In commercial real estate today there are all types of properties to work on as well as zones of activity. The opportunities are out there. That being said I get a lot of questions from new agents as to how they can tap into their property market effectively and directly. Some simple strategies will help. I have put together these notes on how that should be done.
Commercial property management is a challenging part of the property business if you are going to do it properly. Complex properties require good managers that understand the property type and just how to keep things under control
It is hard to take up a position in looking after some properties without a qualified and experienced person to help you. Whilst the theory of property management can be studied, the practical experience will always help you greatly and fast track your learning curve. There are significant differences in the management style between industrial, office, and retail property.
Here are some of the things that are central to your job:
Watching the trends of the market with focus on market rentals, vacancies, competing properties, supply and demand for premises, and new developments.
Income and expenditure performance for properties in your area. Knowing the industry averages will help you a lot in keeping things under control. It should also be said that some properties will perform differently based on their property type and location. That is why specialisation is relevant in property management.
When it comes to properties of medium to larger size, the establishment of a budget relating to income and expenditure is quite normal. The budget can only be set with due regard to property history, location, and other properties of similar type. Getting to know the competing properties and other property managers will help you in establishment of the budget for your managed assets.
The current tenancy mix and the vacancy profile for the property will have direct impact on the income stream. That is why the market rentals, current lease profiles, and expected vacancies need to be carefully managed. Many managers will do their own leasing as part of the property management services. That should normally be the case however there should also be a separate fee for completed and successful negotiated leases. There will also be differences in leasing fees as it applies to leases of different types and different terms.
Many property owners will have specific needs when it comes to cash flow. They will need to service financial obligations to the mortgagee, as well as payment of expected outgoings to run the property. That is why your experience and control become part of the property management service. The manager should understand exactly what’s happening in the property today and how the expenses are going to change cash flow over the forthcoming period.
A good manager will bring stability to an Investment Property. Stability then allows the property to be improved over time to the plans and the priorities of the landlord. It should also be said that a reasonable fee should be charged for commercial or retail property management services. There are no short cuts when it comes to quality in this industry, hence a suitable fee should be paid for professional commercial and retail property management services.
The commercial real estate market of today has some challenges to deal with. In most cases it is a slow market or there is an abundance of unsold properties, and or vacant premises for lease.
The property market doesn’t disappear; it just changes. That change factor is what we as commercial real estate agents can help with. We become the ‘agents of change’ and can provide the right solutions for property investors, business owners, and tenants. People need our help in many different ways.
If you are finding that things are a bit tough at the moment for you as a Real Estate Agent, have a look at the way in which you are doing things. Today you need a ‘toolbox’ of solutions to help the clients and prospects in today’s property market.
Creativity and relevance are the two facts to aim for here. Are you creative in marketing your properties for sale or lease? Are you relevant as a top agent in this type of property market? Generic agents struggle in this type of market because they do not have the ideas and strategies active to solve property problems for clients.
So let’s give you some ideas to put into your agent toolbox for commercial real estate sales and leasing.
Have all the market facts and information at your fingertips for the particular property type and deal that needs to be done. You cannot change the client’s perception without the right information.
Check out all the competing properties locally before you meet with your client. Be very familiar with prices and rents that are being asked. Time on market assessments will also be of value in helping the client see what is going on today.
Have stories of success with other local properties and listings that you can share. Most clients will listen to the experiences of other properties and clients.
Have alternatives for the client to choose from. When alternatives are available, the decision to be made is less difficult. Most clients will choose the ‘middle ground’ alternative.
When you list any property, set the rents and prices for today’s market. The client’s perspective on price or rent should be challenged if it is too unrealistic. You do not want to waste your time or theirs in the listing process.
Provide the solutions that the market needs including personal marketing systems that will allow you to take the listing to the right people in your database and the right local property owners.
Help the parties make decisions. In many respects our clients and prospects are just looking for the right agent that can solve their issues quickly and effectively.
Most commercial real estate agents hate cold calling and will avoid it at all cost. That simple decision costs them dearly in market share, leads, and opportunities. If you are in the industry by choice, you will need to do some ‘hard stuff’. Telephone prospecting is one of the most important to do. Here are some tips for agents from our Newsletter.
Master Cold Calling
To work in commercial real estate agency you have to master the cold calling process. Each day you should spend 2 hours on the telephone talking to new people that you have not spoken to before. It is a time factor that requires discipline and focus. If you can master the art of call prospecting, then you will rise to the top of your market a lot faster than most.
The big factor in moving ahead in the industry is for you to practice and refine your call contact processes. Who should you call? Here is a list:
Owner occupiers of commercial and industrial property
Property professionals (solicitors, accountants)
When you look at a list like this you will soon know that some of these people are hard to find and contact. For that reason you should call the people that are easy to find first and then research the rest on an ongoing basis.
Keep it Simple
Business owners are simply taken from the telephone book or by researching the businesses located in the streets in your territory. You can call 40 of those per day quite easily. As to how many you get through to, the number will be less than half; that being said, you simply make the calls and keep doing so.
In contacting property owners you will find that the process is slower and more tedious. That is because the property owners can be hidden inside company structures or property trusts. Allocate yourself a target of researching 1 new property owner per day. At the end of the week you will have spoken to 5 new people that have a solid interest in quality property. Over time that connection will pay dividends when it comes to leads.
Making all these telephone calls is one thing, but you should be aware of the ‘Do not call register’ and legislation or laws that could apply in your area. Do not break the law when it comes to making calls. In most cases, the business people and owners that you call are not impacted in the same way that private people in residential situations may be. Understand the calling laws and stay within them.
The perfect cold call is a systemised process that occurs every day to a plan. You can develop your dialogue, call contact systems, database, and follow-up systems to take you forward. Start practicing and you will get there faster.
You can get some more tips for Commercial Real Estate Agents in our Newsletter.
In commercial real estate today, the prospecting process is critical to your career. On that basis, the earlier you start prospecting as part of your daily activities, the more successful you can be over time. If you neglect your prospecting processes, you are doing yourself a lot of financial damage, and creating a loss of market share. Over time you can be looking for another job!
It should be said that the prospecting process is quite hard for some salespeople and requires considerable focus. It is hard in the sense that it is a process that not many salespeople are comfortable with or familiar with. Essentially it is a new skill and requires discipline to create a new habit. Prospecting does require a specific mindset that will allow the skills and momentum to improve into daily habits.
Finding the right people to talk to is all part of the prospecting process. When you start talking to them, regular ongoing contact is the rule and not the exception. This industry is based on personal ongoing contact and networking. It is a people based industry. It takes some time for the property owners and business proprietors to trust you sufficiently to help them with their property needs. Commercial real estate is not an experiment; it is a specialized business process requiring expertise and knowledge.
Here are some tips to help you with your prospecting processes:
The commercial real estate industry is built around local businesses and business people. It is the business people that occupy the premises and pay the rental. In starting your career, you can get a lot of information from local business proprietors. They will also be excellent sources of leads and opportunity. On a daily basis you should be talking to at least 10 to 15 business people as part of a new prospecting process.
Property investors are on the lookout for quality properties and or future investments. As you identify these people, your ongoing relationship with them should be nurtured for the opportunity and situation where you can help them. In many respects, some of these investors are in contact with many agents at any one time. For this very reason, your relationship needs to be stronger and more productive than those that the other agents may have with the same investor.
Property owners will always be a target from a new business perspective. The fact of the matter is that they are hard to find and hard to connect with. In many situations the true owner of the property is hidden within a company structure or Property Trust. Getting to the required person can be a frustrating process. That being said, it still needs to occur and it is part of the prospecting process for each and every commercial salesperson. Set yourself some simple benchmarks in regards to contacting these people and building relationships.
Check out all of the significant local properties and local businesses. They should all be entered into your prospects list and networked over time. It may take some time for you to connect with the right person and or get the necessary meeting. Persistence is the key to getting the results that you require.
Prospecting in commercial real estate does not need to be complex; it simply needs to be done. When you establish your own prospecting system and merge it into your time management processes, you will find that the property market will open up with the opportunity that you need.
When you manage a lot of commercial or retail properties you will know how frustrating and diverse the issue of security can be with many different property types. Each property will have factors of security that should be managed and optimised. Every tenant has to integrate into the security plans and systems for a managed property.
There is a lot of difference in security systems and procedures that are utilized in retail, industrial, and office properties. On that basis you really do need to know each managed property very well when it comes to security needs and responses.
A well-managed and operating property will be a reflection of the good property management systems that are implemented on the property. Security is part of that. Here are some security concerns and aspects that could be considered as you manage your portfolio.
Fencing around the property should be reviewed for effectiveness. That will include any breaches, lighting issues, modification, and stability.
Many properties will have car parks that require special security considerations. Customers and tenants using the property should be provided with a secure car parking environment both in office hours and out of office hours. The location of the property will have some bearing on this car park issue. Do not forget to look at how the car park is used at different times of day.
Loading docks in the property will be accessed at special times and with differing types of vehicles. How is this done and what security concerns evolve from this?
The entrances and exit points to the property should be looked at. As part of that process consider the door ways and the exit points that are involved in emergency evacuations. It is likely that you will need expert consultants to help you with planning workplace health and safety issues as they apply to property use and access in times of safety or emergency events.
Lighting in a property will always be of concern. Lighting should be checked frequently to ensure that it does the job it is required to do. If the building is used after hours by customers or tenants, the lighting will need special consideration.
Guards and security patrols may be required in a managed property. It really depends on the property location and the tenant mix.
The age, design, and location will always impact the way that a property is used by the tenants and the customers. It should be noted that a retail property will usually have greater levels of security coverage and response to keep the property safe and secure for occupants and customers.
Security is a valid need in property performance and function, and on that basis should be structured into the outgoings costs recovery for the property.
When you do a commercial property presentation today to win a listing, the competition agents are likely to be ‘breathing down your neck’ and connecting with the client with all types of bonuses and ideas. On that basis your presentation just has to be the best and most relevant to the client.
Why are you the best agent to market this property? The client has to see the answer quite clearly and efficiently. Your presentation will do that.
Here are some common problems that we see in today’s market.
The competition agents will be chasing your client or prospect constantly for a listing. They will be filling the clients head with misinformation and ideas to destabilise your listing or opportunities.
The price or rent that you offer the client is likely to be different than that which they require. Show them some relevant market evidence to help them understand the circumstances of the market today.
The listing type that you need may not be what the client wants to give you. Always go for an ‘exclusive’ listing. Open listings are a great waste of your time and effort; if they sell or lease, it is more from luck than anything else.
Your fees in both commission and marketing can be a hurdle. Set fees that are based on a quality service and the time that you are going to apply to the listing. Tell the client how you will take their property to the market.
The method of sale or lease can be of concern to the client. They may not want to take too much risk in the sale or lease process. That being said, if you know the right way to sell or lease the property then have strong evidence to support your arguments.
Here are some presentation tips to use as you present your ideas to the client about their property and their needs today.
Do not use a fixed or written script that is likely to limit the presentation. Be open and natural as you talk to your prospects to show your confidence and knowledge that can help them. The confidence that they see from you will come from the body language and the words that you use.
Use all the clients’ senses to convey the message. Bring together two or more senses in your presentation so the client is involved and connected to your story. You can do that by giving them something to hold (a proposal) whilst you show them some images or photos of the property, and as you explain your ideas and strategies. Fully connect at all levels.
Have solid recommendations that are innovative and relevant to the best outcomes for the client.
Show them the competition properties that they are up against and how you can adjust around those issues.
Know the market and the relevant property solutions that are applicable to your market. It is notable that many agents and realtors are too general in the presentation. You must build your presentation on relevance and speciality that is connected to the property. The client has to see that you are the best choice of agent to help them.
When it comes to you the agent connecting with the client or prospect and pitching your commercial real estate services, practice and relevance will help you convert more listings in the right way and at the right time. In a tough commercial property market, you really do need top presentation skills to match your sales pitch.
Most quality property listings today are achieved through a competitive sales pitch or presentation process. Many other agents will be doing their variation of presentation to the same client before any agency appointment is decided and signed. Some of those other agents will also be offering discounts and incentives to influence the clients thinking.
In many cases, the client will have already decided on a particular agent before the presentations are made from all agencies. They will use the presentation process to satisfy their choices and make a final decision. It is the early relationships with the client that influence the decision they make in any competitive presentation. Top agents build relationships on a continual basis for this very reason. You need to do the same.
Here are some tips to help your presentation strategy in today’s property market.
Ensure that you have complete and comprehensive local market knowledge relative to the property type. You will need to know about prices, rentals, supply and demand, time on market, and current levels of enquiry.
Take the time to review the individual property and inspect it comprehensively before the presentation. That will also include a review of the other properties adjacent to and nearby the subject property. Look for any issues or relationships that will have impact on the subject listing.
Review all the other properties currently on the market in the local area. Look for challenges relating to quality, price, method of marketing, and availability. Your property listing may need to be adjusted around these other competing properties.
I’m not a big believer in the use of laptop computers as part of a commercial property presentation process, given that they are usually poorly handled by the relative salespeople. If anything they can be a big distraction to the client and confuse the message or sales pitch about the property. That being said, there is one strategy that really works with the use of a laptop computer. It is quite simple but very effective.
Take a significant number of photographs in and around the property together with other competing properties in the immediate adjacent area. You need probably 30 or 50 photographs for this process. Set the photographs up on the laptop so that you can run them from one folder as a continual automatic slide show.
When you get to meet with the client for the presentation, you simply let the slide show run automatically in the background as you talk to the client. The photographs help you in two distinct ways; they keep the attention of the client given that the photographs relate mainly to their property, and they also allow you to move in and out of points of discussion relative to any property matters in the photograph. Do not focus too much on the laptop and allow the client to glance at the photographs as you talk.
In commercial real estate you will be doing proposals for your clients and prospects on a regular basis. You would think that being asked to do a proposal is a good thing; in some ways it is, although many a prospect will ask you for a proposal simply to get rid of you. The hard truth of the matter is that many a prospect is going to use your proposal as a reason to choose another agent to sell or lease their property. Here are some tips from our Bulletin this week.
If a prospective client asks you for a proposal, and you are meeting with them when they ask the question, respond by saying something like this:
‘Why would you want that? Have I not been clear and helpful in the discussion here with you today? What is it that you need more information on?’
Top agents know that the best time to sign up the client is ‘now’; not at some later time when ‘they have had time to think about it’.
So the request for a proposal is actually a strategic way of not making a decision on the spot. What are the chances of agreeing to your proposal later when you give it to them? Probably it is no better than 20% in most cases.
If you do decide to create a proposal for the client, do so understanding that the client is genuine in the request and that you will not be wasting your time. A good proposal to sell or lease commercial real estate will include some or all of the following:
A clear statement of the clients requirements to sell or lease the property
A description of the property or the tenancy so that there is no misunderstanding in what is intended and what property it applies to.
A summary of other properties in the local area that are regarded as competing with the listed property. You will need to include a statement that describes the prices and rentals of those other properties.
A description of the local property market as it exists today, taking into account the factors of supply and demand.
The factors that will make the property relevant to the target market in the local area.
A marketing brief as to how the property should be taken to the target market. You will also need to supply samples of advertising and content that will apply to the property as you know it.
Expectations of price or rental given the prevailing market conditions.
A resume of issues that should be attended to before the property is taken to the market
A visual strategy to the process of moving forward. That can be a Pert or Gantt model that summarises the sale or lease process in stages
The list can be expanded subject to the prevailing market conditions and the property type. If you are going to do a proposal for the prospective client, then make sure it is a good one. First impressions are everything. Get some more tips in our Bulletin.
Not many agents and salespeople in commercial real estate have ever done a ‘secret shopper’ check on their competition. That being said, it is a very powerful tool and will give you lots of ideas to work with.
So exactly what is a ‘secret shopper’ in commercial real estate? It is the process of having someone call your competition agents and ask them for some details on a particular listing that they have. What it will tell you is this:
How timely they are in answering the telephone with property enquiries.
How they return calls to people that make enquiry.
Whether they ask the right questions of the person making the call.
How intelligent or otherwise they are in the call contact process.
What questions they do ask in finding out about the needs of the caller.
How they give out property information in follow-up to a call enquiry
Now this is not ‘rocket science’ and is a gathering of basic sales market intelligence. It is just so easy to do. You just need a friend that is suitably primed with the right information and questions to make a telephone enquiry on your competitors.
This process will give you an idea of just how effective your top competitors are. It will likely give you a good idea of their weaknesses as well.
To get the process started you will need to choose a few properties in the local area that are advertised publically. When the advert hits the paper or the internet, get your friend to make the enquiry of the other agent via telephone.
Here are some of the parameters to use in the process.
Give your friend making the call a list of the questions that are relevant to the property.
Give your friend a profile and an email for the information to be emailed to them.
Date and time of call
Length of call
Was the call answered the first time or did they have to leave a message?
If they left a message, how many days or hours did it take for the agent to get back to your friend?
Did they ask the following
Timing of need
Arrange for an inspection
Did they qualify your friend or was it a case of information overload and no connection?
You can add a lot more to this list. Importantly you will find out just who are the good agents and who are the poor ones. This process should be repeated every 6 months with the same top agents in your area; you will then know what you are up against and how you can improve.
When you work as a salesperson in commercial real estate, you really do need to build your personal profile in the local area. That profile needs to extend to property investors, business owners, property developers, and professionals associated with those groups. Here are some tips from our Newsletter.
To build your profile takes continual effort in a number of different ways. The most obvious ways to build your market share and profile would be through the following:
Direct connection with the key people that own significant property in the area
Meeting with the business owners that occupy significant properties and run significant businesses in the local area
Cold call prospecting and marketing on a daily basis throughout your precinct
Door knocking all of the local business proprietors.
Many salespeople overlook the value of the internet to their profile and business activity. Sure they may have some listings on the internet but rarely will a salesperson do anything more than that to lift their profile on the web. So there are some things that you can do here. Have a look at these:
You can write articles about property trends and types in your local area. What it does is it helps consolidate your name as a local expert. One of the best article sites to do this is www.ezinearticles.com
Create a personal business blog on either ‘Wordpress’ or ‘Blogger’. The blog process is free and will be yours to run and own. Everything you say is of your creation so be professional at all times. This blog process allows you to write about the area in which you operate and the property market. You could also talk about different ways of buying or renting commercial property today.
Use email newsletters with auto responders to connect with your clients. The cost of this is very low and initially you could get a free account with a newsletter service such as ‘Mailchimp’. They have templates and lots of instruction to help you get underway. You could set up an auto responder to connect with your clients monthly or more frequently. You can personalize the whole thing.
Social media tools today are numerous. Many of them are at no cost, but they do require you to take a strategic approach if the target of contact is commercial real estate. Initially the best to use would be Facebook, Linkedin, Twitter, and Googleplus.
So the opportunity here is for you to move to the top of your market with a great internet profile that is a combination of the listings that you have currently, but also these other very effective strategies.
Given that most of your competition will likely only do the Social Media part of the equation at best, there are many other things that you can do yourself to step up higher in the internet as a commercial property agent of relevance.
In this tougher commercial property market there are all sorts of pressures and hurdles to handle in agency on a daily basis as you look for the right prospects and deals. Importantly each and every day your system should take you forward a bit further towards the targets that you are chasing.
In saying that there are some really important observations that will help you understand the bigger issues and then help you get somewhere.
Many agents and salespeople have very little system. They do not do the right things every day and on that basis they struggle. They take each day as it comes. Very few salespeople have a personal business plan that they stick to and modify as they go through the year. That is a massive opportunity. You can quickly get past the competitors that have no base plan or focus.
Most towns and cities have elements of activity to tap into. You just need to know what to look for. If you can move from sales to leasing, you will always find property listings and business to tap into. On that basis become very versatile with the property services that you offer.
These two simple facts will set the scene for new business. Stop working for others and start working for yourself; when you really accept and understand that the process of new business comes from you personally, the doors to new listings and deals open very quickly. Property business is always out there; it is just a matter of what you can do about it. Stay away from any negative and poor performing salespeople in your team; you do not need to travel their road to destruction.
Self-belief is a wonderful thing; self-action is even more powerful. You need both to get somewhere in commercial real estate.
If you have not got a base plan for your working day, here is a simple one that works for some agents that I know. One of those agents earns 7 times more than anyone else in that office. Here is their plan:
Start the day on the telephone doing some prospecting. That means a time frame of about 2 hours that can take you through to 10:30 am in the morning.
Move all your meetings beyond 11:00 am every day.
Leave your paperwork to the time beyond 5:00 pm every day.
Get your of the office when and only when you have finished your prospecting.
Visit your territory and sales patch every day to meet new people and to door knock new businesses that you have not called on before.
These 5 simple things are not done by most salespeople every day. That shows just how easy it is to be better than the others that you compete against.