the retail property segment and particularly that of shopping centre performance stands alone as a specialist part of the property market.  Within that topic there will be plenty of things to talk about when it comes to tenancy mix, rental strategies, vacancy rates, leasing opportunities, customer requirements, franchise tenants, and shopping trends.  I go back to the point that valuable information provided by industry specialists will always be of interest to the players in the property market.
  3. Any upcoming property developments will shift the balance of supply and demand when it comes to particular property types and property occupation.  From that new supply of high quality modern space, you will find that the older properties will become redundant and be potentially ripe for redevelopment.  Consider the changes that apply within a property type with any new developments coming up and write about them in your blog.  Talk about the changes and the investment opportunities or adjustments; look for the strengths that evolve from newer property developments shifting the balance of occupancy and property ownership.

There are plenty of things for you to write about when it comes to the blog and Internet Marketing process.  In this way you can build your online presence as an agent or a broker, and show your expert comprehensive property knowledge and experience to the right people in your town or city.  A good article written around the facts of the market can also be linked to your property newsletter and your client emails.  When something is worth talking about in our industry, it is worth sharing.

Posted on

Commercial Real Estate Brokers – A Fresh Approach to Attracting New Clients

woman talking on headset telephone
Start talking to new prospects and clients in commercial real estate.

In commercial real estate brokerage you need plenty of clients to support your listing and commission activity.  You also need new prospects and opportunities to fill the gaps when some of your clients move on or leave the industry.

Given that we are soon to be starting another calendar year, it is time to have a look at a new and fresh approach to prospecting and client networking.  This should be a personal priority for all real estate agents and brokers.  This is the best time of year to get your client activities and database directions set for the next 12 months.

Here are some facts that relate to the market today and the clients we work with:

  1. The ‘market noise’ from competing agents will always be significant.  Many of our top clients will be working with other real estate agencies or at least know of some other top agents locally.  This is a continual threat to our market share that can only be addressed by relevant and constant contact with the clients that we know.  That is why property specialization is such a critical process in building listing opportunity.  When the time comes for the client to move on a property matter they will usually choose the best agent with a dominant market share within the location and the property type.  That is why general real estate agents and brokers never really develop dominant levels of business.
  2. Winning a listing today is not entirely about providing discounts or inflating the property price to attract the clients business.  Winning a listing is all about packaging the property to attract the maximum interest and facilitate inspections.  High prices and higher rentals will not do that.  Understand the prevailing market conditions and how you can work with that to solve the property challenge for your clients and prospects.  Show the client the true facts of the market as they apply to the property type and location.  Tell some stories relating to both successes and failures within the property category.
  3. If you have a property that has been on the market for a long time, it is time to seriously adjust and reduce the price and or the rental structure in line with market conditions.  Clients are not fools when it comes to true market conditions; they want results.  They will usually understand that an inflated price or rental will make the marketing process quite difficult, so your pitch or presentation needs to tell the right story and provide the right market evidence.  Any property with an inflated price or rental will soon become stale on the market; stale listings are usually quoted by top agents as marketing weaknesses.  It is easy to show clients how other overpriced listings have been poorly marketed and overlooked by buyers and tenants.  If the client is still unrealistic on price or rental expectations, it may be time to walk away from the listing and let some other agency or brokerage waste their time.
  4. Every quality listing should be exclusively marketed.  As part of that process, you should be asking for and attracting vendor paid marketing funds.  Structure your sales pitch and presentations accordingly.  Marketing dollars spent will have a lot to do with your real estate profile locally.

Working within these very simple and yet important facts, it is time to look at the ways you can attract new clients and listing opportunities.  As I said earlier, the change in the calendar year is upon us and certainly will give us the opportunity for a new business direction and a freshening of our client connection process.

Here are some tips to help you with reaching out to new clients and prospects:

  • Visit the people within your current database with the deliberate intention of asking for referral business and opportunities.
  • Identify the bankers and financiers within your town or city that have an interest in commercial industrial or retail property.  Get to know those people at a personal level.
  • Contact all local accountants and lawyers locally that appear to be reasonably successful with their business activities.  They are likely to have many clients active or interested in commercial property.
  • Identify the entire listings list active with your competitors.  Use those listings as leverage to talk to other property owners nearby.  Some of those property owners may like to compete with the current listing in the same location.
  • Identify the people that have purchased investment property within the last 3 to 5 years.  They are likely to be active again within the next two or three years.  They may wish to buy, sell, lease, or develop.
  • Check out the property development activity at the local council.  Also check out the changes to zoning and property usage.  All of these things could be solid foundations for project marketing, future sales and leasing activity.

In our industry there are many leads and opportunities available at any point in time.  It is simply a matter of digging deep enough into the marketplace, the people, and the listings.  Opportunities in commercial real estate are always available and it is simply a matter of asking the right questions to the right people.

Join our Newsletter right here and get more tips.

Posted on

Franchise Tenants are Leasing Opportunities

When it comes to leasing commercial and retail property today, franchise tenants are a special opportunity for property agents.  These franchise tenants already have a proven business model, established business brand, and good track record.  On a regular basis those franchise tenants are going to be looking for new premises as part of the expansion of their network of operations.

Landlords and Commercial property agents should work closely with these tenant types.  To get that process underway, visit surrounding suburbs and towns.  Look at the established franchise brands in all property types.  See if those brands are already located in your territory or if they would consider a move or an expansion in that way.

So we need to set some rules here:

  • Franchise tenants know what they want by way of premises given that they understand their customer profiles and ideal premises configuration and location.
  • The leases used in these circumstances are likely to be a variation of the standard lease used by the franchise tenant.
  • The lease term will need to match the duration of the franchise agreement.
  • The branding and signage of the tenancy will require consistency that suits the property but also attracts customers.  Brand consistency is really important when it comes to premises choices and occupancy with franchise tenants

Commercial and retail real estate agents can do very well in working with this segment of the market.  Get to know the franchise groups and what they are looking for in property type and location.

Here are some questions to ask and issues to work with that can help you with this type of tenant:

  1. What type of property best suits their operations now and in the future?  Pay particular attention to expansion and contraction needs.  The tenancy may have specific challenges when it comes to ongoing occupancy within their franchise agreement.
  2. What locations are best suited to growth of trade and business?  In can be that main roads or highways have something to do with property choice.  Property and business exposure can help the franchise group within its branding.
  3. Where will their customer be coming from and why?  You will need some local population and business demographics to help you here.
  4. Check out the competitors for the franchise tenant.  Whilst the tenant you are working with will already have a good idea about their competitors, you also should seek to understand those market factors.
  5. The rental structure for the tenancy will be a balance between the requirements of the landlord and the cash flow structures of the franchise group.  The franchise fee will be an added cost in the viability considerations of the business in occupancy.  The landlord will still want a market rental for the premises based on prevailing market conditions.  Most franchise groups will take between 5% and 10% from the gross trading figures of the tenant.  It is wise to ask the tenant for their cash flow projections based on occupancy costs, expected levels of trade, and local business conditions.
Man holding globe
Work with more franchise tenants today in leasing

You can do very well as a commercial or retail property agent when it comes to working with these tenancy types.  It is simply a matter of understanding and specializing with franchise brands.  You can then identify the right properties that suit their business activities and projections.

Posted on

Commercial Property Agents – How to Find Tenants for Your Property Clients

business man reading newspaper
Reseach will help you find tenants for your properties today.

Selecting a tenant in a commercial or retail property can be a challenge.  Vacancies can occur within the property from time to time throughout the year.  Some of those vacancies will be expected, whilst others will be the result of a tenancy default.

When you manage or lease a commercial or retail property, it is wise to incorporate a lease management and tenancy mix strategy into the property business plan for the property each year.  The lease management plan will help you when it comes to finding and negotiating with new tenants to the property.

Given that each particular property is unique, and every landlord has special priorities relating to their property investment, the selection of a tenant to fill a vacancy is quite important.  Here are some tips that can be applied to selecting a new tenant for your commercial or retail property:

  1. In an ideal world, you want the tenant to be of good quality and high profile.  The tenant of this type will bring stability and benefits to the overall tenancy mix.  Other tenants in the property can benefit from a new high profile tenant entering the property precinct.  For this very reason, franchise tenants and the associated branding they take with them will be quite desirable in the tenant selection process.
  2. The landlord for the property should be encouraged to establish a standard lease that matches their property intentions and property investment.  This lease can then be easily used when you negotiate with a new tenant.  It should be noted that many solicitors acting on behalf of property clients do not understand the property, its location, or its functionality.  Encourage the client’s solicitor to visit the property first before any standard lease is put together.
  3. The age of the property and the intentions of the landlord will have impact on the refurbishment and renovation activities to occur.  The lease for the tenancy should be prepared with due regard to tenancy renovation, and property refurbishment.  It is not unusual to ask the tenant to renovate their tenancy every three or four years as part of occupancy.  A condition can be placed in the lease to this effect.
  4. Any tenant seeking to occupy vacant premises should be able to provide some history occupancy in another property.  It is desirable to talk to other landlords or property managers to ensure that your intending tenant is of high quality.  If on the other hand the tenant is a new business, then you will need to satisfy yourself when it comes to business stability and long term occupancy.  When that is the case, the form of guarantee or bond that you use in the leasing arrangements will be quite important.
  5. The prevailing market conditions will have impact on market rentals, rent reviews, and lease options.  It may also be the case that a lease incentive will need to be provided to attract a tenant to the vacancy.  Assessing market conditions will therefore be critical to the leasing negotiation and finalization.
  6. Every commercial or retail property will have standards that apply to hours of trade, and terms of occupancy.  They in turn will have impact on property access, security, customer access, and operational costs.  Any property that is closely geared to higher traffic flow such as that in a retail shopping centre, will have higher property operating costs to consider and structure into the lease rental.

When you create a good lease for a property and the landlord, it strengthens the overall investment for the long term and helps the property sell if and when that is to occur.  Taking shortcuts when it comes to lease documentation will reflect badly when it comes to property performance and tenancy mix stability.

If you want more free tips for Commercial Property Agents you can get them in our Newsletter on this site.

Posted on

Commercial Real Estate Agents – Direct Marketing Tips for Promoting Listings

Man giving thumbs up signal
Direct marketing really does work when you get it right.

When it comes to selling and leasing commercial property, the direct marketing approach has distinct advantages.  That being said, the direct marketing approach does have more requirements of time and effort on the part of the commercial agent.

Every property that is listed for sale or for lease should be exposed to a variety of marketing campaigns and initiatives using the following categories as a guideline:

  1. The local property business proprietors that may need to relocate will always be opportunity.  Keep in close contact with this business segment.
  2. Property investors requiring alternative properties with a different tenancy mix and cash flows will always seize opportunity where they can afford it.
  3. Identify the property investors that seek to diversify their portfolio in different locations and in different property types.  Even in difficult times, these investors had do exist and are waiting for the right circumstances or bargains come along.
  4. Contact all the local tenants that may seek to relocate through expansion, contraction, rental, or property acquisition.
  5. Businesses located in the immediate proximity of the actual listing may be requiring further premises close to their existing operations.
  6. Within your database you will have people who were previously qualified from other earlier campaigns and listings.  They should be contacted again.
  7. All of your current property listings should be cross promoted to the suitable qualified prospects that you take to inspections.

So these categories are all direct marketing tools.  They require specific effort and a systemized process on the part of the agent.  When the property market slows or becomes tougher, these issues above become more important than ever before.  They can be used in addition to any ordinary generic marketing that you usually implement.  That being said, you should only do these things based on the quality of the listing, the quality of the client, and an exclusive listing.

Posted on

Commercial Real Estate Agents – Gathering Market Intelligence

office buildings in city
Know all the buildings and the property owners.

The intelligence-gathering efforts that will help you build opportunity in the market should include analysing your commercial real estate marketplace.  The property sales and leasing market is always changing.  Seeing those changes early and adjusting your efforts or focus will always be the best strategy:You can then make choices on which you will focus:

  • What are my market segments? How do the segments differ?
  • Does local property needs differ in sales and leasing?
  • Are some property segments destined for obsolescence because of changes in the market?
  • Which segments within my niche are prosperous and under growth? Are any of them recession-proof? Recession-sensitive? Which are doing poorly? Why? You should always be in tune with financial and business publications, their data, information and value.
  • Which segments of my niche are most price-sensitive and competitive? In this case you should identify the other agents that you are up against and how they impact your activities and listings.
  • Which are most profitable property types for you to list and work on?
  • What trade journals or publications in my market niche are the best for marketing, the most comprehensive, and the most objective for commercial sales and leasing?
  • Subscribe to every relevant publication and read the papers daily.  It is remarkable how much local property information you will get from the local paper.
  • What can I learn from our own competitors and peers that can help me serve the needs of my niche? Your prospects may have uses for commercial real estate sales and leasing that you never previously thought of.
  • Are any of my real estate competitors exhibiting any behaviour in the property market that seems strange or unusual? If so, what are the true reasons behind it?
  • What must I do to become a recognized expert within my commercial real estate niche?  What should an expert cover and offer to the local property owners and investors
  • Do you understand the differences between sales, leasing, and property management?  Can you cross sell your services in each discipline?
  • Are there any certification mechanisms or awards for which I can qualify? Associations I need to join? Groups in which I might need to assume a leadership role?

Having this intelligence information on your commercial real estate market can be likened to knowing the rules of the game.  When you know the basics, you are ready to gather scouting reports on other teams in the “ big league”.

We need the truth when gathering market intelligence.  Whenever we have accurate intelligence on our competitors, we can leverage our own strengths and weaknesses against theirs and apply the most concentrated, effective pressure we can muster.

Need more ideas to help your career in Commercial Real Estate?  Sign up for our Newsletter here.