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Negotiation Management Strategies in Commercial Real Estate Brokerage

city at night

In commercial real estate brokerage, be that in sales or leasing, we come across plenty of different people and property situations.   Some commonalities will exist in prevailing market circumstances.  (NB – you can get our free commercial real estate brokerage course right here)

Great agents are top negotiators and will have had plenty of exposure to many situations.  They know how to position the property challenge for offer and acceptance under the pressures of the moment.

In your brokerage, there will be common property challenges that most agents and brokers are experiencing with sellers, tenants, landlords, and buyers.  I always see it as valuable and worthwhile for those issues to be shared across the team and for practice or role play sessions to occur.  ‘Practice makes perfect’ as they say.

You can never know too much about market situations and conditions.

In this audio program, John Highman, Commercial Real Estate Coach talks about the factors that you need to control in property negotations today.

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How to Choose the Right Retail Tenants for Shopping Centers

shopping center escalator in mall

A retail shopping center is a special place where the tenant mix just has to match the client and customer requirements for the location.  If you make mistakes in retail tenant placement then sales and customer interest in the property will slow.  That can only mean on thing and that is a decline in rent.

So there are issues to consider in finding the right tenants and placing them in the property.  Certainly the landlord should have a say in what they think about tenants and tenant mix choices, but the center manager should give guidance to the leasing process and tenant placement.

In this audio program, John Highman talks about retail leasing and the important choices to be remembered in attracting and converting tenants to a retail property and or shopping center.

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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.

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Commercial Real Estate Leasing Vacancy Solutions and Strategies

Large entryway with tiles and plants
Vacancies in office property can be resolved through strategy.

In commercial property management and leasing, you have to closely watch the tenant mix and the leases for any upcoming vacancy risk and or tenant in distress. The property market changes all the time, and each city will have unique pressures that can set the momentum to move tenants around and impact business performance.

(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)

Local Issues?

So what is happening locally for you in your location? Do you have clients and properties under vacancy pressure? It’s an opportunity to resolve. You really do need to know why vacancies are happening and then work on a strategy to resolve them.

Before I go too far into this concept, I will say that the leasing market is lucrative from a commission perspective, if you focus on one or all of the following:

  • Quality properties – some properties are better than others. Look for the differences in local properties and buildings in your location. Choose the better properties from a leasing perspective.
  • Larger tenancies – the size of the tenancy will dictate more rental and therefore more fees per transaction.
  • Corporate tenants – the companies and corporations in any town or city tend to need property help in relocating and expanding or contracting. You can have an appointment to locate their next property lease.
  • Particular property types – when you look at the rents per unit of area per property type, you will soon see the property types that create better interest from tenants and better rents. That is where you should focus your leasing efforts.

Given these 4 facts, you now know what types of leasing factors should feature in your prospecting model. Take deliberate care to stay within your set leasing criteria. You will then find the tenants and the better properties.

What value do you bring?

So why are vacancies happening in any building or location, and how can you help? To get to the answers, you really do need to look into the following factors and do the appropriate assessments:

  1. Rental pressures and shifts – rents that are consistently climbing will reach a plateau where business owners will resist leasing. In a city where rents are escalating, understand the realities of a business paying higher occupancy costs. What are the limits?
  2. Competing properties – other properties locally are likely to be competing for your tenants so watch the problem and intervene where necessary.
  3. Occupancy costs – rent and outgoings all add to the cost of occupancy; a tenant has to be able to afford the total occupancy package.
  4. Tenant mix problems – some tenants have issues with being close to others and other business types; look for those problems.
  5. Permitted use or exclusivity – in a larger building where you have multiple tenants, ensure the balance of tenant mix, and avoid giving away exclusivity (retail properties in particular).
  6. New properties being developed – any new property will shift the balance of supply and demand, thereby pushing businesses out into the leasing market.
  7. Landlord issues – some landlords are very difficult to work with, and will give tenants a good degree of frustration as part of lease negotiation and occupancy.
  8. Quality of services, amenities and improvements – buildings age as do the services and improvements.

From these things, you will find the properties and the businesses needing leasing assistance. At that point you have some advantages to work with.

(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)

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How to Build Better Business Relationships in Commercial Real Estate Brokerage

better business relationships in commercial real estate sml

In commercial real estate brokerage I frequently get asked about how new agents can find the right people and clients to serve in their town or city.  The question is so common that I just wonder why those salespeople do not know the obvious or take so long to understand it.  The industry is similar to many others; diligent focus and work is required at a personal level to find new business, and when that happens, results occur.

The new business is always out there to attract and convert across sales, leasing, and property management.  Yes, I know it takes time, but the diligence and actions of ‘top agents’ always shines through when it comes to finding the best clients, properties, and commissions.

It is my firm belief that you cannot be a top agent without some personal plan of prospecting action that you implement every day and refine over time.  Regular actions create habits, and habits in our business change listing conversions and commissions.

I have put together some notes here in pdf for building new client relationships in commercial real estate brokerage.