As part of your commercial real estate activity, you should research your property market at least quarterly and preferably monthly. On that basis you can project what sale and leasing activity is currently underway and what will occur over the coming foreseeable future. Essentially you are looking for listing opportunity, growth of commission, and new business. You are also looking to reduce any threats from industry downturn or change.
It really doesn’t matter whether you are working as an individual sales agent, or as part of a commercial real estate team. The same rules and processes apply when it comes to researching your market. You need to know what’s going on and you do need to set some specific strategies in place to help you capture the right levels of new business.
Here are some ideas to merge into your commercial real estate market research. After gathering the information, you can apply the findings to your personal business plan.
- Determine the geographic zone where you will get most of your new business from. That will be an area where you can focus almost all of your marketing and prospecting. It can also be an area which allows you to survey and research current activity. This then becomes your primary area of focus that should produce 75% of your listing and commission income opportunity. The other 25% of business will come from outside of the zone, or alternatively referral and repeat business.
- Given that you know where the business is now going to be coming from, determine the best customer demographics set that will apply to your prospecting model. Normally you will be focusing on local business proprietors, property investors, and industry professionals. On a street by street and property by property basis, it is necessary to research these people and make the direct contact. The direct contact will involve cold calling, door knocking, and direct mail.
- Research the history of sales and leasing activity in your local area. The critical zone of activity will be over the last five years. Create a graph from the numbers that you identify. Look for the peaks and troughs when it comes to seasonal sales and leasing activity. Determine if there are any opportunities and changes on the horizon.
- Review the supply and demand projections for commercial, industrial, and retail property in your target area over the coming three years. As part of that process you can visit the local planning office and regularly update yourself with changes to the development plan and or new projects coming up. Look for those changes that could impact the market. Seize on the opportunities early before other agents find them.
- Do a competitor analysis throughout your region. Some agencies will be better than others when it comes to results and market share.. Some agents will be more effective than others. Look for the differences with the successful people, and then determine how they have achieved their market share and dominance. Successful agents leave clues as to process and system. This can be replicated.
- Do an Internet advertising count of all the listings currently available for sale or for lease with your competitors. This should be on an agency and or salesperson basis.
- Do a signboards count all the listings currently available for sale or for lease. This should again be on an agency and salesperson basis.
- Assess the factors of time on market when it comes to those properties that remain outstanding, unsold, or vacant.
- Look at the factors of marketing that apply to current listings in your local area. Look at the differences across all agencies in marketing when it comes to open listings and exclusive listings. Can you do anything more effectively and differently than the other agents?
Given your local property market, and property specialty, you may very well be able to add something to the list. You can now see the importance of understanding what is going on currently in your local area and how it can impact your future promotional activity.
Systems in commercial real estate agency set you free and help you build your career. Without systems you will struggle as an agent. So you cannot be ‘out of control’ if you want to improve as an agent.
It is the regular things that you do every day that build habits and those habits help you build market share. Top agents are those that work in a controlled and focused way. You can do the same.
If you believe you are out of control in your career today, take a look at the things you should be doing and what you are actually doing now. Therein lies the answers that you need to resolve market share and productivity problems.
Here are some facts and systems that you can merge into your business model.
- Researching new prospects should be done every day; you need fresh people to talk to. The best time to do that research is in the evening when the pressure is off. We can all use the internet and use it as a prospecting and research tool. It is likely that you can access your database from home as well. Use remote technology to your advantage.
- Prospecting should happen at the same time each day. Given that most people get distracted as the day progresses, prospecting is best done in the morning first thing. Avoid morning meetings for this very purpose (I know this will upset some agency principals). Long morning meetings are a terrible waste of time.
- Presentations for listings should be practiced. Hopefully you are a specialist agent in a local area and property type. This will make your presentations a bit easier and you can refine them accordingly.
- Marketing campaigns should be focused on the needs of the property and the client. Given that there are so many unsold and vacant properties on the market today, it is critical that you make every marketing campaign a good one. Be specific in the way you are reaching your target audience. Get personally involved in your marketing efforts.
- Property inspections should occur only after the prospect has been qualified. Make sure that they are the right people for the property before you take them to it. Develop a system of property inspection that features the listing correctly and comprehensively. Make every property inspection great with the right preparation.
- Negotiations and client connection go hand in hand. Keep the client up to date with all property events, marketing, inspections and negotiations. An informed client is much better to work with. It is notable that top clients should be served by exclusive listings.
- Database systems should support your ongoing growth of market share. You cannot delegate that process. It is a personal one that you should take ownership of.
So now you can see how important systems are to a commercial real estate agent. If you want to succeed in this industry, take a look at your systems (or lack of them) and make them better.
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.
In commercial real estate today, you have to set some rules in time management and then stick to them. Your time is the greatest resource that can help you move ahead.
It is a fact that many agents struggle with the whole time and control process. They give in to the pressures of clients, peers, listings, and the office. Exactly who is in control here anyway?
So why do you need to control your time? For one simple reason; everyone around you will want some of your time, and at the end of the working day you could have achieved very little that is important to your business growth as an agent.
So here are some time management tips:
- You will know that there are 3 things that really matter as an agent. They are your prospecting, your clients and your listings. Everything else revolves around those 3 things. Setting priorities in your working day is therefore really important.
- Create key habits that can allow you to get to the 3 things mentioned earlier. Habits are critical to taking you forward; it is the things that you do every day that will change your business outlook and market share.
- The circadian cycle or biological clock says that you are most effective between 7 am and 11 am. There is also a second window of time between 3pm and 6 pm that is useful. How do you use your resources in these windows of time? Quite clearly you should be doing your prospecting during the early part of the day.
- When you start something you are good for about 2 hours before you will want a break. Build short breaks into your working day so you can keep up the momentum.
- When you get into something new, it takes about 20 minutes to lock into the issue and get some momentum. If someone interrupts you, the clock resets. This is the single most common reason for lack of focus in a busy real estate office; people are distracting each other most of the day. They then cannot get the traction and focus on important things.
- A computer based diary is convenient, but a written daily diary is essential if you want to focus your efforts. It is a fact that people need to write things down to figure out a way of doing them. A daily dairy will help you do that.
- Prioritize everything that you do. Only do the important stuff first. Don’t let small and convenient things take you away from the issues that matter.
So how are you going to do all of this? With focus and diligence you can get there. It’s all up to you.
In commercial real estate agency today, the cold calling process is critical to the market share that you require and commissions that you create. You cannot avoid the process if you want to rise to the top of the market.
That being said, it is interesting to note that the cold calling process is something that many agents avoid with a great passion. Call reluctance is a real problem in the industry.
Top agents that work in the industry know that you have to make the calls to get the business. The strength and size of your database is fundamentally important to the commissions that you create. Each day you should be phoning into your database to make contact with the right people. You should also be creating new contacts and leads to help that database grow.
Here are some tips to help you in establishing a cold call prospecting system as part of your commercial real estate career.
- From the very start of the process, you will have some mental hurdles to address and overcome. Call reluctance is a big problem until such time as you see results and momentum from your efforts. It takes about three or four weeks of hard work to break through this barrier. Creating a habit to the call process is quite important. Only a habit will take you through the barrier of call reluctance.
- Determine the ideal property type and geographical area in which you should centre your prospecting efforts. Each night you will need to do the necessary research to find new people to call the next day. Don’t waste your precious calling time on research. The research can be done the night before. Keep up your momentum with calls and avoid in any distraction or diversion. In a period of 2 or 3 hours you should be making 50 outbound calls. You will not get through to 50 people as part of that process, but you should get through to about 20 or so people. From that rate of connection you should create 2 meetings with people that have a genuine interest in commercial real estate agency activity.
- Track your ratios of calls to connections, connections to meetings, and meetings to business opportunity. The ratios are really important to keep you on track and also to show you what is working. When something starts to get traction, you improve the process through practice.
- Confidence and dialogue are two important parts of making the calls. Both of those factors are personally controlled and can be improved. What you can do here is practice your call conversations and scripts as part of rising each morning and in preparation for the working day. Over a period of a few weeks, the call conversation and connection will significantly improve.
- Use a database program that has significant flexibility to capture the information that you come across. That will include a property type, location, price ranges, contact details, ongoing meetings and connection results, and future needs. Make sure that the database program can integrate with an e-mail newsletter and also a direct mail merge.
- Your confidence in making the calls will be significantly boosted if you choose to stand up as part of the calling process. It is a known fact that the conversational ability of people improves greatly when you are standing on two feet and moving around. Use this advantage to help you improve your call connections.
For an agent to be successful in commercial real estate, they need to be focused on growing their market share and their database. Use some of these factors above to help you get the momentum and traction that you require from direct call contact. Over time you can improve these things to a system that works for you.
When it comes to leasing and managing a retail property today, the tenant mix strategy and analysis process becomes critical to rental stability and minimising the vacancy factor in the property. Given that this property market is under some pressure currently, you as the leasing manager or property manager need to protect your tenancy mix and the income that comes from it.
A good tenancy mix will reflect in the stability and growth of trade for the smaller tenants in the retail property or shopping centre. That being said, you still need to have the right tenants in the property that satisfy the needs of customers.
Here are some ideas to help you with improving the tenancy profile across your property.
- Maintain close business relationships with all of your tenants. When it comes to managing or leasing a retail property, you should be meeting your tenants quite regularly; that will usually be two or three times a month. Retail tenants are quite volatile and will react quickly if sales are down or the property is performing poorly.
- Understand the leases as they relate to each tenancy. That will include rent reviews, lease expiry dates, lease renewal options, make good provisions, outgoings recovery, and other critical terms and conditions. Make sure that all of these issues are correctly captured into a diary based software program that can tell you well in advance of the actions that you need to take. As a general rule, any issues that are to occur inside the next 12 months should be commence early. In this way you will be well prepared for protracted and slow negotiations if they are to occur.
- Understand what the customers are looking for when it comes to visiting your property. The best way to do this is through some survey process on the property over a period of two weeks each quarter. You will then get a reasonable idea of shopping needs, and customer requirements. You will also identify the weaknesses in the property that can be addressed before they have impact on sales. It is a fact that retail shopping patterns are changing, however they will not disappear. You simply need to adjust your tenancy mix over time to suit the requirements of today’s trends in retail marketing.
- Develop a series of clusters within your tenancy mix. These clusters should be comprised of specially selected tenants that complement the retail offering of each tenant nearby. A customer can then move from one shop to another as they purchase goods. You can also choose tenancies for your cluster that retain the customer’s interest in the property and the location. A coffee type tenant in a cluster will extend the shopping potential of the customer in the cluster zone.
- Within the property you are likely to have one or more anchor tenants. They should have been chosen for their relevancy to the surrounding customer demographic. You can then position the specialty tenants and the clusters based on the location of the anchor tenants.
- It is interesting to note the different shopping habits between males and females. Generally speaking the shopping patterns of females is far more complex to that of males. A female spend far more time in the property moving from shop to shop and looking at many different things. A male will generally go to the property to purchase one or two things and then leave.
It is a fact that customers expect a vibrant property when they visit. This will include presentation, other customers, and great tenants. For all of these reasons, you will need to balance your tenancy mix accordingly.
It is an interesting question to ask in this property market. Exactly why are you a better commercial real estate agent for a client to use than some other agents locally? Why do you stand out as the best choice to take on the listing? The clients and prospects that you serve will be asking themselves those questions and they don’t want to make mistakes in getting to the answer. Here are some tips from our Newsletter.
Here is what most agents say when it comes to providing the answer to their clients:
- We have all the experience with properties of this type
- We are top agents locally by far
- We have the best people on team that will serve you comprehensively
- We are part of a very big network of offices and your listing will be promoted across the network
- We know how to promote this property
- We have the results in the local area
- We know exactly what you want Mr Client
- We can do this your way without marketing funds and at a lower commission
- We are the best at getting results faster
Have you heard some of these before? If you say any of these things to a client you have to prove what you say. It is not sufficient to ‘throw out the line’ without any substance to back it up. The clients that you serve expect you to prove it.
It is no secret that the current commercial and retail property market is under some pressure in prices, rents, time on market, and negotiations. You have to do more with less when it comes to working and marketing a listing.
Do you treat your exclusive listings with the focus they deserve? Can you prove to the client that the exclusive listing process in your agency is quite special and unique to the point that it is exactly what they need to create the property enquiries and the inspections? As you can see from these questions, I am pushing you to think about the sales pitch and presentation that you use today, so you can make it highly relevant to the client and the property. When you do this the listings are far easier to convert.
New agents and salespeople in commercial real estate always find it difficult to attract and convert exclusive listings, and on that basis most of their listing stock initially is ‘open agency’. If this sounds like you, start to focus on improving your relevance and your pitch. Remove the ‘generic comments’ from your sales pitch and become very property specific. Provide marketing, inspection, and negotiation solutions that are matched to the property and the client. In simple terms, be very special.
Leasing commercial real estate is something that can provide a good buffer of commission when sales listings and actual sales have slowed. It is also the case that a successful lease transaction can lead to a future property management or sales opportunity. This then says that all top commercial real estate agents should be prepared to lease ‘quality’ local property.
Notice that I said the word ‘quality’ when it comes to property selection. Determine the property size and type that will give you the appropriate fee for a successful lease transaction. Focus locally on quality, the good landlords, and the quality tenants. A lease transaction can take a reasonable amount of time to initiate and complete. On that basis you should only focus on the good deals and the good opportunities. Let some other agent have the small things to lease that have minimal fee results.
Here are some tips for taking enquiries from tenants today when it comes to leasing new premises or relocating:
- Make sure that you’re talking to the decision maker when it comes to the particular tenant. Get the contact details and the identity of the tenant sorted before you provide too much property information.
- Ask them about the property type that they are looking for when it comes to improvements, services and amenities, location, and permitted use. Also find out about the required lease term, the rental budget, and property usage.
- The tenant’s staff and the customers interacting on the property will create certain challenges when it comes to improvements and location. Car parking is a good example and case in point.
- There are big differences when it comes to leasing office, industrial, and retail property. Create checklists for each so you can ask the relevant questions with potential tenants.
- Is the tenant coming to you today from another property location? Are they new to leasing property locally? If they know nothing about the local area, you will need to fill in the gaps when it comes to business demographics, transport, communication, local area profile, and property usage.
- If they are coming to you from another property location, they may have some timeframe to satisfy or a property disposal requirement. Ask the right questions to get the complete picture. You may even find another listing requirement with the property changeover.
- Has the tenant looked at other listings with other local property agents? It is quite likely that they have seen other listings and may have current negotiations underway through other agents. It is good to know if this is the case so you can adjust your strategy accordingly.
Don’t be too eager to take a tenant to a property. Get all of the facts together prior to the inspection process so that you don’t waste your time with the incorrect strategies or listings. Match the tenant to the property before you leave the office; qualify them. If necessary take them to a number of properties to give them a comparison of current market conditions.
Get more tips like this in our Newsletter.
In commercial real estate agency, the sales team can be a powerful force in the market if the team works together. The disciplines of sales, leasing, and property management all require special people with special skills. As the properties that you work on become more complex, the team involvement process will help all your presentations and sales pitches.
So you can have either of these situations in your real estate agency:
- You can have a group of top salespeople that all do their own thing in marketing, prospecting, and listing.
- You can have a group of top salespeople and agency staff that are industry and property specialists and that pull together on the bigger listings to strengthen the service and coverage.
If I was a commercial real estate client today I know what I would prefer from the agency, and on that basis I would choose the second approach in granting an agent the listing. If you focus on quality listings, the property may just be so special and unique that you cannot do everything on your own. Bring other team members around you to help the sales pitch and the listing conversion.
Here are a few things that can help the team approach:
- A leasing opportunity is a reason to get your top property managers involved to review and address blow outs in property operational costs, lease documents, or tenancy mix. Over time this extra service will help you convert a property management listing.
- A leasing opportunity will help you with the client relationship and open the door on a potential sale at the right time.
- Property management appointments will create new business leads and deals in leasing and sales. Over time, the services and staff in your property management division should be of the highest quality to preserve and protect the future sale or lease requirements. Choose your property management staff wisely so they can protect this portion of your agency business. Use your property management staff as part of every pitch on quality property locally.
- Whilst you may be seeking just a sales listing appointment for your property, have your ‘marketing coordinators’ from your agency attend the listing presentation to give specialist comment on just how the marketing will work and where the enquiry is coming from today. Use graphs of response levels shown in the current promotional categories of website, internet, email, direct marketing, signboards, flyers, and cold calling. Use your database as leverage in the discussion.
It is not hard to win a commercial or retail real estate listing if you work as a team and use the skills of each person as the specialists that they are. Get your best people involved in your presentations.
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.