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.