In commercial real estate agency, you should be adaptable to the challenges of the property market today, and the requirements of the client. This is really easy to do when you are a specialist in a property type and a location.
As a specialist in a property type and location you will or should understand the factors of pricing, rentals, tenancy mix, time on market, marketing, and negotiation. You are the specialist that can take over the clients property challenge and turn it into a successful property outcome. Specialization is the key to the process.
The clients that we work for require the right information and strategically relevant skills on the part of their agent. If you pitch and present your services correctly, your conversion to an exclusive listing will be quite easy.
Those agents today with an abundance of ‘open’ listings are those agents that have not sufficiently branded themselves as experts in the local area. They have no real point of difference when it comes to pitching their services. The clients they work with can see no real benefit in exclusive listing with a particular agent. If you want more exclusive listings, you will need to solve that perception. I go back to the point that specialization as a property agent is essential to the process. Top agents win more exclusive listings and that is the rule not the exception.
To be adaptable as a specialist real estate agent means that you have the necessary skills and the information required to handle the following situations comfortably:
- A client requires a vacancy in a property to be leased efficiently and effectively. The tenancy may have been vacant for some time. The client therefore requires innovative solutions that apply to the leasing process. They need that vacancy filled as soon as possible.
- A vacant property requires repositioning in the market so that it may be sold or leased. The pressures of the prevailing market conditions and the zoning requirements set the guidelines for the target market and the efforts that you need to undertake.
- At commercial or retail property has reached the end of its economic life given its current and present usage. On that basis the property needs to be subjected to a material change of use and redevelopment. As part of that process you will need to consider the approvals and strategies behind local planning and development.
- The client’s property may be under-performing from an income perspective. You should know how to review the tenancy mix, lease profiles, rental strategies, lease documentation, and outgoings recoveries. On that basis you will soon see the discrepancies when it comes to income recovery and growth. You can add to this assessment the rules and legalities that apply to rent review negotiations, lease option negotiations, tenancy relocations, and redevelopment alternatives.
- The client’s property today may be a future sales opportunity. In leading to that sales situation, they may have challenges that apply to the tenancy mix and the income profile. Over time you can help them with income modification and capital growth.
You can look at a property from a number of different perspectives. It may be vacant, unimproved, leased, or vacant. The value for the property can also be determined in a number of ways based on the identified potential and the prevailing market conditions. To assess the value of the property, you can cross reference two or three methods of valuation or appraisal to see what will work when it comes to any future listing price and marketing opportunity.
The top agents in a commercial real estate agency today are very adaptable. They understand how to move across the requirements and changes of the market. They know how to match the client and their property to the prevailing market conditions. You can do the same. Get to know your market and how it is changing and growing.
In commercial real estate agency, the sales pitch and presentation process is something that will hopefully occur quite frequently for you. On that basis you need to be ready to present your ideas and strategies at any time and on short notice. You never know when a client or prospect will want to talk to you about the market or the listing alternatives available when it comes to commercial real estate sales or leasing.
As a general rule, every agent should carry a complete and comprehensive marketing folder at all times with examples of property marketing solutions; those solutions should apply to leasing, sales, and property management.
Watch your competitors
In most property presentations situations today, you will be up against a number of other agents all seeking to attract the same listing into their agency. Those other agents will be using a variety of enticements and discounts.
It should be said that the provision of discounts to a client is not a good way to win a listing. Agents that cut corners on fees will generally cut corners on service. Given that the client wants a result with their property, cutting corners really doesn’t work. Adjust your pitch to suit that message.
You should win the listing based on your experience and relevance to the property type and the client. Your strategies and marketing solutions should be so comprehensive and relevant that the client can see no other alternative but to give you an exclusive listing. Build your presentation on that logic.
Discounts don’t work
The clients seeking a discount should be encouraged to understand the commerce of the deal and the marketing effort required by you as the agent. A few hundred dollars saved in commission is nothing compared to the better price that you can achieve for the client with a dedicated campaign that is personally conducted.
It is the quality of your presentation and pitching process that will help the client understand exactly what you are going to do for their property and its challenges. Your services need to be superior to that of the competitors locally. Be relevant and be different. Show the client why they need you.
Here are some tips to help you refine your presentation strategy when it comes to commercial and retail property.
- Check out all the competing properties in the local area so you can advise the client as to how the listing needs to be comprehensively marketed.
- The first four weeks of any marketing campaign are the most important. During this time you will need to connect with the defined target audience and create as many inspections as possible. Structure your marketing recommendations accordingly.
- Be aware of the current market conditions relative to the property type, and the seasonal sales or leasing pressures that can influence the starting of the marketing campaign. If you have a quality property to release to the market, it may pay you to consider the ideal time frames to do that.
- Use some sort of graphical display to illustrate to the client how you will move the listing forward. A Gantt graphing process is good for this application. You can show the client exactly how things are done and where those things will head over the coming weeks.
- As a general rule, every property should be exclusively listed. In that way you can create the correct amount of momentum, optimize the inspections, and negotiate directly with the client knowing all of the facts that are involved.
- Vendor paid marketing should be part of the exclusive listing process. Get quality photographs taken of the property to feature in all the marketing material created and used. Be aware of the opportunities that each marketing method provides. The Internet should feature in every campaign. In the first instance, it is the visual side of marketing that will attract more enquiry so use the best photographs wherever possible as part of your marketing effort.
When it comes to pitching for the commercial property listing, your strategies and ideas need to be well planned and optimized for the prevailing conditions and the property. Help the client see why your strategies are so important.
When you work in commercial real estate agency, you should start your day strongly and with focus. Get as much done as you can before other disruptions start to take over (and they will).
It is a fact that things in commercial real estate agency will happen daily that you do not expect. That being said, there are still key things that you need to do every day to improve your market share and client connections. If you overlook these things, you will soon have less commission coming in and you will also be missing on the quality listing stock.
So to start strong every day, you need a plan and a process. Action is everything in our industry and directed action can allow you to form habits. It is the habits that will take you forward as a professional in our industry.
Here are some ideas to help you with effectiveness and focus as a commercial real estate agent.
- It is easier to control the start of the day than it is to control the whole day. If you can control 1/3 your day, you can be quite successful and effective as an agent. Plan your activities so that your working day can and will be under your control from 7 am. to 11 am. Don’t let others change or modify your diary before 11 am.
- Prospect every morning from 8 am to 10 am. Get your outbound cold calls done then. That one single process will be critical to your market share. It is interesting to note that most top agents do this. Struggling agents overlook the process or avoid it.
- Talk to your clients from 10 am to 11 am. After 11 am the pressures of the day can take over so get to your important clients on key issues early. You can do the same thing at the end of the day and in the evening.
- Look after your database yourself. Only you have the information that should go into it, and only you are going to benefit from it being correctly used. If you go into your database every day you can shape the information and use it to your advantage. Ongoing contact and trust in our industry is a really big thing.
- As you move through the day and the week, track your numbers and ratios relating to calls out, meetings, presentations, listings, inspections, and deals closed. You should also track your exclusive listings as they will do more for your market share than open listings.
So you can see that the key thing here is control. When you are in control you can get more of the right things done. That is how you move up in the industry.
Leasing commercial real estate is something that can provide a good buffer of commission when sales listings and actual sales have slowed. It is also the case that a successful lease transaction can lead to a future property management or sales opportunity. This then says that all top commercial real estate agents should be prepared to lease ‘quality’ local property.
Notice that I said the word ‘quality’ when it comes to property selection. Determine the property size and type that will give you the appropriate fee for a successful lease transaction. Focus locally on quality, the good landlords, and the quality tenants. A lease transaction can take a reasonable amount of time to initiate and complete. On that basis you should only focus on the good deals and the good opportunities. Let some other agent have the small things to lease that have minimal fee results.
Here are some tips for taking enquiries from tenants today when it comes to leasing new premises or relocating:
- Make sure that you’re talking to the decision maker when it comes to the particular tenant. Get the contact details and the identity of the tenant sorted before you provide too much property information.
- Ask them about the property type that they are looking for when it comes to improvements, services and amenities, location, and permitted use. Also find out about the required lease term, the rental budget, and property usage.
- The tenant’s staff and the customers interacting on the property will create certain challenges when it comes to improvements and location. Car parking is a good example and case in point.
- There are big differences when it comes to leasing office, industrial, and retail property. Create checklists for each so you can ask the relevant questions with potential tenants.
- Is the tenant coming to you today from another property location? Are they new to leasing property locally? If they know nothing about the local area, you will need to fill in the gaps when it comes to business demographics, transport, communication, local area profile, and property usage.
- If they are coming to you from another property location, they may have some timeframe to satisfy or a property disposal requirement. Ask the right questions to get the complete picture. You may even find another listing requirement with the property changeover.
- Has the tenant looked at other listings with other local property agents? It is quite likely that they have seen other listings and may have current negotiations underway through other agents. It is good to know if this is the case so you can adjust your strategy accordingly.
Don’t be too eager to take a tenant to a property. Get all of the facts together prior to the inspection process so that you don’t waste your time with the incorrect strategies or listings. Match the tenant to the property before you leave the office; qualify them. If necessary take them to a number of properties to give them a comparison of current market conditions.
Get more tips like this in our Newsletter.
Are there dangerous clients in commercial real estate? Absolutely; yes is the answer. You will come across them all the time. You must protect yourself from these clients that are out to manipulate the deal for themselves without true transparency.
Ethics in our industry is really important. Poor quality clients can derail your listing integrity and commissions. So the message is that you should keep to the rules in the industry that protect your actions and listing activities. Clients that are less than honest can destroy your business in many different ways.
So here are some signs to look for when it comes to client selection and communication:
- Watch out for the clients that will not sign an agency appointment ‘until you find a buyer or tenant’. The request happens all the time in our industry but you cannot and should not act outside of the laws of commercial real estate agency in your location. You are bound to act legally and with integrity; if the client wants you to ‘bend the rules’, they are not a client to have and you simply cannot trust them. In those circumstances walk away from the deal or the listing. Let some other agent waste their own time and risk legal action. It is not fun when legal claims are made against you.
- Some clients work with many agents. Now this is just fine if all relationships are ethical and legal, but your listing and negotiation information should be protected by a valid appointment to act and an established client and agent relationship. If you suspect that the client is sharing your ‘market intelligence’ with other agents, you could have a problem.
- If your client avoids giving you an exclusive listing, it can be a sign that you really do not have their commitment and trust. They could also be working with many other agents at this very moment in trying to sell or lease the property. Ask the questions and get to the real facts of the matter.
- A reluctance to give you full access to the property or comprehensive property detail is a sign that something is going on. A similar problem is evident with the client not disclosing tenant and income detail for the property. If the client is not being open and honest, step back from the deal until you know all the facts. Get copy of all current property related documentation before you go to the market, negotiate, or talk to other people. Understand the facts that are before you.
- Failing to put things in writing can be a big problem in our industry. Many conversations across the telephone happen every day. Always keep your notes of client and customer conversations and instructions. Evidence the matter back to the other party in an email or similar written or electronic form.
Lastly something should be said regards confidentiality. Know who your client is and what their instructions are. Keep client agent discussions and instructions confidential. Disclosure of privileged information can get you into a lot of trouble.
The retail shop leasing process is quite specific and special. It requires property agents that are very familiar with the retail industry and shopping center dynamics.
It is no secret that the retail shop industry is changing due to the impact of the Internet and the current economic circumstances globally. That being said, the retail shop industry doesn’t disappear it just changes. We are best placed has specialized leasing agents to help tenants and landlords move through the process of change when it comes to shopping centers and specialist retail properties.
Here are some tips to help you with creating your retail tenant mix and plans for shopping center leasing optimization:
- Check out all of the other competing properties in the local area. They will have factors associated with vacancy, tenant movement, and tenant success. Make a list of their tenants for direct contact and cold calling. Some of those tenants will be more successful than others. It is those tenants that you should encourage to move to your property.
- Look at the other competing properties with regards to property improvements, customer access, and customer profile. Also look at the factors of car parking, public transport, and property size. Are there any weaknesses in these factors that can be optimized in your property?
- The franchise groups in the local area will always be a good opportunity for tenant enquiry and new leases. It is simply a matter of understanding the properties that they are looking for. It is likely that they will have specific lease terms and conditions that apply to any premises that they negotiate on. You will need to brief your landlord on the standard terms and conditions that the franchisor requires. The franchise agreement needs to integrate with the lease of the premises. Your landlord needs to understand that fact so that the business can operate within the branding and business agreement requirements of the franchise group.
- With any larger retail property, it pays to stay ahead of any lease issues. They include rent reviews, options, and lease expires. Look at all of these events at least 12 months in advance. This then allows you to plan the interaction with the tenant given the conditions of the local property market.
- If you want to be a retail leasing expert, grow your knowledge with regard to business viability and different business types. Some businesses have different requirements as to cash flow and occupancy costs. If those requirements are exceeded, it is likely that you will have an unsuccessful and volatile tenant. Ultimately that will mean a new vacancy.
- With your existing tenancy mix, consider the factors of expansion and contraction as they apply to each particular tenant. Help the existing good tenants within the property to adjust the leasing needs and remain in occupancy.
- The anchor tenants in a retail property are very important to the overall success of sales, specialty tenants, customer visits, and market rental. Stay close to the anchor tenants as part of an ongoing lease strategy.
- Retail leasing and shopping center performance are quite unique strategies to be developed for each landlord and property location. It is not unusual to have a business plan developed for each medium to large property. In that plan you will have income profiles, expenditure management, maintenance plans, tenancy strategies, tenant retention solutions, and reporting requirements.
Retail shop leasing is perhaps one of the most interesting and rewarding segments of the property market today. That being said, it does require people that understand retail business and property viability.
Many property investors are attracted to investing in industrial property because it is easy to understand. The tenant, the lease, and the property are quite straight forward from an investment perspective.
It is also worth noting that many commercial real estate agents ‘cut their teeth’ in the industry by working firstly on industrial property sales and leasing. The basic nature of the property is easy for them to grasp and negotiate on.
Some commercial agents will like the industrial property type so much that they may stay with the segment of the market and become true ‘specialists’ in an area. If that is the case they will usually rise to the higher end of industrial property sales and leasing in both size and value. There are plenty of large companies and industries looking for specialised assets for the business growth of their company.
So here are a few more observations about industrial property today:
- Take care when it comes to industrial properties that are created for a specific industrial use and tenant. They will generally have a high liquidity factor and be hard to move when the property is to be sold.
- Special purpose or single purpose industrial properties will be difficult to lease (or sell). As a case or example in point, large cold storage industrial properties are so specialised that an investor would (or should) want a high yield and long lease with a ‘blue chip’ tenant before the property was considered a wise purchase.
- This property type is usually the first to be impacted when the national economy and business sentiment is under pressure. That being said, industrial property is usually the first to respond when the economy is improving.
- The premises and buildings are easy to manage. The leases are basic and straight forward in most circumstances.
- The rental structures in industrial premises are usually a type of net rent. The tenant will usually pay most if not all outgoings.
- Capital expenditure in an industrial property will be impacted by property use. The property owner should get a depreciation schedule of all capital items so they can plan the larger expenditure of capital items that may arise in the future.
- The zoning of the property and premises will have direct impact on use and therefore tenant occupation. Ensure that the zoning offers sufficient flexibility for property occupancy and returns.
- Industrial premises are frequently a single tenant and single occupancy issue. The facts are easy to understand and tenant mix is not a problem as it would be by comparison in a retail property.
When you look at overall property performance, consider the growth potential in rental as well as the growth in capital appreciation. The two factors are not always linked and may be impacted by locational factors.
In commercial real estate agency it is very much the case that the day will take over your diary unless you take control. People will impose on your time and things then will go absolutely nowhere.
If you are like me, you will hate people wasting your time. In our industry time is money and we need to remember that. In an average day lots of people will want a slice of your time. How about this list for starters?
- Existing clients with their listings
- New clients wanting to list their property
- Team leaders wanting to talk about the weeks results
- The boss (for all sorts of reasons)
- Tenants looking for property
- Buyers wanting to inspect your listings
- Telephone enquiries
- Administrative people needing help getting your marketing campaigns underway
So, all of this says that we need to set some solid rules that will not be broken or changed. We must control our time as it is the main thing that we can control in commercial real estate agency.
Systems can set you free to get on with your business. When business runs smoothly then you find the clients and the listings that you need.
Every system in commercial real estate is essentially made up of subsets or systems for key things. Each part of the process can be refined and improved. I have had systems for all of the following:
- Prospecting systems so I can keep focused on the right properties and clients that will need my services one day. Every good commercial agent should have a pipeline of some type.
- Presentation processes so that every property that I pitch for is a deliberate pitch that is well controlled to a solid approach that I know works. Confidence here is the key.
- Listing systems for each property type such as office, industrial, and retail property. I would also have systems for sales, leasing, and property management. Retail shopping centres are quite different and feature with their own systems that are unique to retail.
- Inspecting a property is quite special and having a process for that is wise. A checklist to help you ask the right questions and look at the right things in the property will always be of benefit. The inspection system should take into account the property type and the location; that is why you need checklists for this.
- Marketing processes for the listings that we work on should not be generic or ordinary. The fact of the matter is that each property should be uniquely promoted to a plan; this assumes that it is an exclusive listing and you have vendor paid marketing funds paid in advance.
- Negotiations and communications with clients should be documented. It is common that things will get delayed or changed when you are negotiating with a client on a sale or a lease. When you have the supporting documentation and notes, nothing can go wrong.
If you are finding that things are out of control and you are struggling as an agent, take a look at your systems in commercial and retail real estate agency. Build some processes and controls that help you move forward.
In commercial real estate agency today, in any given year, you will be seeking new staff to employ and also evaluating their relevance to the agency. To assist in the process, you should have an evaluation system that allows you to understand the candidate, and the value that they can bring to your agency.
For this reason you should create a checklist to be used in an employment interview. It should also be said that you should have two or three interviews with the ‘short listed’ candidate to ensure that all of your observations are understood and confirmed. In each meeting bring a further person from your existing staff into the interview so that they may give you extra comments and observations from the meeting.
Here are some evaluation processes and questions that can help your employment interview in commercial real estate today.
- Get detail from the candidate as to what they have done in the industry and where that occurred. Check out the information they provide to you. Ultimately you need to know that the candidate is suitably skilled and professional in their business activities.
- Talk to previous employers to understand the way in which the candidate operates at a professional and business level. In most cases you should be talking to two separate employers.
- Get details of the successes that the person has achieved and can prove to you are relevant to your industry and location today. The role of an agent or salesperson in commercial real estate today is quite complex. They are required to undertake specific tasks related to prospecting, presenting and pitching, inspecting, qualifying, negotiating, and documentation. Each facet of the job has specific disciplines. Make sure that your candidate qualifies in all respects.
- Always talk to referees provided by the person. Those referees should be unrelated and preferably from a business environment and workplace. Get to the real truth of employment.
- If you don’t feel 100% regards a particular person in the interview, then there is something that is wrong and you simply need more time to understand what that is. It is better to take time in your decision than to step into a new employment arrangement was someone that is not totally correct for the role.
- Today a salesperson or an agent in commercial real estate must bring considerable technology and computer skills to the task. They must be prepared to undertake personal administrative work using computers and technology. Ensure that the person is comfortable with this process and can prove to you that they understand computer usage and also software applications.
- Your sales team will be supported by administrative staff. That administrative process and backup will differ based on how you want to run the agency. It should be said that the administrative process and backup system will cost money and that cost recovery should occur from commissions and or a particular desk fee that applies to each agent and salesperson.
Here are some questions that you can put to the person under interview circumstances.
- What is the most frustrating thing about commercial real estate today and how would you handle that?
- How do you handle the paperwork part of the business and what systems do you use to support that?
- What do you enjoy about the commercial real estate business today?
- Why do you want to be employed in commercial real estate and most particularly in this agency?
- What do you know about our business? They should be able to show that they have researched your business prior to the interview.
- How do you prospect for new business, and what are your processes and systems of support?
- Tell me about the database and the customer base that you established in your previous place of employment.
- What do you believe are your most relevant skills that you bring to this agency?
- Tell me how you work within a team, and how you would improve the team and its interaction with you.
- If you could describe yourself in two or three sentences, what would that be?
- What are your most significant challenges as a professional salesperson? How would you improve on these challenges to resolve them and build your future business?
- Where do you see your career heading in commercial real estate today and over the next five years?
- Why should I employ you?
- What do you know about commercial real estate? Tell me more about that.
So these are very tough questions for some people to address. That being said, commercial real estate is a tough industry and requires tough people that can handle difficult questions. Formulate a questionnaire based on these questions and others that can help you fully qualify the candidate for employment in your agency.
Get more tips on employing Commercial Real Estate Agents in our Newsletter right here.
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.
As an agent in commercial real estate for many years, I know that every bit of marketing material needs to be carefully optimised. The rule applies even to the envelopes that you use in your direct letter or brochure campaign.
You want your letter to be seen and opened. The envelope will help with that. If the envelope is too ‘business like’, it will hit the rubbish bin faster than you can imagine. So we should set some rules to the letter process to be adopted in commercial real estate.
Try some of these:
- Use a non-standard envelope colour. Blue is good and also is orange. The colour should still allow the address details to be clearly seen.
- The ‘return to sender’ address on the back of the envelope should be hand written with an address only. Leave off your name.
- Use a non-standard envelope size. Try an envelope that is smaller than the traditional business DL size.
- Use real stamps on the letter and not a ‘franking machine’ embossing. Real stamps attract the eye and help the readability factor.
- Hand written addresses on your envelopes should be in blue ink. Make sure that your handwriting is clear and legible; it shows respect.
- Do not bulk up the envelope with too much marketing material. A business card is all that you need inside the envelope with your letter to send a professional business message.
- Open rates on envelopes are better between Wednesdays and Fridays. To achieve this delivery focus, send your letters on a Monday.
- If you want your letter to be seen amongst others, pay for priority postage and overnight delivery.
- Always follow up your letters a few days after sending.
- Sign your initials across the envelope flap on the rear of the envelope. It appears like a ‘seal’ to the reader and then adds to the personalisation.
Simple rules like this will help your sales letters reach the required person. More importantly they will help your envelopes get opened and the contents read.
Personalised envelopes and direct letters can be a good part of your marketing campaign to build your prospect list and support your direct prospecting efforts or cold calls.
The commercial real estate industry is based largely on relationships and trust. You can extend and grow those factors in the way you address and send your envelopes to prospects and targets.
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In commercial real estate sales or leasing, every little bit helps when it comes to marketing the property to the target market and local area. A correctly constructed marketing campaign should be 75% focused on the local area and 25% focused on the greater region and beyond. Here are some tips on marketing from our Newsletter for agents.
In just about all property marketing efforts, we find that most enquiries will come from local business owners and local property investors. This is the reason for the bias to local marketing. Sure you may have some properties that are an exception to the rule but almost always it is the local enquiry that really matters
So all of this being said, the advertising effort for any property and listing should be comprehensive and across a number of marketing tools and systems. The days of ‘generic’ advertising and promotion are well gone.
So let’s differentiate marketing between ‘open listings’ and ‘exclusive listings’.
- In the ‘open listing’ situation you have no control on the property or the client. For this reason advertising is largely a matter of convenience. You put a sign on the property and an advert on the internet. Any enquiries that you get you can process in an ordinary way. Importantly you should not waste much of your time on any ‘open listing’. If the client will not trust you with an ‘exclusive’ agency, then understand that your focus should be elsewhere on your better listings.
- ‘Exclusive listings’ are better for the client and for you. If the client is genuine in the sale or lease process, ‘exclusive’ listings allow you to get deeply into promoting the property to the local area. The communication between you and the client is a lot stronger and more relevant to getting results from the marketing campaign. Every ‘exclusive’ listing should include a reasonable amount of vendor paid marketing funds.
When you are to promote a property to the local area, a campaign should be structured on the target market, and personally driven by you as the agent or salesperson. When you get too many listings, the ‘personal’ side of property promotion gets a lot more difficult. The number of ‘exclusive’ listings that you can take on at any one time is about 15 listings. Beyond that number, you need a personal assistant to help you with the required systems and processes. Remember that the client wants to talk with you and not your assistant.
To put high value and relevance into your property promotion, take every listing personally into the area and the business community. Use every listing as a reason to talk to business owners and property investors. In this way you will get better results from all your marketing campaigns.
You can get more free tips like this in our Newsletter for Commercial Real Estate Agents.
Lease administration forms part of the leasing and management services offered to Property Management clients in commercial real estate today. It is a specialised service and has major impact on the property under management.
The real estate agency staff involved in the management and leasing of a commercial or retail property, really do need to know what they are doing when it comes to lease administration. When done well the process will help the landlord client achieve income and tenant benchmarks in the property that would otherwise fall short of expectations.
Why do things in investment properties need to be ‘administered’? The answer is quite simple; the market is constantly changing and expectations of the tenant mix, income, and local area will change. Top agents work ahead of the changes and they know what is going on in all comparable properties.
Here are some factors that you can merge into your lease administration system for your clients.
- Review all leases as a priority. In this way you will know what is coming up with each tenant and occupancy. When you are managing and leasing larger properties, the task is complex. For this reason, any lease review should involve a ‘synopsis’ process where key issues from the document are extracted and noted in an appropriate document and diary system. In this way you can be prepared for the major events well before they happen.
- Check out the rent reviews coming up for each tenant. The market rent reviews will be the hardest to predict and negotiate. Any market rent reviews should be flagged for early attention. You will need some good comparable market rental evidence from the local area and this takes time to locate.
- Options for lease renewal can be a good and a bad thing, depending on the property, the tenant, and the landlord. Leases should have an early window of time where any option that exists can be negotiated and finalised. In high quality shopping centres, the process of giving an option for a further lease term is not desirable; it places far too many limitations on the tenant mix and how the client landlord can work their shop ‘clusters’. As a general rule, any top quality property should not give ‘options’ as a standard offering in any lease negotiation.
- All leases will have factors that need action at some time during the year or the lease term. Typically those things are insurance certificates of currency, rent reviews, options, renovation dates, and make good provisions. Get to know your leases so the critical dates area correctly actioned well in advance.
Attention to detail in lease administration is really important. This means that all actions and correspondence should be correctly recorded and implemented. All of this action should be supported by a good property management and leasing fee.
In commercial real estate today, you must get the pricing and marketing strategy right when it comes to listing the property. Competing properties and economic pressures mean that the rates of enquiry for the average property are less. We as agents must do more with less when it comes to attracting enquiry and converting offers on a property. As part of that process, our clients should be realistic when it comes to listing and marketing their property.
As a general rule, highly priced listings with clients that are beyond the reality current market conditions should be declined. Let some other agent struggle with the listing.
So the pricing of a property is really important. The client will have their own impression of what the property is worth however it is likely to be inflated and not aligned to the market conditions. Here are some rules to help you with the pricing and marketing of your listings.
- All of your listings should be exclusive listings. Open listings are a waste of time as you cannot control the enquiry and stock. Only take on open listings if you want to have the property on your books; in other words you believe you can take some prospects to the property.
- The property type and the market will have some impact on how long you should take on an exclusive listing. Generally speaking, an exclusive listing should be for between 4 and 6 months. If you have not sold or leased it by then, it is likely to be a ‘dead listing’ that should be taken off the market for some time to ‘freshen up’.
- Check out the competing properties in your area before you quote prices on a property to be listed. Understand why those properties are on the market and why they have not sold or leased yet. Do not repeat the mistakes of those other listings.
- New property developments will have an impact on the supply and demand for property locally. The zoning of the property will also have a factor to consider on the listing price structure. Study these factors and determine how they impact your property and the client.
- Review the improvements in the property, together with the services and amenities provided. Are they of relevance to the market today, or do they require upgrade? Degraded or poorly maintained properties should be carefully considered prior to the start of any marketing campaign.
- The price of a property will be impacted by the method of sale, so chose the method of sale that buyers will react to in a positive way. The first 6 weeks of a marketing campaign are really important and you must optimise your enquiry chances.
Look at all of these things together with the factors of location for each listing. The location could have a major impact on your property marketing campaign and pricing structure. A successful property sale is the result of careful planning and the right decisions.
In this property market, retail leasing is quite special. It can be extremely rewarding from a leasing commission perspective, however it does require the right knowledge and the right person to attract the correct levels of business.
Given that the current property market is somewhat frustrating and slow, many retail tenants are quite critical of the properties in which they are located. The relationship between the tenant and the landlord is critical to tenant retention and vacancy minimization.
It is interesting to note that many landlords managing their own properties tend to cut corners when it comes to maintenance within the property. The landlords in that case are too close to the function of the property to make clear and sensible decisions when it comes to property maintenance and property performance. They tend to look at the bottom line before they look at maintaining customer comfort and tenant performance.
A retail property is a careful balance between the landlord, the tenants, and the property manager. In many respects, the interaction has to work very positively.
Here are some skills required of a retail leasing specialist today:
- Get to know the local businesses throughout your region. Visit the competing properties to see what their tenant mix and property profile is doing.
- Market rentals will change from time to time. The pressures of supply and demand will shift the market rental throughout the year. This then says that you need to be very familiar with the current rental trends.
- Incentives for leasing will come and go from the property market based on the levels of enquiry and the amount of vacancy. Lookout for those property developments that could throw imbalance into the property market.
- A good leasing specialist will have an extensive database. Within that database you will have a significant number of local business proprietors, franchise groups, and landlords. Constant contact within those groups will help you identify future leasing needs and opportunities.
- Successful tenant occupancy will occur from a well-chosen tenant placed in a good property and tenancy mix. This then says that the tenant should be well chosen for the property and leasing placement. Every vacancy should be looked at from the larger perspective of the property and the overall tenancy mix.
Retail leasing is a very rewarding part of the industry; that being said, it does require that special effort and knowledge on the part of the individual leasing specialist. You can succeed in this part of the industry through deliberate focus and skillful marketing.
When looking at a commercial property for the first time, it is best to have some form of property analysis report or checklist that can help you cover the required issues relative to the property type and location. Here are some tips from our Agents Newsletter.
When you analyze all of the local property information correctly, it gives you confidence when it comes to the listing pitch and presentation with the client. The client wants specific information and needs to know that you have completely reviewed the property and the opportunities that the property presents to the market today. You know the market better than they do.
Know the commercial property trends
Today we find that the industry is under significant change and the trends are more difficult to pick or plan for. As agents we can understand the market today better than the client. Most clients in your local area desperately need the assistance of a quality commercial real estate agent to help them with their property liquidation or transition.
Every listing pitch or sales presentation with the client has to be of the highest quality and totally relevant to the subject property in every respect. Many competing agents will be chasing the same listing with their own version of a marketing approach and the listing strategy. For this very reason, you need to be at the ‘top of your game’ when it comes to local market information and the listing strategy.
Real Property Analysis
Your thoroughness in the process of property analysis will give the client some significant comfort in considering you as the best agent to list the property. Here are some more ideas to help you with your comprehensive property and marketing report.
- Describe the property and its improvements comprehensively. That will include the age, history, improvements, services and amenities. If any risks exist in the current local area, they will need to be factored into your recommendations and report.
- Tell the client about the current levels of enquiry that exist for that asset and property type today. Reference to your database will help the client understand what is really going on in the market today.
- You need to show the client that you totally understand the strengths and weaknesses that the property brings to the market today. The strengths can be fed into your marketing strategies and recommendations. They will also help you define the target market for the asset. The weaknesses on the other hand will need to be addressed when it comes to property promotion.
- Detail the locational factors that apply to the property and include the details of competing properties that are available in the same location. Check out all of the competing listings to understand their methods of marketing, and the reasons they may be still on the market today. If any errors exist in those other listings, you do not need to repeat them when it comes to your client’s asset.
- When considering a marketing strategy, price, or rental, the factors of income, expenditure, and property outgoings will have an impact on the levels of enquiry that you will get. Consider how these financial factors will be merged into your marketing efforts and what impact they may have.
- Review all the leases in the property to understand the differences between each lease and the impact that each lease has on the income stream for the asset. In many respects, the lease profile and tenancy mix within an asset will have greater impact on the potential enquiry and price. Do some comprehensive research on these factors, before you make your final marketing recommendations to the client.
- Vacancies in a property will be of some concern to most prospective property buyers and will have impact on the marketing program. Similarly some leases or tenants will need to be addressed prior to the commencement of promotion. Provide the client with a leasing solution for any outstanding vacancies.
- The tenancy mix should be reviewed for strengths and weaknesses. Factors of vacancy may need to be resolved prior to the commencement marketing. Outstanding matters of negotiation with current tenants may also need to be resolved prior to the commencement of promotion.
All of these factors lead to some solid recommendations of listing, marketing, inspecting, and negotiating. Let the client see that you really do know how to address the challenges of the current economy, and the challenges of the asset.
You can get more tips for Commercial Real Estate Agents in our Newsletter.