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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Today it is a fact that email newsletters are a part of commercial real estate marketing. Every agency should have a solid system of client or prospect contact using a database and an email newsletter.
Permission marketing is part of the email process in that you should only send these emails to people that have agreed to be part of the process. You can easily get ‘permission’ through refined strategies when talking to clients and prospects. That will be in:
- Telephone calls
- Property inspections
- Previous marketing efforts with other listings
It should also be said that the email system you adopt should have an opt-out provision and capability so that any person can step out of the newsletter system if they require.
What do you want to do?
If you are going to create a newsletter in this form, it is essential to develop the right strategy and processes. There are just too many poor quality email newsletters sent today. Relevance is everything.
So let’s look at how you can improve the process and make it a valuable part of your marketing effort.
- Use an auto responder to send the emails and track the open rate. You will then see what articles or properties create more interest.
- Many agents struggle with the issue of frequency in sending the newsletters. At a minimum they should be sent every 2 weeks. In an ideal situation they should be sent every 7 days with meaningful and new market information and listing detail.
- The best time to send the newsletter is between Wednesday and Friday. The ‘open rates’ on emails are generally higher at that time. Publish on time every time. Get a pattern to sending your emails.
- It is easy to get an email template established to start your newsletter. You simple add content inside the shell of the email
- Add to the value of the contact process by providing quality professional photographic images of properties for sale or for lease. Think and display quality at all times in your newsletter. One poorly photographed property will detract from the entire newsletter.
- Your exclusive listings should be marketed in your newsletter. Open listings should not get the newsletter treatment (open listings are a process of luck). If the owner of a property did not trust you enough to give you an exclusive listing, then they do not get the quality marketing processes.
- Have property relevant information in your newsletter that tells the reader about the local commercial real estate market and any changes that are coming up. At the top of the email, have an editorial area for this process. As agent you should write the commentary of 3 or 4 paragraphs and include a photograph of yourself in the process. You are building your ‘brand’ remember, and a photograph will help with that.
- All of your newsletters should feature links to your website listings, your informational blog, and your social media channels (Twitter, LinkedIn, and Facebook). Make it easy for people to follow you.
- Each email newsletter sent should be about 6 properties in depth, plus an editorial. If you work on different property types, you may like to make the newsletter specialised to the property type (eg Retail, Industrial, or Office).
When it comes to marketing yourself and your listings today, these are critical issues to take your listings and your real estate business forward.
You can get more tips like this in our free Newsletter for Commercial Real Estate Agents.
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.
Leasing commercial property is a special process. When you understand the elements of the process, you can improve your listing conversions and lease negotiation outcomes. Here are some tips from our Newsletter.
So the landlord of a property approaches you to see if you can help in leasing their vacant tenancy. The inexperienced agents immediately accept the request with little further thought. Top agents ask quite a few questions and get the right market information before proceeding.
Here are some tips on how to lease commercial property today:
- Get the facts about the property location and the landlord. Check out the ownership detail on the title before proceeding.
- Inspect the property to review the improvements in the vacant area or tenancy. Also look at the services and amenities that are available for the tenants that take up a lease.
- Get professional photos taken of the property so you have something to use in the marketing campaign.
- Get physical details about the tenancy and make sure you get some plans to review. The best plans to get a copy of are the ‘as built drawings’. They will be helpful to the leasing process and tenant layout when you find a tenant.
- Identify what landlord works should be done in the property before it is released to the market. Presentation is really important today.
- Check out the comparable properties that have not leased in the local area. What rents are being asked in those properties and how will they impact your property? What can you do that is better and different?
- What are the market rents that apply to a lease of that property type today? Give due regard to gross rents, net rents, and outgoings that will all need to be set before the marketing process for the property commences.
- Should the landlord offer an incentive to get a new lease going in the property? If that is the case, do your homework on the size and type of incentives that are available in the property market today and with that property type. Any incentive that is provided should be ‘paid back’ over the duration of the lease term. It is your job as agent to know how to amortise the incentive back into the lease and the rent structure to get the landlord back the initial cost of the incentive.
- Establish a marketing campaign that is based on the target market for the property. Get the landlord paid advertising funds to cover for all the promotion of the property.
- Get an exclusive listing of the property so you can devote extensive effort to marketing.
- Draft advertising for the property and get it approved by the landlord before you proceed with the marketing.
- When the property is released for marketing, take details of the property to all the local businesses and property owners. This is a personal thing and should occur on a business and door by door basis.
- When you start getting the enquiry from your marketing of the vacant tenancy, qualify the enquiry before you take people to the property.
Leasing a commercial property is not hard; it is just a specific process that should be exclusively handled by each agent. It this way you will get better enquiry.
You can get more tips like this in our Newsletter.
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.
When it comes to commercial or retail property management today, the income for the property should be optimised given the particular property, the landlord, the property market, and the financiers. In saying that, income in a commercial property is a number of things, all of which require careful strategy and planning.
Here is a list to help you understand some of that income:
- Rent paid by the tenants in the property and under the terms of the lease. That rent will be for occupied premises or ‘demised premises’ as outlined in a lease document.
- Outgoings recovery from the tenants under the leases and given the types of rent paid in the property (gross or net).
- Extra rental for special factors such as car parking, antennas on the roof, storage areas, signage, or licenced areas external to the lease.
- Net income will be impacted by the expenditure in the property. For this reason the income management plan of a property actually involves a close look at the property expenditure.
- Some of the outgoings in a property will be recoverable from the tenants. That will usually be for consumable services such as cleaning, electricity, water, or gas. The process of recovery really depends on the property and how services are established for the tenants to use and access. Importantly you should look for the recoverable consumables in the income stream and understand what they are for. The lease for the tenant will usually give details of that recovery.
- Arrears in a property will be reflected on the monthly tenant rent invoices. Check out the rent invoices for any outstanding items. If arrears exist, find out what they are for and how they occurred. Some tenants conveniently ignore unusual charges in their rent statement. After a few months it is really hard to know what the original charge was for.
- Rent reviews are a factor that improves rent charges for the landlord (in most cases). Every lease is different and on that basis should be checked for upcoming rent reviews. Understand how those rent reviews are to be implemented and when that is to occur. Time may be of the essence for that event to occur.
- Remittance of money to the landlord is part of income management. Each month or even twice monthly, the landlord should receive money from the rental payments in the property and with the tenant mix. The balance of funds become challenging when the vacancy factors in the property start to rise.
You can add to this list based on the landlord and the property. As real estate agents, our job is to optimise the income given the prevailing factors of the property and the market.
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 commercial real estate today, the proposal that you provide to the client is at least 50% of your business winning strategy. The other 50% is your ability to connect and communicate the right message to the client about the property and the local property market.
This then says that your proposal structure should be carefully considered and crafted to suit the situation. Generic proposals are really a waste of time.
You need to make your strategy and offering stand out as the best solution to the client given the challenges that they face today.
Here are some ideas to help your client proposal structure in sales, leasing, or property management.
- At the very front of the document you should have an executive summary. That part of the document can only be inserted after the proposal has been put together, and after you have completed the necessary recommendations and strategies. That being said, the executive summary is perhaps the most important part of the document to focus the client on your ideas and recommendations. The summary should be no more than two pages in length and should be structured around clear dot points. The executive summary can make your sales pitch and presentation far more effective and relevant.
- The length of a proposal document can vary depending on property complexity. You should however give preference to simplicity in layout and a document that is easy to understand, read, and interpret. Many clients will not read past the first few pages of the proposal document. Most proposal documents should be no more than 25 pages in length. Many will be less than 12 pages in length.
- It is important to clarify the facts about the property and the challenges that the client faces. That should occur early in your document layout so the client understands that you are on their wavelength.
- Provide details of the local property market together with competing properties, prices, rentals, and time on market. This information will give you a solid base to recommend marketing strategies and sales or leasing alternatives.
- Every client likes to make some choices and have some control. For this reason your recommendations should have two or three alternative choices for the client to consider. Invariably they will usually choose the middle recommendation that is neither too expensive nor poorly structured.
- Some clients will have definite concerns regards the local property market today, and where their property sits in relation to that. Develop a question and answer process to insert into your proposal where you can handle those troubling factors that the client has raised with you.
- Provide a a graphing process to show the client the way you will take them as part of the marketing campaign. A Gantt chart is the best graph to use.
- The fee structure will form an important part of the document and is usually placed towards the rear. That being said, you should structure your fees competitively but also realistically for the amount of work involved in the listing or appointment.
There is always a basic structure to a proposal, but the main part of the document will always be focused on the property. In this way you show relevance to the client as the top agent with the right skills to help them solve the property problem.
In commercial real estate, questions form a big part of our interaction with clients and prospects. Asking the right questions will help you move through the listing and marketing process with focus and momentum.
When you think about it there are a few phases to a commercial property process that are critical and that we are at the centre of. Here are some of them:
- Prospecting for new business and listings
- Getting to know the right people for future property activity
- Pitching and presenting your skills and services to the right people so you can attract the listings
- Qualifying enquiries and people as they come to you for new business or a new property
- Inspecting properties with the right people that have been vetted for relevance and ability to act
- Negotiating and closing on sales and lease opportunities
All of these things involve some advanced questions and processes of communication. You can never know too much about the process of communication.
It can be said that top agents are usually very good communicators. They know what to say and do, and they practice their skills.
Your success in the commercial real estate industry depends on many things but two of the biggest are:
- Your prospecting and networking strategy
- Your rapport building skills and systems
Have you ever been involved with a salesperson that took your business but clearly did not want to have anything much to do with you? They invariably leave a bad taste or experience, and you will usually spread the word at your disgust.
Salespeople with ‘stinking attitudes’ do not deserve business or customers; over time these salespeople do not survive.
Bad news will always be spread by clients and customers that did not like your attitude and or service. They will do their upmost to tell others not to trust you and or you agency.
So let’s go back to the fact that questions are critical to rapport building and communication with your clients. Here are my ‘rules of engagement’ when it comes to clients and customers. Use questions to address these things:
- Seek to understand their needs fully before you offer suggestions of the market or the approach to sales or leasing.
- Get to know the property requirement in all respects before you give an opinion of marketing and target market.
- Get involved with the clients ‘thinking’ so you know how to help them.
- Offer real market suggestions given the local area and the competing properties
- Be a real strategist that can bring high relevance and momentum to a good property in a quality area.
Commercial real estate is not overly complex; it just requires salespeople that align to the client and the property.
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.