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Lease Fee Opportunities for Commercial Real Estate Brokers

office foyer entrance way
Leasing commercial office space in lucrative business.

Leasing is a lucrative part of the commercial real estate brokerage market.  There are always vacant premises to lease and landlords to serve.  The leasing agent with the largest database of tenants will usually make more in commission income than those agents that do not have a good database.

It should always be remembered that a good lease opportunity today that is converted to a successful transaction will quite likely move towards a sale opportunity in the future.  It stands to reason that your personal leasing services and specialisation will help you with growing market share in a number of different ways.  When you get to know a number of landlords, you build the levels of trust and the key relationships that are required for sales opportunity.

The fees for leasing a vacant property or tenancy will reflect the size and the quality of the premises.  On that basis you should concentrate your leasing efforts on the better properties and the larger tenancies.  In that way you will achieve better inbound enquiries and inspection conversions.  Low quality listings are just as much work if not more than the better quality properties.

In considering the commission and fee opportunities from a landlord or a property, understand the following factors:

  • Lease rent review fees
  • Lease renewal opportunities
  • Assignment and subletting requirements
  • Vacancy management and leasing
  • Vacancy marketing
  • Project leasing
  • Tenant relocation
  • Tenant mix advice
  • Lease renegotiation as part of a refurbishment
  • Franchise leasing opportunities
  • Tenant advocacy work

So there are a good number of ways for leasing brokers to attract fee opportunities from professional leasing services.  Local area specialisation and leasing knowledge will help you achieve the momentum required.  I go back to the point that the size of your database will be critical to the market activity and commissions that you generate.  As a leasing specialist, you do need to know a lot of tenants and a good number of high quality landlords.  That is where your database will help you greatly.  Every day it needs to be nurtured and grown through ongoing contact.

So let’s look at some strategies and that you can implement in your professional leasing services.  Here are some of the important things to understand and implement.  You can add to this list other factors relating to location and property type:

  1. Review the history of the area as it relates to business change and opportunity.  There will be certain properties and locations that are more popular than others.  Understand the locations that will create the best levels of interest when it comes to property occupancy.
  2. Check out the market rentals that apply to your property type.  Give due regard to the variables across suburbs, towns, and cities.  Those market rentals will vary greatly and have a lot to do with property condition, ease of access, services, and improvements.
  3. Lease incentives will vary subject to the factors of supply and demand for lettable space.  Watch the number of new property developments coming into the area that could change the balance of occupancy.  They will also have an impact on incentive size and availability.

With this basic information, you can focus your efforts when it comes to property leasing opportunities.  Every day you should take further steps into building strong tenant and landlord relationships.

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Commercial Real Estate Agents – Property Developers are Worthwhile Contacts to Have

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Understand property developers and their priorities before you act for them.

In commercial real estate agency, you will come across many property developers.  They are useful people to know given that they will take on new projects from time to time.  New properties and new developments are a great opportunity for bulk commissions.  Project leasing work will emanate from new property developments.

Here are some tips from our Newsletter.

The focus of the property developer is to put the project together given the requirements of the local market.  They require the assistance of a good agent to solve the leasing challenge or the selling requirement as the case may be with the new property developments.

All of this being said, there are good property developers and some that are not so good (I guess they will say the same of real estate agents!).  If you are going to work with property developers, make sure that you have a valid and enforceable appointment to act and that your fees are well defined.

Here are some rules to apply to the project work with property developers:

  1. Trust is very important from both parts of the property equation.  They need to trust you and your skills in moving the property.  That’s why they focus on the choice of agent and will normally appoint the agent with a proven track record in project leasing.
  2. You need to trust the developer and his ability to pay your fees for the hard work that you put in.  They will usually ask you to do a lot of work ‘up front’ to help them get the project together with their financiers.  This work may be for no fee at all, but you should at least have a long term appointment signed on the property before you get involved in ‘free’ advice.
  3. They are likely to cut your fees and delay your fees (it’s a common problem), so be prepared for some difficulties there.  The basic message is do not work for a developer that is less than honest in payment of fees.  Over time they will usually self-implode because no-one will trust them.  They need a good agent more than you need them.
  4. Check out the other projects undertaken by the developer before you commit to serving them on an appointment to act.  A successful developer will have left a trail of good property projects locally.

When you get involved with these developers, be aware of the commissions you want and how you want to be paid.  Every part of the project sale or leasing should incur a commission that is fair and relevant for the work involved.  Do not provide discounts to the developer to win the work; he or she is likely to make you earn every dollar of your commission that you make.  Be prepared for a strong but challenging business relationship.

You can get more Commercial Real Estate Agent tips like this in our Newsletter.