Getting Negotiation Leverage in Commercial Real Estate Agency

In commercial real estate agency each day, we are negotiating with many people across a number of challenging situations.  Our ability to negotiate is a key part of growing market share and improving our commission opportunities.  This then says that we should practice our dialogue and a negotiation skills at every opportunity.

A good negotiator in commercial real estate is one that understands the circumstances, the market, the documentary processes, and the intentions of the parties.  It is sometimes a difficult equation to bring together.  The clients that we serve expect their agents to be experienced and experts when it comes to the negotiation process.

So what are the negotiation stages and situations that we strike?  Here are some of the main ones:

  • The cold calling process is really a negotiation to establish a meeting with a new person.  Your dialogue needs to be exemplary when it comes to communicating and connecting across the telephone.  It is a specific skill that requires regular ongoing practice.  In this way you can build connections with fresh prospects for your pipeline of new business.
  • A cold call can also be something that applies to dropping into a local business to introduce yourself as a property specialist.  The dialogue in that situation is totally different to the telephone process.  This strategy can also reap significant rewards through practice.
  • A sales pitch or presentation with a new prospective client is a negotiation to achieve a listing.  That listing will involve a marketing package, marketing strategy, and listing process.  It is interesting to note that the top agents within the market are very good at converting a new property to an exclusive listing.  Those more ordinary agents in the market usually take the lesser alternative of an open listing.  Unfortunately the ordinary agents struggle with market share as a result of this, and have little control over the deal that could possibly evolve.  The message here is quite clear.  If you want to convert more exclusive listings to grow your market share, then you need to refine your sales pitch and presentation process.  A role playing strategy in your sales team meetings will help.  Personal daily practice will also be necessary.
  • When you find a suitable tenant for a buyer for a property, another negotiation stage will evolve between the parties.  It is wise to remember the requirements and intentions of your client as the negotiation proceeds.  Every stage of a negotiation should be carefully checked and documented.  When you get to the final stages of offer and acceptance, the agreement document between the parties should be legally accurate, comprehensive, and correct.  Some property transactions can be quite complex and for that reason you will need outside assistance to formulate the final document from the offer and acceptance situation.

Given these very common negotiation situations, you can see why dialogue improvement will help you strengthen your market share and commission opportunity in commercial real estate agency.  Practice is required.

How to Take Tenant Enquiries in Commercial Real Estate Agency Today

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.

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Beneficial Local Leads and Opportuntities for Commercial Property Agents

If you keep in contact with the local businesses in your area, you can uncover some significant property opportunity for your commercial real estate agency.  The process of contacting businesses is far easier than chasing down the property owners in your region.  A good prospecting model should involve both processes in balance.

It is the local businesses and the decision makers behind those businesses that can tell you what is going on in their region and their street; they can also tell you what they may be looking for in regard to future property activity.  It is easy to find local businesses, and it is easy to make contact with them.  The business telephone book is a valuable asset to grow your database.

Given that the local businesses are essentially the backbone of property occupancy, part of your database should be deliberately constructed for local business networking and the market intelligence that you gather.  Some of those businesses will be tenants, whilst other businesses will be owner occupiers.  Either way, there are property needs and challenges from time to time that they will need help with.

You can approach local business proprietors in two different ways.

  1. You can cold call them as part of your prospecting model on a daily basis.  This process is quite successful and worthwhile merging into your networking program.  Contacting 40 businesses a day is quite easy when you use the business telephone book.
  2. You can personally canvass the business streets and business locations as part of a ‘drop-in’ prospecting activity.  Getting your face in front of business proprietors in this way will help you gather significant market intelligence.

It should also be said that any significant property with multiple tenants will be a good opportunity for new business prospecting.  Many top commercial real estate agents will pick a large CBD building with multiple tenants and work through the list of tenants until they know what every tenant requires by way of occupancy and when their lease expires.  The direct approach works just about every time.

Many business owners and corporations do not have the experience or the expertise when it comes to commercial or retail property investigation and relocation.  For this very reason, they require local market assistance; you can be the source of this very valuable market intelligence.  Special property services may also be required such as tenant advocacy, or buyer’s agent.

Businesses and larger corporations will generally utilize these specialized services with the right agency.  They then become your client and will be paying your commission.  It is perhaps the reverse process to the normal sale or lease transaction, however it is quite productive and rewarding from an agency perspective.  You simply need to change your perspective on the transaction to help the business owner or corporation find the right property locally with the correct improvements.

The way to make this process work is to establish an initial base of contact with the right decision makers in every local business.  Over time, you can reconnect with these people and encourage a meeting at the right time.  Trust and information will help you open the door on future property requirements.  It may take three or four telephone calls every couple of months before you get to the right decision maker with a face to face meeting.

These business owners and business managers will appreciate local market intelligence and feedback when it comes to property rentals, property availability, and property prices.  As a strategy in connecting with these people, you can create a single page brochure that you can leave with them detailing the recent property activity and results.