Investor clients are always active in commercial real estate and property. The same focus happens in most major cities around the world.
Some investors will be changing assets frequently as the property market allows; capital gains can be tapped into through timing and choice of the right property types in the better locations. That is where a good commercial property broker or agent can help with market knowledge and timing solutions.
Whilst commercial and retail property can be speculative as an investment type if you don’t follow the rules. Most investors seek to understand the balance of supply and demand, and the prevailing economic sentiment in a location. That is where opportunities can be found.
In this audio program, John Highman talks about how commercial real estate brokers can work with more property investors in a positive way; ultimately in ways that can open up into better property commissions and listings.
Property Investors get involved with commercial property for a number of reasons. Their motivations can be quite personal and specific to factors such as capital gain, redevelopment, highest and best use, building renovation, market rental, and portfolio mix.
In asking the right questions you can identify exactly what your clients and your Property Investors are looking for. From that point onwards it is simply a matter of understanding capabilities of finance and the correct time for a transaction; those observations will apply individually with your clients and prospects.
Here are some ideas to help you understand exactly what your clients are looking for relative to commercial and retail real estate investment:
Determine the property type that suits the balance of the portfolio. It is a well-known fact that portfolio diversity will lessen the risk and volatility of an investment portfolio. In a lessening the risk, the returns can also be reduced. That is where many Property Investors will divide their portfolio across retail, industrial, and office buildings.
Understand the factors of timing with any property acquisition or change. Locally you will find the pressures of property supply and demand impacting prices, rents, and time on market. There will be times of the year which are more favourable for the sales verses leasing activity.
Some properties have a definite lead up to a promotion or marketing campaign. Some things may need to be fixed and addressed. As an example, you may have to rectify weaknesses in the tenancy mix, vacancy factors, tenant selection, building cash flow, and rental structures. Look for those weaknesses before you implement a marketing campaign for the client.
Some of your clients will have a preference for portfolio improvement through diversity and change. They will be on the lookout for properties in particular locations, assets of particular value, and buildings that may offer a new and vibrant opportunity through redevelopment or a fresh alignment to the market rental locally. When you understand the needs of the particular client, it is quite possible to put together a transaction off market without the pressured factors and interference occurring with other agents, buyers, or tenants.
Within your database, determine a small segment of clients and prospects that you would regard as VIPs. Over time get to know exactly what these people are looking for from an investment perspective and identify when they could potentially need that repositioning or change. From that point onwards you can be researching the market and looking for the correct property acquisitions and opportunities.
When you focus a lot more on your individual VIP clients and their property needs you can get to the real triggers and points of change that create commissions. That then is a proactive approach to being a top commercial real estate agent.
Every so often you will hear some agent or broker say that ‘cold calling doesn’t work’. They are of course giving themselves some reason to not make the calls and avoid the process.
It is a fact that the top agents of the market are not afraid to make lots of calls every day to new people. The important issue here is that they are talking to both new people and current contacts. They are growing relationships on a daily basis.
Our industry is based on relationships. Get to know many property investors, tenants, business owners, and property developers. Keep in contact with them for the long term. Trust is a big issue when it comes to attracting new listings to your agency or brokerage. It can take months if not years for some prospects and clients to be in a position to move on a property matter.
So here are some detailed cold calling tips to help you grow your real estate business:
Determine your market area and targets. The market area is likely to be a part of a town or city and that should be determined by boundaries. Stay within your boundaries and get to know all the properties and property owners inside the zone. The targeted properties are likely to be by type and size. On that basis travel the streets in your sales and leasing territory. Find the quality properties and network the property owners and or landlords.
Call times should be set that work for your business and the people that you should be talking to. Ideally you should be making calls for 2 or 3 hours every day. That will take some discipline in your diary. Don’t let others interfere with your prospecting plans and efforts.
Record your numbers relating to calls out, calls connected, meetings arranged, and listings created. Over time you will see those numbers improve. The improvement can be fast tracked through practice each morning when you first arise.
A conversational approach works better in prospecting. Don’t pitch in any way; you really have no idea of the needs of the other person, so a conversation will get you further into understanding future opportunity.
Get a good database to track your call results. Simplicity and flexibility are important with a database. Protect your data and keep it up to date.
If you want more listing and commission business in commercial real estate brokerage, you will get there a lot faster with a professional approach to cold calling. Understand that most brokers avoid the process, and on that basis it can be a major source of leads and new business for you. Remain confident and make more calls.
In commercial real estate prospecting some people will want to do business with you and others will avoid any real connection. You will get the feeling that some people really do not care for a connection or information. Look for the ‘signs’, and understand what is going on (or not going on).
You can spend far too much time in chasing people that are ‘not interested’. Whilst it is great to have a good degree of professional persistence in prospecting, the fact of the matter is that you must protect your time. If someone is not receptive to your genuine approaches and communication you should remove them from your contact process and simple move on to talking to others.
In any town or city, there are plenty of people to talk to. Momentum is really important when it comes to growing your market share and your contact database. In most towns or cities you will have several thousand business owners and property investors to talk to. Finding them remains the challenge; however diligence will get you there over time.
Here are some guidelines to help you with a system for prospect and client communication:
Set some daily prospecting goals that you can relate to and believe in. That will usually involve a mixture of outbound calls, personal meetings, and property inspections. From that contact process you will find the people that really want to talk to you and build a relationship.
If you are at the beginning of your career and prospecting activity, start with some achievable numbers so that you can grow your momentum easily and effectively. Ultimately you should be prospecting for 3 hours every day. In that time you should be making 40 to 50 outbound calls. That can be a daunting target for many people. If you are at the early stages of your professional career and prospecting is a developing habit, then make 15 outbound calls every day until that becomes an achievable habit and target. From that point onwards, you can grow the numbers at five extra calls per day to reach the level of 50 calls. When you reach the level of 40 to 50 outbound calls, your prospecting time will be saturated with activity and meeting opportunities. At that level you can sustain reasonable activity and attract new business. From 40 or so calls you should be able to connect with 15 people. From that connection you should get 2 meetings per day. That is how you build your prospect list.
Practice your dialogue so that you can improve your connections and conversations progressively. In approaching a new person for the first time, the conversations should be based on trust and information. There is no point in pitching your professional services or pushing for a listing opportunity over the telephone; that can occur when you meet with the person and truly understand their needs in property today. Help the person trust you by providing valuable market intelligence and genuine property solutions.
So the key message here is for you to establish a contact and prospecting cycle based on trust; understand the necessity for filtering out the people that will not do business with you over the long term. Read the signs in any conversation, and avoid time wasting people. When you look at your sales territory and property speciality, there are likely to be many more people for you to research and connect with.
Lots of people work in a commercial real estate agency and brokerage. Only a small number are really good at the process and can be considered ‘entrepreneurial’. We call them ‘Top Agents’. They work really hard and do the right things every day.
Can anyone rise to the top of the industry and dominate the market as a ‘Top Agent’? The answer is always ‘yes’; in saying that, they need to be very skilled and have an open mind to learning and improving as a professional in the industry.
Over the years you will see so many different situations that you will need to adjust to or handle. When you make those adjustments, the opportunities open up for you as an agent or broker in listings and clients. Seek to improve your processes and systems so you are comprehensively covering your territory and property specialisation.
So what can you ‘tap into’ in the local property market today? Try some of these:
Property investors looking to grow their portfolio with quality stock
Tenants looking to relocate into a better property
Landlords with vacant premises that are dragging down their rental income and cash flow
Corporate tenants that are looking for expansion or growth solutions for the business
Clients that you have previously serviced that may want more help or could be changing focus
Solicitors or Accountants with property clients that need to make some property changes
Property investors that require property management services to help them get though leasing and income pressures
So can you help with any or all of these? Of course you can; it is simply a matter of marketing yourself accordingly. Comprehensively and persistently promote yourself into the local area and those people in the list above.
The cycle of commercial real estate is long and may take months if not years for some clients to get to the next point of action. If you stay in regular contact with the right people in the right way, the leads and the listing opportunities will come your way. The message here is clear; work hard and the business will come.
It is interesting to note that many agents and brokers that are new to the industry will usually take on any listing just to get some stock. Whilst that may be appropriate at the early stages of a career, they should start to focus on exclusive listings and quality properties.