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Leverage Factors in Commercial Real Estate Brokerage

hi rise office building.
Look for leverage in every property listed

 

As an agent or a broker in commercial real estate today, the current events in the market will be sources of substantial leverage and opportunity when it comes to a future sale or a lease situation.  You can also find plenty of property management opportunities within a sales or leasing transaction.

The message here is quite clear for the astute agent or broker.  Look for the opportunities within the market based on industry trends and business churn.

The property market moves in cycles and in the case of commercial property it is the local business or economic cycle that impacts the decisions of property investors, business owners, and tenants.  What you can do here is built leverage and action from certain activities in your market.  Here are some ideas to help:

  1. Inquiries – Any property inquiry coming in to your office from the marketing of listings will allow you to create a conversation, qualify the party, and potentially find out about their new property needs and changes.  Understand the motivation of the person making the inquiry, and the timing of their decisions.  It is likely that they will be talking to other agents locally, so be prepared for quoting other properties where appropriate that may suit their inquiry.
  2. Quality listings – When you focus on quality listings you will generally have many more direct inquiries coming in to you from each marketing process.  Understand what the factors of attraction are when it comes to tenants and buyers today.  Fully qualify the people that you talk to and then itemize or short list property requirements.  You will soon know how to package a listing and find the right properties for today’s market.
  3. Inspections – Every property inspection allows you to connect completely and thoroughly with a potential tenant or property buyer.  If the subject property inspected doesn’t suit the inquiring party, add some other property inspections to the list.  Most buyers and tenants will purchase or lease property from within the local area.  That is because they understand the location, the values, the rentals, and the opportunity.  Track your inspection activities within your database.  Keep in contact with inspecting parties for the long term.
  4. Methods of sale or lease – There are differences in the market when it comes to the successful methods of sale or the methods of lease.  Understand the factors that work in your local area with buyers or tenants as the case may be.  A timed method of sale such as an auction can put some urgency in the property decision process.  A quality listing taken to the market through the auction process will usually create a lot of interest.  From one auction marketing campaign you can create a substantial database of qualified buyers.
  5. Offers – An offer to purchase or lease may or may not be successful in today’s property market; a lot depends on the client you are working for and their impressions of the prevailing market conditions.  Understand the offer limitations and the negotiation objectives of the people that you are working with; negotiation skills will help you in this process.  You can quote other properties to those people that may have been unsuccessful in any property offer.
  6. Referrals – From any successful listing, be it in sales or leasing, you will find further new business in asking for a referral.  Be prepared to ask the right referral questions at the right time; understand that most business people and investment property owners have relationships with others that can lead to more opportunity.

So the message here is quite clear and most particularly that simple issues and events in commercial property today can give you some leverage and lead to other opportunities in new business over time.  Be prepared to work with the right people and see the opportunities.

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Choose the Right Method of Sale or Lease

City buildings on Hong Kong harbour. Cranes in the foreground. Buildings in the distance

In this commercial property market, the method of sale that you choose as the real estate agent in selling a property is critical to the outcome. Every time you do a listing for sale, carefully consider just how you should take the property to the market. Make the right choice based on facts and not your preferences. Wasting time and experiments in selling are not good options in this property market.

You do have a few choices such as:

  • Sale at a price
  • Sale with no price
  • Sale by negotiation
  • Sale by exchange
  • By Tender
  • By Expressions of Interest
  • By Auction

The right method of sale is the one that matches the property type in the current location, given the way in which the buyers like to buy. If the buyers do not like the method of sale, it will stifle enquiry and they simply will sit back and see what happens.

Let’s take the auction method of sale for the property as an example. Not everyone likes to act in an auction and unless you think you will have plenty of enquiries for the property when you go to auction, it can be a difficult process of sale; invariably the property may go to auction and be passed in. All your hard work in marketing and inspecting the property can be lost effort.

Far too many agents choose the method of sale that suits them with little regard for the facts of the market and buyer trends.

When you get the method of sale correctly chosen and established, an enquiry should start and inspections should occur. Remember that the first 3 or 4 weeks in any marketing campaign are really important; if you waste that time with a poorly chosen method of sale, everything you do will be lost. In this property market that is not a good idea.

Make the right sale choices in this market, and give the client the right reasons to proceed with your recommendations. Everyone wants a good result. Know what the buyers want today and tap into it.