The marketing process in commercial real estate brokerage should never be ‘generic’ with perhaps one exception and that is in the promotion of ‘open’ listings. ‘Open’ listings generally waste everyone’s time, and will usually only sell or lease through some factor of ‘luck’. You can’t base your commercial real estate brokerage business on ‘luck’.
How Are Listings for You?
Some agents and brokers will claim that they must list ‘openly’ because ‘that is the way the market is for them’ and the only way they can get new listings. Whilst I accept that fact initially for those agents that are very new to the industry, I will say that the best agents avoid ‘open listings’. They grow their profile and market share consistently over time so that the new clients and prospects locally will come to them to list properties for sale and lease. That is when it is really easy to demand ‘exclusivity’.
If the client really wants the best agent then they must accept the terms of engagement that the agent is offering. They are then your terms! Are you ready to package your professionalism and sell it?
Are You the Expert?
If you have a comprehensive and specialised personal brand as a local property ‘expert’, then it stands to reason that people will want to list their property with you rather than some other ‘random’ agent or groups of agents. Take a serious look at your personal marketing processes.
Taking this point further, your market share and listing conversions of an exclusive nature will largely depend on your ability to establish your brand as the ‘go to agent’ for your location and property speciality. You can and should invest more time in building your real estate image and speciality.
Here are some rules to help you do that:
- Your Listings – Understanding the point that I made earlier about ‘exclusivity’, make the marketing process very special and deep with all of those high quality listings that you are bringing in. It is difficult for other property owners and investors to ignore the activities of any agent with the best properties and the best marketing ideas.
- Other Agent Listings – If you are stuck for current listing stock, use other agent’s listings in a location to talk to local property owners and tenants nearby to any listing. Some simple questions and conversations will help you find the next listing in the same street or perhaps a business owner looking to relocate.
- High end marketing campaigns – Get some traction with your marketing by seeking and converting vendor paid funds. If your advertising efforts on any quality property are of a higher professional level than that of your competitors, you should be attracting the new business leads and enquiries very easily.
- The personal approach – You are the marketer of your business. You sell your services well then people will choose the agent that they trust and believe has the better business and market coverage. Is that you?
Simple marketing rules like these help you consolidate market share and listings as an agent or broker in commercial real estate. Follow the rules and grow your real estate business.
You can get more commercial real estate brokerage marketing tips in our ‘Snapshot’ eCourse right here.
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.
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.
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.
In commercial real estate today, every service that you offer should have specific value related strategies. It doesn’t really matter whether you sell, lease, or manage commercial real estate, but it does matter that you understand the valuable outcomes that you provide to the clients that you serve.
Every person in your agency should understand the values that are provided by your agency and business. In this way every sales pitch and presentation can be improved and optimized. Consistency in your message is really important.
To win a listing in today’s property market, your services are to be of the highest value and of great relevance to the client. The generic approach in commercial real estate will give you poor results. There is no point in being like every other agent.
Why are you the best agent in the local area? It’s an interesting question. When you know the answer, it will be very easy for you to pitch and sell your services in sales, leasing, or property management. Top agents know how to do this and you should also understand the process.
When you look at the differences in service that can be provided, you can see specific values that are real and relevant to the clients that you act for today. Here are some cases in point.
Commercial Real Estate Sales
- The ability to tap into some comprehensive database that is real and up to date. That database will help you minimise time on market and create property inspections conveniently and effectively.
- The right methods of sale to attract the appropriate enquiry in today’s market. The method of sale should be relevant to the property type and the levels of current property enquiry. The ways in which you take a property to the market will send a message to the local property investors and business owners.
- The marketing systems that can help spread the message into the target audience for the particular property. Those marketing systems should be specific and not generic. They should reach the target audience effectively and comprehensively over a well-directed marketing campaign.
Commercial Real Estate Leasing
- A comprehensive list of all the business owners and business proprietors through the local area. That list could be updated continually to ensure that you know when those businesses need to expand, contract, or relocate into other premises.
- Tenant advocacy services that can help tenants to find the right properties in the right location. Tenant advocacy is quite a specialised service and it requires the services of a highly experienced leasing professional. They understand the lease strategies, rental types, and occupancy costs. They know how to put good leases together and can serve their tenants well. That being said, the tenant in such situation is the client.
Commercial Real Estate Property Management
- Commercial property management is quite a specific service and should not be undertaken in your agency unless you have the right people. A good property management service will include income control, expenditure management, risk management, property compliance, maintenance strategies, lease documentation, and tenancy mix management. Make sure that you have at least one highly experienced commercial property manager on your team that knows what to do and how to do it. They can then train other more junior people that come through the ranks.
- Retail property management is distinctly different than commercial property management and to a large degree is more intense. In retail property and with shopping centres, you will find that the intensity of management service is higher and therefore the fees are higher. You need the right people that have experience in managing shopping centres with large numbers of tenants. The fact of the matter is that a good retail property manager will help build your business due to the experience and relevance they apply to the properties that they manage.
So these are some points of difference that can be built on. Specialisation in the industry will always give you leverage. Make sure that your people provide the specialisation that your clients need and then send that message out into the market at every opportunity.
Finding tenants for your vacant buildings can be a real challenge. The fact of the matter is that most new tenants will come from the businesses in your local area. On that basis the direct personal approach to businesses tends to work more than anything else.
To be successful in commercial real estate leasing it is best to focus on the local business community and the movements that come from there. The best marketing approach for any vacant tenancy or leasing project should be biased towards the local area. This then says that the best marketing campaign can be structured around some of the following local strategies:
- Determine the ideal target market that best suits the property
- Get a signboard on to the property as soon as possible
- Personally canvass it of the businesses in the immediate location
- Circulate simple brochures into the business postal delivery service
- Review your database for any previous leasing enquiries that may not have been satisfied
- Identify the best buildings in the general precinct that may have tenant volatility. Approach the tenants in the building to see if they are looking to move.
The leasing process will always be far more successful when you orientate it towards local businesses and local properties. Your database should contain several hundred local businesses and decision makers for those businesses.
Approaching local businesses
When it comes to the occupancy of a property, local businesses tend to maintain a local focus so that they do not lose their customer base in any property changeover. The fact of the matter is that they want comfortable occupancy at a reasonable rental.
In approaching the local businesses, the following questions and strategies will help you in gathering the right facts and building on the correct opportunities.
- Are they a tenant in occupancy or do they own the property?
- If they are the tenant, ask them some questions regarding the current lease. Most particularly the expiry date of the lease will be of great value to you, and any renewal intentions that they may have.
- Are they under any pressure to expand or contract leased area at the moment? Some businesses simply outgrow their property for one reason or another.
- What can the tenants tell you about their landlord? The detail that you get here could be useful in the future when it comes to looking for commercial properties to sell.
- What does the local business owner think about the local area from a leasing and business angle? Are they aware of any businesses that may be seeking change?
Simple questions like these can help you build a great database of future opportunity in leasing premises locally. Take action today and get out into the local business community. Make them part of your prospecting model.
In commercial real estate, you need a prospecting model if you want to be successful. It is a very simple message and fact, but very complex task to initiate for some (although it does not need to be so). The sooner you develop the process, the quicker you will get results in commissions and listings.
In any commercial real estate team, it is easy to see the difference between the agents that regularly prospect and those that don’t. The difference will be in quality of listing stock, and conversions to closed transactions.
Establish Your Prospecting Process
The prospecting process is unique to you yourself as an individual and property specialist, and your territory with its property types and property investors. To get your system going, it is necessary to establish some rules relative to the local area and the property types. First and foremost, you should understand the following factors:
- Set some boundaries relating to the primary area of focus in your region. You cannot be an agent for everybody and cover every location. The commercial property market is just so specialized that the knowledge required across different areas will be difficult to achieve and maintain. It is better for you to become an area specialist and perhaps even a property specialist within the area.
- With all of the available property types locally, determine the property types that will be of high demand into the future. There is no point in you specialising in something that has little activity or reducing market share.
- Get to know the history of property sales and leasing activity throughout your local region. The historic trends in property sales, rental returns, business demographics, and population growth will influence the future of your commercial real estate market. Ensure that your market has the expansion and churn factors that you require for property change over, sales, and rental. The history of property activity is in fact a timeline. The time line will show you where the opportunity will arise over coming months and years.
Within any local area, you will find groups of prospects that offer real commercial real estate opportunity on a regular basis. Getting closer to those groups will help you with further listings and further inquiry.
Most particularly the top priority groups that will feed you with listings include the following:
- Franchise business groups seeking new property positions as part of their business model will always be on the lookout for good property locations. Every franchise group will have unique requirements of property selection and occupancy. For this very reason, approach them individually and get to know their selection process and terms of acquisition. When it comes to leasing, they will usually have a standard form of lease to support their franchise business model. They will also have particular requirements of demographics relative to the local area, the population, and exposure.
- Solicitors with clients that have property challenges or needs will need your help. Whilst solicitors may know how to transact property, they usually need assistance when it comes to liquidating a property or acquiring a new one. Local market knowledge will help them greatly with this process, and you can be the source of that experience when it comes to the local property market.
- Accountants with clients and property investors that require property solutions are a always out there looking for specialised property assistance and local market knowledge. This is where you can be of high value to them as they work to resolve their client’s property problems.
Every existing property listing is an opportunity to talk to other property owners and business proprietors. In this way you can expand your market intelligence and relevance as a property specialist.