The commercial real estate leasing process is quite special. You can work with tenants or landlords, but either way you will need some local area information and the tools to help you through any property inspection and negotiation.
In commercial real estate brokerage, you must know where your new business is derived from and where the best commissions are likely to come from into the future. Some new property business can be much more lucrative for you over time. Understand what that new business looks like and how you can find it. Focus into the segment that works for you.
Your opportunities will come from your local property market. The way to find that business is to specialize and improve your services accordingly. Top agents are very good at just one or two things, and then they drive themselves into that or those segment(s).
Where then are you likely to find the best business in both listings and commissions into the future? When you know your skills and knowledge, you can do something with growth and market share. You can also practice and improve your skills on the things that really matter. That’s how you generate more commissions and listings in a relevant and real way.
Your special market segments?
Consider the special market segments below and how you can select the right category of business activity. Ultimately strive to grow and shape your market share as a broker or agent over time. Plan your way forward:
Sellers agent – If you are a seller’s agent (or want to be) then you must know how to pitch and present your listing services competitively and directly to the people that matter. This is the ‘pointy end’ of our craft; pitching and presenting is something that will always vary based on the property and the client. Ultimately you will need a good database of clients to focus on so you are there to help them at the right time when they need a property solution.
Leasing agent – Three are always businesses looking to relocate locally. Spend some time looking into the business community and what they want from a property and improvement perspective.
Property management specialist – The management services to be offered today to the owners of any quality investment property can be quite unique and comprehensive. Your fee structures should be as comprehensive as your services offered.
Property performance improvement – Can you improve a property and its performance? Ultimately if your fee in property management is based on a percentage of passing income, then you can improve your fees through improved property rental cash flow. When the landlord wins, you also win.
Lease negotiations – Every lease negotiated deserves a reasonable fee. The value of a lease into the future is sustained as long as the lease is structured with due care.
And so the list goes on. Can you see the opportunity here? Specialization works in commercial real estate brokerage.
Look at your location, your client segments, the levels of professional services offered by your competition, and then understand exactly how you will pull in your commission and what your professional services provide your clients. You will never have a big problem in setting your professional fees if you and your services are regarded as the best available for the client and their property challenge.
Here are some other valuable service alternatives for you to open up into as a real estate agent for your location:
Tenancy mix strategies
Your ability to earn money as commission and to convert listings will be based largely on your skills and knowledge. Practice what you do and learn as much as you can. That is what our business is all about.
As a leasing agent you are frequently looking to lease vacant premises in an office building and CBD location. Many enquiries and calls today will or should come to you from the marketing campaigns you create; the rates of enquiry for every high quality leasing opportunity should be tracked.
The important issues in capturing enquiry are in qualifying the enquiry, in understanding what tenants are looking for and when they require it. Successful leasing agents will have a large database of well qualified tenants and business owners that they can approach when the right property comes to market.
That being said, I have heard many leasing agents complain over the years about the problems of chasing after the specific leasing requirements of tenants only to find that the tenant has found something or will not move on an ideal property or location. The fact of the matter is that you should only go so far in helping tenants because they are not fully committed to you; they can waste a lot of your time asking about certain properties, and at the same time be talking with many other agents. Set the limits on just how much time you should spend on any tenant lease enquiry.
The message here is if you control the quality buildings to lease, the enquiries will very likely come to you in abundance. Good buildings for lease will drive better rates of property enquiry. That then makes it a lot easier for you to fill your database with the right tenants and business owners.
The tenant qualification process is quite special and direct. Here are some of the main facts and questions to explore in finding out what the tenant needs, and to identify how genuine they are in looking for a new property to occupy:
Decision Maker – Understand who you are talking to and their role in looking for a new property to lease. With business type tenants it is common to see some person in middle management tasked with the process of finding properties to ‘short list’. Ideally you want to be talking to the key person in the property decision process.
Essential location – Some businesses must be located in particular precincts and zones of a city. There will be reasons for those choices and points of focus. I like to ask about ‘primary’ and ‘secondary’ locations so I can create a short list of properties in each case.
Rental budget – The rent for a property is not just a single amount of money; added to that figure will be the outgoings and sundry charges geared to occupancy. The type of lease will dictate how the rents and outgoings will be charged and paid.
Improvements – The office fitout will have desirable design factors to suit the way the tenant undertakes their business, interacts with staff, and serves customers. Car parking will also have a factor of priority in final property choice. How many car parks do they need?
Timing – Understand when they are looking to make the move. You can then integrate the issues of fitout construction, and the moving of the business.
Given all of these things I like to ask the tenant directly about what other properties they have already seen; it is likely that they have approached a few leasing agents already and on that basis I don’t want to waste my time in quoting things that will not suit or they have already seen. Protect your time and focus on key questions to get directly to the tenants leasing requirements.
In today’s commercial and retail property market, you really do need to develop a leasing strategy for each and every quality property that contains vacancies. The abundance of vacancies available means that the limited pool tenants available has a lot of properties to choose from. Attracting enquiry from tenants and then converting the enquiry is a real ‘art form’ in this market. Here are some more tips from our Newsletter for Agents.
It should be said that the marketing of any lease or vacancy should be on an exclusive basis. You should be appointed as the agent of choice to market the property for a period of time. Controlled listings are the only way to attract enquiry in this market today.
Given that the landlord requires leasing results in their property, the controlled listing is the only way to achieve the necessary commitment on the part of the agent and the necessary market penetration into the tenancy base.
It should be said that the client’s commitment to an exclusive agency should also be reflected in the agent’s commitment to market and service the listing. There is no point in taking on an exclusive listing of a vacant tenancy unless you truly believe that you can market it comprehensively and intensely for the period of the agency. The real estate world is full of disgruntled clients who have been tied to an exclusive agency and a poorly performing agent for a long period of time.
To provide an excellent leasing service for your clients today, here are some tips and ideas to merge into your leasing strategies and solutions.
When you act exclusively for a particular landlord, the property portfolio that they own should be subjected to a tenant retention plan and business strategy. In that planning process you can set the key criteria that should apply to ongoing leasing activity and tenant mix changes. When the landlord can clearly see the leasing road ahead when it comes to rentals and vacancies, they are more likely to stick with you as the leasing expert that they require.
The market rental in your local area will change from time to time given the supply and demand for rentable space. New property developments will place pressure on market rentals through the introduction of lease incentives and enticements. Keep your client up to date with some form of market rental update on a monthly or quarterly basis.
The expenditure or outgoings costs for a given property asset will be based on both controlled and uncontrolled cost factors. The uncontrolled cost factors are those that relate to property rates and taxes. Like it or not they will have significant impact on property usage and will need to be paid. It is the controllable outgoings that have some ability to be shaped relative to occupancy and building usage. As a leasing strategist and specialist, you can keep the client appraised regards current levels of expenditure and outgoings that apply to the particular property type. The trends of outgoings costs will to a large degree influence your rental decisions regards amount and rental type.
To be a top leasing agent today, you simply need to bring relevant leasing skills and local property knowledge to the client. Provide the best leasing service possible to your clients, and keep in touch with the local business community for the tenancy needs that arise.
If you have been working in commercial real estate agency for some time, you will know that there are many different things to do every day. That being the case, it is very easy to take the ‘easy road’ and avoid the hard and difficult tasks.
An average working day for a commercial salesperson looks a bit like this:
Prospecting for new business with business proprietors, and property investors
Inspecting other competitors listings in the market to understand how they are impacting your listings
Talking to property owners to update them on activities and marketing changes
Listing new properties and checking the relative details of price and marketing
Servicing existing listings to the qualified prospects and target market
Running marketing campaigns for existing listings to lift the levels of enquiry currently available
Reporting to property owners on progress made from recent inspections
Inspecting properties with qualified prospects to encourage offers and negotiations
Farming your territory in a methodical way to strengthening your market domination
Building a presence on the Internet for yourself personally as a specialist within a property type and a particular area
Taking offers and negotiating contracts and leases as the case may be
Getting involved with the sales team with regular meetings and market updates
Writing proposals for new business
A career in commercial real estate sales and leasing is perhaps one of the best and most rewarding selling environments you can work in providing you work hard and in a systemized way. Some salespeople struggle with being systemized even in these times where freely available technology helps us enormously.
One of the main attributes of human beings and particularly salespeople is that we have choices and we make choices; the choices we make in commercial real estate on a daily basis can radically impact the results that we achieve. That is the single most challenging aspect of salespeople in the industry. The majority of the salespeople make poor choices when it comes to their daily activities and points of focus. They would rather take the easy road than the challenging road.
Some of the things in the list are far easier than others. Invariably many salespeople do the easy things first and neglect the hard things. Most commonly, it is the hard things that really do bring in the business; prospecting is perhaps the most important item on the list. Most salespeople fail to prospect on a regular basis.
The most important things in the list can be summarized in a very short number of issues when it comes to commercial real estate salespeople. They are:
Prospecting for new business
Servicing existing exclusive listings and key clients
Finding of qualified buyers and tenants to satisfy the needs of each listing
Negotiating and closing on a realistic offers
All of these items link together to form the results that we require. Create a list of actions like this and incorporated it into your diary. Are there salespeople out there who are prepared to take the necessary steps to make their business happen on a daily basis? The answer is yes, and they are the top agents. Action is everything in our industry. Talking about something without taking the action is of no value whatsoever.