In commercial real estate brokerage today there are many opportunities to tap into. In any period of 12 months, there will be changes to the sales and leasing aspects of the market that can open up into new listings and new clients.
Brokerage prospecting models should always focus on quality listings and quality clients. The word ‘quality’ is quite important here in that you will always get better inbound enquiry rates from quality listings.
It directly follows that a sales or leasing transaction successfully completed will give you the opportunity for repeat and referral business. It is also the case that those clients that have had business with you previously will give you leads and opportunities to tap into if you ask the right questions at the right time.
Consider the following rules that can apply to a referral lead generation system:
If you consider the last period of two years as a point of reference, identify the clients and prospects that you have successfully served during that time. Open up the contact process with these people again and seek a personal opportunity for a meeting and market related conversation.
You cannot ask for referral business over the telephone. Arrange a meeting in suitable circumstances where you can provide the client with a market update. As part of that process, ask questions about their current property interest and involvement, together with the appropriate referral questions.
Within your brokerage, you are likely to have a number of clients that are serviced in an ongoing way. That may be through project leasing or property management services. Keep in regular contact with these people as they may seek to adjust their investment portfolio. They will also know other property investors that may be leads or referral opportunities for you.
As part of your existing prospecting program, you should know plenty of local business owners and proprietors. Some of those people will own local investment property, or may seek to do so. Understand the intentions of these successful business owners as they consolidate their financial nest egg.
Track and measure all of the recent sales and leasing activity through your region. That information will be quite valuable when it comes to establishing new meetings with clients and prospects. It is not hard to get a meeting when someone respects your skills and relevance as an industry specialist.
As part of your weekly brokerage sales meeting, insert into the agenda the topic of referrals and leads. That will focus the agents and brokers on to the issue as part of a regular reporting process.
In commercial real estate you will get a lot of leverage from market intelligence and local property knowledge. This then says that you really do need to know the things that are going on in your real estate zone or listing patch. That may be an entire town or a portion of a city.
At the basic end of ‘market intelligence’ you really must have a good understanding of these things:
Properties currently listed for sale or lease with all agents
Properties being marketed by owners and landlords directly
Businesses seeking to expand or contract in property use or occupation
Time on market for listings today and historically
Selling and leasing seasons of activity
Prices of properties sold
Rentals of properties leased
The key property investors that own the high quality properties
The larger businesses that operate in the area
The levels of enquiry coming into your office for various property types
The types of properties that people are looking for
Property developers that act on new opportunities locally
Solicitors with property related clients
Accountants with clients that may need property help or guidance
Connecting with these people will help you build market share. Over time they will need the help of a specialised agent or broker.
When salespeople new to the industry first start their prospecting, they find that it takes time to meet the right people and create meetings. They struggle and they can feel rejected given that most of the prospects that they talk to will not require property help at that time. That rejection is just fine and quite normal; the cycle of commercial real estate activity is long and takes time to evolve.
Do your research. Connect with the right people every day and stay with them for the long term. Relevance and consistency in prospecting are the keys to winning new commercial real estate business.
You can use market information for leverage. Here are some ideas on that:
The solicitors and accountants in your area will have clients that need property help or may own the larger high quality properties. It takes time to win the trust of these professionals because they will want to protect their clients from any ‘unprofessional’ agents and brokers. You look at these solicitors and accountants as targets for the long term value that they can give you. It is likely that they will firstly ‘test’ you on a difficult project or client. When you show your real skill and knowledge, the extended business will come your way.
The properties listed with other agents will give you a reason to talk to other property owners in the same street. Some of them may wish to compete with the nearby listing.
Gather your market information and then use it to the best of your ability. Get leverage into your sales and leasing territory.
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.
When it comes to leasing commercial or retail real estate today, there is a distinct timeline to the process that should be optimised and driven by the commercial agent or realtor. Failure to drive the process can see the landlord or the tenant slow the entire process down. When the property market is tougher like that of today, a slower lease transaction is not a good outcome for any of the parties.
As a special note it is worthwhile observing that many a solicitor working on the part of the landlord or tenant will also be a source of slow action or response. Yes, I know solicitors are busy people, but the landlords lease document and transaction is really important.
So here is a timeline to develop and use in the marketing and leasing of commercial or retail property today. These are the main issues to consider in leasing, and you may be able to add to the list based on your location and property type.
Inspect the premises to be leased so you really know the features of the property and just how you will take people around the premises. A well-considered inspection process will help in negotiations and conversions from initial enquiry to the creation of lease.
Remove any hurdles or presentational issues in the property before the marketing starts. That may mean renovation and carpeting or similar upgrades.
Define the target market for the property to be leased so that you really capture the right people from your marketing efforts.
Establish a targeted marketing campaign to attract the right enquiry. As part of that process, choose the right factors that help you promote the property on the internet and in the newspapers. What features exist in the property that will help lease it?
Get a signboard on the property early in the marketing campaign to send the message to all the local business owners and property investors. When the signboard
goes up, take brochures to the local nearby businesses to spread the word about the property availability.
Qualify the tenants coming off the marketing efforts before you show them the property. The same rule applies when someone rings you off an advert in the newspaper or on the internet. Ask the questions; in many cases the call may not be genuine and could be competitors seeking information.
From a good property inspection, any lease negotiation should be evidenced and initiated in writing. This will be by way of a well-constructed letter of offer or lease agreement. Get the parties to show their intention on paper. As part of that process ensure that you get a good deposit commitment from the party making the offer. That should also include an agreement to provide a bond or band guarantee to the landlord as part of taking a lease from the tenant.
If agreement is reached between the parties to do a lease, then documents should be prepared quickly by the landlord’s solicitor. There should be a follow up process to ensure that the signing of the lease can occur quickly and effectively. Add to that the necessary paperwork and deposit or rental money and you have a complete cycle of lease.
When all factors of the lease agreement are correctly actioned by all parties, then and only then should the keys to the premises be made available to the tenant for fit out works to commence. As part of that, the landlord should be approached to obtain the approvals of the new fit out construction and configuration.
So there are a lot of things to do here. Be well prepared and use a checklist to the process. Your leases will then be more effective in both negotiation and completion.
The commercial and retail property market is changing frequently and in different ways. This is always relevant to your location and particular property type. That being said, you really do need to know the current comparable market information when it comes to the listing of any property. The clients that we work with should be suitably primed and briefed with the right information so that they can make correct choices when it comes to prices, rentals, and marketing.
So we are the experts when it comes to marketing and transacting commercial and retail property. If we are recognized as such, the enquiries and the referral business will come to us; in an ideal world, this is a great way you to work in the industry.
What we can do here is show the clients and prospects that we work with our comprehensive knowledge of the marketplace and the current property activity. This gives us a huge advantage when it comes to negotiating with both parties in any sale or lease situation. The market evidence can be used to negotiate through hurdles and create agreement.
Here are some categories of comparable market analysis that will help you in your knowledge:
Competing properties should be identified for each and every listing on your books. The clients in each case should be advised of the prices and marketing strategies applying to those other competing properties. It may be necessary for you to adjust your marketing recommendations based on the pressures that the competing properties create. When it comes to very unique property, you can remove your listing from the market until such time as the competition has been reduced.
Sale prices will always change. Getting to the real facts of each and every transaction can be a challenge however many other commercial agents will share price information after the transaction has been completed and closed. The industry is rather specialized and good agents will normally share market intelligence within reason. Accurate price information will be useful when it comes to the next listing within the property type.
Rental evidence is required to support the prices and returns for good investment property. When the property market gets tougher, or enquiry becomes limited, the buyer expectations will change to an increased yield or return. You never really tough market, the price fall compared to the income return can shift by as much as two per cent or more. This shift is in the percentage return on investment. Whilst Sellers may not like to accept the real facts of the market, as the expert commercial real estate agent, you need to convey the facts from closed transactions, rentals, and prices. There is no point taking on an overpriced listing that can waste your time and take you away from other more realistically priced and or rented properties.
Time on market will change constantly and seasonally throughout the year. You will need to differentiate between property types and property quality. There is a marked difference between the time on market for quality property verses that which applies to an ordinary or below average property. Allowances should also be made for the chosen method of sale or rental as the case may be. Some clients may have been influenced by other agents giving poor information.
Methods of marketing during the year may need to change subject to the expectations of the prospective buyers or tenants. Seasonal festivities such as extended public holidays should delay the promotional of particular properties. Start the campaign when you know that the prospective buyers or tenants are looking around. Choose the methods of marketing that can reach the target audience efficiently and effectively.
Supply and demand for property will change throughout the year based on prevailing economic circumstances, the sentiment of the business community, and new property developments in the location. Monitor the trends of property development at the local planning office. Get updates regards new developments under construction or consideration. Be aware of the construction costs of different property types and the consequential viability as it applies to new property developments. From time to time, the expectations of return on investment in a new property development together with the impact of the actual construction costs will limit the viability of any project. Property developers work on margins and levels of profit before they will commit to a project. They also seek to understand the pressures of growth as they apply in the local business area. You also can monitor these things.
Changes to business sentiment and the community will always shift due to the changes in the local, national, and global economy. That being said, there are always segments of the business community that are successful given that they serve and act within different market demographics or segments. Understand who or what they are, and tap into them for the opportunity of a property transaction.
Enquiry types come and go throughout the year in commercial real estate. If you maintain a good database, you will understand the types of enquiry coming in now and what those people or businesses are looking for. You can advise your client accordingly and help them match their property to those requirements. You can also shift your prospecting efforts accordingly to get better results from your listings and transactions.
Need more ideas to help your commercial real estate listings and commissions? Join us here.
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