When it comes to marketing a commercial property today for sale or for lease, it is important that the marketing campaign captures the target audience in the right way. Far too many properties are advertised generically. The end result is little enquiry and fewer inspections. When you work as a commercial property agent on commission, every listing that you take to market has to be optimized.
The property market is tough enough without the wrong decisions being made regards advertising and marketing. Here is a checklist to help you through the process as an agent promoting the property.
- Inspect the property so you know what the attributes are that can impact the campaign. List the features and the problems in the property; both of these will impact the way in which you take people into and around the property as part of the inspection process.
- Create an inspection strategy that allows you to show the property in the right respect. As part of that inspection preparation you can have available a ‘property handout’ with fuller details of the features of the improvements and location.
- You may identify a list of presentational things that should be done by the property owner in and around the property before the campaign starts. Cost of remedial and presentational repairs will be a factor of consideration prior to the marketing campaign starting. In some cases you will have limited enquiry coming to you from any marketing effort, and for that reason all ‘hurdles’ and ‘obstacles’ should be removed from the inspection process. In this way you can optimize the potential negotiations that will occur.
- Review the other properties that are for sale or lease in the area. They will have impact on the strategy of promotion and pricing that you adopt. Identify why those properties are still on the market today and consider just how they can impact your property price or rent. Will your listed property offer more or less advantages and improvements than these other properties?
- Define the target audience that all of your marketing should be directed towards for the particular property. In this way you will know how to draft the advertisements and time the campaign.
- From the definition of the target audience you will know just what improvements will be attractive as you arrange inspections of the property. This will also help in the qualification process that applies in all enquiries that come to you.
To correctly market a property for sale or lease today it takes real effort and skill. Professional and experienced agents know how to do this well. The effort that is required to correctly market a property will be influenced by the type of listing taken and the availability of vendor paid marketing funds.
Open property listings are a real waste of time and should not take a lot of your marketing effort; certainly if you can see a deal to be made with an ‘open listing’ then move towards it, however most property owners that give you an ‘open listing’ cannot to be trusted to fully disclose and cooperate as you proceed through any negotiations with qualified parties. More often than not they are working with a number of agents and taking comments from all; this can derail or frustrate your specific property promotion and negotiation.
With all of these things being said, many properties can be promoted directly to the qualified tenants and buyers in your database. All property campaigns should include an element of direct marketing. Each listing will help you expand your market intelligence and database. Every property listing will give you an excuse to talk to local business owners and property investors.
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In today’s property market, your current tenants in your tenancy mix are important to the future of the property. When you create a tenant retention plan, you can optimise the income potential for the property. That being said, a tenant retention program should be part of a professional property management and leasing service provided to landlords by agents. Good commercial property agencies provide this specialised service.
It should be said that tenant retention is not just about lifting the rent for the landlord; in fact, that is probably the wrong strategy to adopt in your plan. It is better to have a few priorities in balance so your retention plan forms a key part of the business plan for the property.
In particular, a good retention plan should include the following as goals:
- Stabilise and minimise the vacancy factor
- Create a group of prospective tenants for the vacancies in the property if and when they arise
- Support the tenant mix so that tenants can occupy in comfort and build their businesses
- Control occupancy costs for the landlord and the tenants within realistic benchmarks
- Underpin the market rental for the property which in turn can support sustained property values for the landlord
- Allow for tenant movements and property refurbishment strategies in parts of the property as planned at the beginning of the business or financial year
- Help keep tenants in occupancy for the long term and in balance with the landlords investment requirements
It should be said that a retention plan is highly important in retail property given that the stability of the tenant mix is required to keep customers coming to the property on a regular basis. Any vacancy in a property is quickly seen and will detract from the image that a successful retail property needs to set.
So how can you establish a plan of this type? Here are a few ideas to help you get started:
- Understand the supply and demand for tenancy space in the local area today. As part of that process get to know what new property developments are coming up that will impact the available space ratio.
- Consider your property as it is today and determine what refurbishment and relocation issues should be merged into your retention plan.
- Split your tenancies into high value tenants and low value tenants when it comes to the future of the property. Some of your tenants you cannot do without and everything must be done to encourage them to stay in a property.
- Anchor tenants will normally be secured on long leases. The instability or change of an anchor tenant can impact all speciality tenants in a major way. Find out when the anchor tenant lease expires and just what the anchor tenant thinks about the property today. Do they intend to stay in the property? When does their lease expire? Can they do more to work in with the other tenants in the specialty areas?
- What levels of trade exist in the retail property and what tenant types are more successful than others? This information will help you find new tenants that suit the customer needs in the property shopping centre or retail property.
- Is your property servicing a particular need? In retail property this could mean ‘convenience’ or ‘destination’ shopping. When you know what works in a property, you can do something more with it.
- Common area use will have impact on special property precincts such as ‘food courts’ and just how customers move through the property. Take a survey of those factors and form and opinion as to how successful they are now. Changes may be required to help in tenant sales and retention.
- Look at all the leases in the property and identify any leases that have market rent reviews, options, or expiry dates in the next 2 years. Those tenants or leases will be a major focus of your retention plan.
You can add to this list based on your property and the overall location. Importantly you should create a tenant retention plan that can help improve the performance of any property in any market. That is why you were engaged by the client in the first place; correct?
In commercial real estate agency it is easy to get distracted on things that will do nothing for your business or market share. In many respects, the easiest way forward is not the best way. Consistent action is required every day to build your market share in commercial real estate sales and leasing. In that way you can proceed and grow the listing and commission opportunity as an agent.
The top agents of the industry work to a system or a plan. They know the things that are required to help them move ahead. They do those things every day. It is the system that is taking them forward.
You hear so many wise and experienced salespeople in the industry say that nothing happens until you take action; they would be right, it is however the right action that is required so you can build your market. You will know your market and the changes that are underway; those changes will give you priorities in action and focus.
Look for the Changes
Every month and every year the property market changes with respect to property enquiry, time on market, and listing quality. Staying ahead of those changes will help you match the right actions to the market that exists. So what can you do? Try some of these:
- Building your new business prospects just has to be number one on your diary of activity as a commercial real estate agent. When you do this you will find that the market will offer lots of opportunity.
- Keep track of new property developments so you can watch the balance of supply and demand that may have impact on your property type or in your territory.
- Keeping your listings moving ahead at all times. Exclusive listings are really important in this process. Open listings are basically a waste of time unless you know that you have a buyer or tenant available now or soon.
- Connecting with Clients has to continue in all markets and at all times. A good database will help you do just that. How many prospects and clients should you have in your database that you regard as high value and active? The answer is about 300. It takes time to build those numbers but the process works. You may have more contacts than that now, however the number of 300 relates to the key people that you believe that may have momentum and want some property help in the future.
- Work to a system of prospecting and cold calling on a regular daily basis. Each day a call system will create new meetings if you call enough people. So how many people should you call each day? The answer is about 40. You will not get through to 40 people but you should get through to at least 15 people and of those you should be able to get at least one meeting with some opportunity.
Set clear targets for listings, prospecting, meetings, and contracts or leases. Use a database to capture all of your contacts and meetings on a daily basis.
When it comes to building your business as a commercial real estate agent, you will frequently be pitching and presenting for property listings against other agents in your local area. Most property owners will seek presentations from four or five agencies as part of the preparation for listing their property. In most cases, you will only have a short opportunity to connect with the property owner and present your strategies of marketing, selling and or leasing.
This then says that the presentation and pitch process that you utilize with your listings is really important. Many agents tend to provide discounts as part of the enticement process for attracting the new listing. Whilst this may seem somewhat sensible to attract the business, the reality is that any short cuts and discounts will have an impact on your marketing program and your income. It should also be said that discounting commission is not a sensible idea in this property market when hard work it required to convert the average deal and get it across the line.
Here are some tips to help your sales pitch and presentation process in commercial real estate agency.
- Be prepared to show the client some real and valuable points of difference in your service. Most agents use only generic comments such as good staff, knowledge, market share, and duration in the market. When it comes to pitching and presenting, these generic comments have little value in converting the listing. Your points of difference need to be real and specific to the needs of the client. This then says that any presentational process should be well planned and optimized for the property and client in question.
- Visit the property before hand, and take approximately 50 photographs of the property and the surrounding area. These photographs can be used digitally on a laptop computer or iPad as part of the property presentation. It is surprising how powerful a simple running photo-slide show of random photographs can be in a property presentation. The client will always show interest in their property and that is what the photographs relate to. Forget about using anything else on the computer, the client will only relate to their property and that is why you use property photographs.
- The best property presentation is a conversation or connection with the client on a number of levels. It is best to bring together all of the senses as part of the property presentation. That will mean visual, sound, and touch. To achieve this, you have your laptop computer loaded with property images, you have your verbal presentation with points of difference, and you have a property proposal to provide to the client for review (keep it short and to the point).
- Engagement is really important when it comes to the sales pitch or presentation. Engagement means connection and conversation. The top agents of the industry know how to engage and converse in a meaningful way. Local property knowledge and market trends will help you do this. Tell the client what the inquiry is doing, and what people are looking for. Demand an exclusive listing; do not take an open listing on the clients terms.
- Every property listing will involve both a strategy, and a marketing campaign. Both of these should be specifically designed for the subject property and quite unique given the trends of the local property market. In this way you can help the client see how you will attract the correct levels of inquiry from the selected target market. When the client believes that you are the best solution for their property challenge, it will be easier to convert the listing on an exclusive basis.
Over time you can improve your presentational processes through practice and the development of specific marketing tools. On average, the top agents of the industry tend to win more listings per property presentation. They do it because they can connect to the client more professionally than the competitors. It is a simple process, however it does require practice.
In commercial and retail property, a top leasing agent will make a lot of commissions. That is because they specialise. They know the local businesses that are looking to move over the coming years and they work towards putting the right deals together.
In reality, landlords need the top leasing agents to help them that really understand the local area. Those top agents will have their market covered in a comprehensive database of tenant movement, lease strategies, rent alternatives, and marketing ideas. Finding the right tenant for the right property is a real skill.
Landlords do not need an agent that just knows how to lease. Anyone can put a sign on a property and list it on the internet. When you are a ‘top agent’ you will have the market coming to you because of that intense and relevant market knowledge. You will also know who are soon to be moving and for what reason. Market intelligence is invaluable in our market today as businesses change location and seek better leasing deals.
These are the skills and knowledge factors of a top leasing agent today:
- They have a comprehensive awareness of what all the local tenants are doing in their current leases. They know when those leases will expire and will work towards helping those tenants in the last year of their lease to find something of better value or relevance to the business.
- They know where the successful businesses are that will need property change. They look for tenants in pressured occupation. Expansion or contraction factors are major triggers when it comes to property leasing.
- Top agents know the landlords of the area and the best properties that create the major interest. When you can relate to those properties and the existing tenant mix, you will soon see property change and opportunity in each.
- Rentals will change from property to property and location to location. To a great degree, the rentals in any location are driven by the rate of tenant enquiry and the supply and demand for leasing space. As part of that equation it is wise to keep a close eye on the upcoming property developments in the local area. It takes about 2 years from approval to completion when it comes to getting a new investment property established. That being said, the property developer will be offering some very real incentives to attract tenants even before the property comes out of the ground.
- Lease terms and conditions are sometimes standard to a property or landlord, but they will also be influenced by the rate and type of local property enquiry. A lease that is offered for a vacant space should be matched to the prevailing market conditions and current lease enquiry. You may need to create incentives to attract that lease enquiry.
- Franchise tenants are a good source of lease enquiry. Top agents work the franchise groups to find the right properties that suit them. Those franchise groups will have a priority in location and lease terms. Get to know what the franchise groups want.
To be the best leasing agent, you can dominate your market when you know what the tenants, the landlords, and the properties are doing. Isn’t that what we should do anyway?
When you have a vacancy or a pending vacancy in a commercial or retail property, you need to target the right tenant to fill that vacancy. This then suggests that not all tenants will be suitable for a given property, and that observation is correct and real.
Commercial property agents should know exactly what the right tenant would be for a given vacant area in any property; and then they should know how to find that targeted tenant. Top agents do this all the time. These top agents are in touch with the movements in the local area and business community.
- How much do you know about the local business community and its leasing pressures and leasing future?
- Do you know what tenants are looking for today when it comes to new property movements and where they are moving to?
- Are you in touch with lots of tenants as part of the prospecting model that you use?
So what does an ‘ideal tenant’ look like in your property location? To a degree the question is answered with the following factors in mind:
- The needs of the local business community
- The prevailing tenant mix
- Business sentiment and volatility
- Supply and demand for new and older lettable space
- The growth of the surrounding population
- The business base and profile of the local area
In any investment property location and area, there will be ‘seasons’ and ‘peaks’ of property enquiry in any given year. In most ‘years’ the leasing market is active for just 10 months, allowing for seasonal holidays, climatic conditions, and property availability. For this very reason it pays to work well in advance with known property vacancies and leasing requirements.
An ‘ideal tenant’ will vary from property to property but many of the following factors could be on the list of ‘tenant requirements’ from a landlord perspective.
- A stable business that brings brand and identity to the property
- A tenant that integrates into the property existing tenant mix well
- Lease terms and conditions that strengthen the property rental income over the lease term
- A solid and secure market rental that underpins the value of the property for the landlord
- Tenancy design and layout that gives a good image to the property
Does such a tenant exist? Yes is the basic answer, and to find them you should make contact with all of the businesses in the local area on a regular basis. Over time you will find the good tenants, and those that want to move to other quality properties. Most businesses stay within the same general location when they relocate, so they can take their customer base from property to property.
In retail shopping centre leasing, every tenant shop and every property vacancy should be leased to a plan. That plan is your tenant mix strategy. All good retail properties and shopping centres all have a base plan of this nature. They know what tenant they want in what location, and over the years they shape the property performance and rental return in this way. It is called tenant optimisation and forms part of the ‘tenant retention plan’ for the property.
The tenant mix plan should be part of the retail property business plan and that should be updated annually. Plans of this nature help you steer the property performance for the landlord. A plan of this type is even more important today as some retailers suffer the pressures of the internet and a shift in sales to online.
A good tenant mix formula for a retail property will involve a number of key factors that underpin the landlords leasing decisions. Here are some tips to help you structure a good tenant plan for your retail property today.
- Understand your base property and its position in the eyes of the existing customers. Why do they come to the property today? What would they like to see changed in the property and why? How often do they come to the property now and on what days of the week? Questions like this will help you formulate a leasing plan.
- Shoppers want convenience and a correct retail offering to suit their buying needs. Convenience means many things when it comes to a retail property however one thing that is high on the agenda for most shopping centres is the car park. Shoppers need to feel safe and comfortable in using the car park. It is perhaps the one main thing that can influence future sales and trade for the tenants. Make your car park easy to use and access. That will include the entrance and exit points to and from the car park and into the surrounding main roads.
- You are likely to have an anchor tenant in your property. Perhaps you have more than one anchor tenant. Stay close to these tenants as they will have a good feel for customer buying patterns and current levels of sales. They will bring customers to the property, and they should help the trading levels of the specialty tenants in the property.
- Look at your entrance ways to the property and the shopping mall. What tenants do you have at the entrance ways and are they the right tenants for those locations? Generally speaking you should have smaller tenants at the entrances to create impulse buying.
- Some entrances to the property will be more active than others. Look at the relationships to public transport drop off points and taxis outside those entrance ways. The entrance points to the property create customer movement patterns and places where people will congregate.
- Ensure that the common areas in the property provide comfort and satisfy the needs of the customers and shoppers. Do everything you can to get the customer to spend longer times in the property for shopping and browsing.
To review your property tenant mix, you really should adjust your vision to that of the customer. Take a trip to the property at various times of the week and experience the retail shopping centre from the customer perspective.
Make notes of the things that you see and how the property functions for the tenants and the customers on each day of the week. What are the pressure times when it comes to property use and shopper visits?
In commercial real estate you should be telephoning lots of people every day. The cold calling process is the way to do that. In a way, your success in cold calling is a numbers game. You track your numbers and in that way you will know what is working for you and what is not. So what numbers should you track?
You track the numbers that can tell you how you are progressing. One secret in the whole process is to make calls at the same time every day. Over time you will know if that is the best time to find the people that you need to talk to. If it is not the right time frame, then you shift your call time slot to make things work. Systems are really important when it comes to getting your prospecting model to work for you.
Here are some of the main numbers that are really important to getting momentum in the commercial real estate prospecting process.
- The numbers of outbound calls to new people are the base to work with and from. At least 50% of your outbound calls should be to new people that you have not spoken with before. In that way you will build some momentum of new business growth.
- After some time you will have a list of people that you must call back because in the last conversation they indicated that they had a future interest in what you wanted to talk about. So the balance of your call time each day (the other 50%) should be devoted to follow-up calls with previous contacts.
- In 2 hours of call contact you should be making 50 outbound calls. In that time you will not get through to all those people, but you should get through to at least 15 to 20.
- Call results should be recorded in a database when you find people of relevance. Do not waste time in capturing unnecessary information. Only enter the information that can be something for you.
- Of the people that you talk to some will move to meetings with you. As you gain skill and momentum in cold calling, you should be getting 2 meetings per day from your call contacts.
- From the meetings that you have every week with these people, at least one transaction or listing should occur.
- When you have established a relationship and a listing from the call contact process, it is a matter of tracking the time on market for the listings and the conversions to sales or leases as the case may be.
So I go back to my point, when you track the numbers you will know how you are improving, and that is what commercial real estate prospecting is all about. Good hunting!
When it comes to making cold calls in commercial real estate, you need some form of checklist to help you with progressing the conversation in a relevant way. Most of the people that you call will have no interest or need when it comes to property sales or property leasing.
However some other people do have a need, and on that basis you should have a questioning process to help you move towards a meeting with these qualified people. Systemise everything when it comes to a cold calling model in your commercial real estate business.
Here are some rules to help you establish a checklist in the cold calling prospect process.
- The best way to get a cold calling system up and running is to start from an initial base of telephone numbers in the business telephone book. The local businesses will have some relationship to property either as a tenant or as a property owner. On that basis they become targets for information and ongoing contact.
- In most cities and towns, you will have a significant group of local businesses that can be fed into this call contact system. When you initially approach them it is simply a matter of understanding if they have a need or an interest when it comes to commercial property. They will be requiring the services of an experienced property agent at some stage in the future. Your job is to identify if that need is sooner or later.
- It is very hard to pitch your services across the telephone. It is far more effective to strike a conversation, arrange a meeting and establish the personal contact. Commercial real estate is quite complex when it comes to leasing sales and property management. On that basis, your priority in making calls should always be to establish a meeting first and foremost.
- As part of the call contact process, ensure that you have a good database to use in capturing the information identified and found. That database should categorise people into suspects, prospects, and clients. It should also categorise people into business owners, property owners, tenants, and property developers. Take control of your information with these categories.
The checklist process in making direct calls to businesses and property related people should have due regard to your local area. There are certain things in your local area that will be important to property owners and business proprietors. Here are some ideas that can be added to your contacting system and questioning process:
- Are they a tenant in the location?
- Do they own the property for the business?
- Are they aware of other property changes locally?
- Do they have needs of expansion or contraction for the business?
- Is relocation something that would help them?
- When do they consider property change?
All of this information will help you with the valuable market intelligence that you require. Over time your database can become a significant point of difference and advantage in building your commercial real estate market share.
When you work in commercial real estate, you really do need a top prospecting model to help you grab market share. The faster that you do this the better it will be for your career.
The most successful top agents, still prospect every day to keep the pipeline of opportunity pointed in their direction. If you are struggling with listings, now is the time to look at your prospecting system and refine it to something that is strong, and results driven.
I like to think of prospecting and cold calling as a ‘jet powered’ process. It is a bit like preparing for an overseas trip on a large airliner. You do all of the preparation work, you then turn up at the airport; you take your seat on the plane and then prepare for the ‘push in your back’. The engines build to maximum thrust and then you power down the runway.
The analogy really works when you look at commercial real estate sales and leasing. The preparation work has to be done; without that preparation you will not take off, it’s that simple.
Some agents are still sitting on the ‘runway’ when it comes time to turn on the ‘engines’, and some have returned to the terminal. Perhaps they have thought that a more local destination may be more realistic in a taxi! Perhaps they decide to walk home!
In this industry you get back that which you put in. The results and the market share are out there to be grabbed by those salespeople that ‘push’ themselves. Develop that ‘thrust’ when it comes to moving forward.
Experience says that prospecting will take you forward in a major way in commercial real estate. Every salesperson in any location should have a prospecting model that works for them. It will be a combination of a few different things that they do quite successfully every day.
Here are some tips to help your prospecting model:
- Devote 2 hours each day to prospecting. In the first instance this can be done on the telephone as part of a systemised cold calling process. The calls produce the meetings and that’s the way to make it all happen.
- Make your prospecting a daily event that you track in numbers of calls out, meetings, listings, and inspections. Every number that you track will help you move ahead.
- Expect that some of the things that you do will be ‘dead ends’, and that is just fine. Learn from the things that did not work for you and find those things that do work for you. Importantly you should be taking forward steps every day.
If you need more listings or you want some more commissions, now is the time to look at your business and prospecting model. If you are not getting your ‘fair share’, then the answer lies ‘within. When you adjust your systems and processes you will find better outcomes are possible.