In commercial and retail property management, you should have a process and a system to help you attract new property management clients. Over time the income from the management portfolio will support the agency and provide stability when sales and leasing activity is low. Here are some tips from our Newsletter.
There are a number of different ways to attract these clients to your business, with some processes being more successful than others. Here are some ideas to help:
- The best way to attract new business of this nature will be through and at the time of the completion of a successful sale or lease transaction. The property owners are primed for the discussion. It will be a matter of showing them why a professional management service will be of value to them. Perhaps you could save them time, money, or remove the frustration from the tasks involved.
- Some clients manage their own properties, and on that basis they will be targets for new business. That being said, they will typically not have the necessary systems to do the job properly. The larger the property, the more difficult it will be when it comes to tracking income, managing expenditure, and invoicing tenants. You can add to those requirements the other issues of lease management, risk controls, and tenant mix optimisation. All of these things require skill and knowledge. You can market your brokerage around the specialized services in each case.
- Review the properties currently being managed by your competitors. It should be fairly easy to understand and identify those properties that are being poorly managed. In most cases you will see evidence of that underperformance when you inspect the property and talk to the tenants. The skills of the manager will reflect in the quality of the management. Get in contact with the owners of those distressed or difficult properties, and offer a no obligation proposal to take over the property.
- Understand the leases that apply to the tenants within a property. You may find that the management fees are a recoverable item within the outgoings categories of the leases. This then says that the fees that you charge to manage will not be a financial burden to the property owner. They will simply be a recoverable item in the outgoing structure and invoicing process. Providing the property has a suitable level of outgoings when compared to other local properties, your fee recovery should be quite simple and achievable.
- The larger the property, the more complex the management process. That being said, you can provide specialised services when it comes to the tenancy mix, vacancy management, and outgoings control. All of these factors will give you leverage when it comes to winning the property management appointment.
So the message is quite clear. There will be some new business to win when it comes to managing quality properties and quality clients. The best strategy to achieve that is to identify the right time in the property cycle, and the right services to offer your clients.
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In commercial real estate brokerage you need a good database. When I say ‘good’ I am not referring to the complexity or brand of database. What I am referring to is that of the accuracy and volume of data that you have collected.
There is no point running a database unless you keep the information up to date and accurate. So many brokers struggle with that requirement. You may have heard the saying, ‘rubbish in and rubbish out’? That rule certainly applies in this case. Keep your contact information up to date and accurate.
If you want to dominate your market, then you will need to contact plenty of new people each day. If you prospect for 3 hours per working day (the recommended average), then half of that time should be devoted to new contacts, and the other half of the time should be devoted to current contacts. Over time the pipeline of contact that you establish will help you with sales and leasing opportunities.
Over time your prospects and clients will be contacted many times; that is how you build market share and opportunities. On that basis your customer contact system has to be flexible and accurate. It also requires the personal involvement and accuracy of the agent or broker.
Here are some rules to help you with your prospecting and client contact systems:
- Split your prospecting time 50/50 between current contacts and new people. That is how you will build new business.
- Focus on the process of ongoing contact. That will mean telephone calls and emails to the people that you know in an ongoing way. Record the results of your last points of contact so you can refer to earlier client situations and discussions.
- Get email addresses and the consent of the people that you are talking to about ongoing contact through email. You can then set up an ‘auto responder’ for that process. Not only is it economical, but also very convenient. It will save you a lot of time.
- Build ‘trust’ over time with your clients and prospects by providing valuable local market information. You can do that with listing sheets and sale or leasing updates.
- The ideal contact frequency to use with all of your clients and prospects will be your choice, however it has been proven that you will need to make valuable personal contact (telephone or meeting) at least once every 90 days.
So there are some key things to do here. Establish your prospecting system efficiently so you can get results in your market and with the property owners or business proprietors that really do need your service.
Better commercial real estate listings and clients are frequently ‘just one step away’ when it comes to growing your opportunities in commercial real estate brokerage. That one step involves prospecting and questioning.
The last step to take will be the difference between a top agency and ordinary brokerage; however it is the step that is the hardest to take for many salespeople. Without a prospecting and contact model, many agents struggle between the peaks and valleys of listing performance and commission income.
It takes about 3 months of effort to break into a new level or cycle of listing activity and market share. Three months can be a long time for some brokers to focus and drive the prospecting model ahead. From a ‘competitive’ position that can be an advantage to those agents and brokers that can get organised and stay focused.
So the last step to take is always ‘prospecting’ and that will be ‘getting in front of the right people at the right time’. For that purpose, every agent or broker should have a solid system of client and prospect contact; that will help them stay on track on a daily basis. The outcomes to a good contact system are usually better commissions, more clients, and quality listings.
When you reach out to talk to a new person about their property needs and they decline your services, remember that the listings are just one step away. I go back to the point that extra step is there and it can involve:
- Staying with the contact over a period of time
- Asking the extra questions about sales, leasing, or property management
- Checking out the adjacent properties and businesses in the area around a listing
- Understanding the pressures of property performance, income, and lease management
- Providing a ‘repositioning’ strategy behind the property issues and challenges
- Knowing that other agents or brokers may be under-servicing the client
- ‘For sale by owner’ listings can be a real headache for some clients
Many agents and brokers don’t win listings easily because they do not take the ‘extra step’.
To tap into this ‘pipeline of opportunity’, it is best to have a good database where you can track the information and the leads. Every time you go back to a person for ongoing contact, make sure that you know what happened and what was discussed at the last point of contact. The client or prospect will remember those facts and will be impressed by your diligence in process and understanding.
You can get more tips like this at our main website here on commercial real estate training.
In commercial real estate brokerage, you will need to change your sales strategy from time to time as the market adjusts to economic pressures and financial activity. In any period of 12 months, your market share and property type activity will fluctuate between sales, leasing, and property management. For this reason, the sales team needs to adjust strategically with the presentations and proposals that they put forward.
Make no mistake, the new business opportunities are always out there in commercial real estate. It is just a matter of understanding how to reach into the market and identify the right people to work with. Certainly the proposal or pitch in your team will need to change from time to time based on market conditions.
Your success as a commercial real estate agent or broker depends on your flexibility to adjust to prevailing market circumstances. Here are some ideas to help with that:
- Be aware of the brand impact that you have in the market. The brand will be both for the brokerage itself, and also the agents individually. Can the brand be improved? How does it compare to the existing competitors in the local area?
- In an ideal world, you will be looking for increasingly activity across sales, leasing and property management. The quality of activity needs to be assessed from time to time. Good listings will give you better results and improve your market share. It should also be said that the exclusive listings should be part of that process. The agency team needs to be prepared for pitching their services at an exclusive listing strategy.
- Review the quality of the listings that you are working with. Quality does not need to necessarily reflect in price, but rather it should be the quality that attracts enquiry. The quality listings attract the buyers and the tenants that can act in these market conditions. Generally speaking the quality of the property will be in cash flow, size, location, current usage, and future usage.
- The best methods of sale and lease that apply throughout the year will change. Ensure that the brokerage team is working with the most appropriate marketing solutions for the clients that they serve.
- There will be the opportunity for repeat business and referral business from the customers that you have served over the years. There should be a VIP customer program within your business that encourages referral opportunities.
- Understand and promote the linkage between sales results, and leasing and property management opportunities. One thing can lead to another. When one transaction has been completed, prepare for the next property challenge that the client may be heading towards.
- Some clients have factors of investment focus and targeted portfolios. They need certain property types, cash flow, tenants, and locations to make their investments work correctly. Your top agents should be working with a select group of VIP clients to ensure that their property needs are well served within your brokerage.
In looking at all of these factors, review the last two years of listing and commission performance. Look for the market segments that have worked for your brokerage and identify any trends that could be shifting or changing. Will you need to change your property focus or staff profiles and activities? Be prepared for the change when you see it.
Identify the strengths and weaknesses that will need to be addressed as part of ongoing business operations. A successful commercial real estate agency or brokerage is usually one that is highly aware of and flexible to the trends in the market. They make the adjustments quickly and effectively. Tracking your business on a weekly and monthly basis across all business segments will be required.
Every commercial real estate agent will have some ‘housework’ and mundane activities to track and keep under control. When this is correctly undertaken, they will understand where the property market is heading and how they can tap into the opportunity.
The ‘housework’ process involves tracking and measuring activity across a number of benchmarks and indicators. In any given period of 12 months, there will be plenty of changes when it comes to property enquiries, the listings, methods of sale or lease, marketing, and business sentiment. Here are some ideas to help you with that ‘housework’ monitoring and adjustment process:
- As a general rule, you should be tracking the numbers of inbound enquiries coming to you each day through the office, and via the telephone. Understand what those people and prospects are looking for in both property type, and location. Shifts in the economy, the availability of finance, and local business sentiment will have an impact on property changes and availability.
- Understand the listings that you have on your books at the moment. Track the time on market as it applies to each of your exclusive listings. All of those controlled listings should be tracked for activity, inspections, and negotiations. Those listings should also be taken through a price adjustment process where necessary, supported by a marketing shift. A listed property today can become quite ‘stale’ relatively quickly. Keep the exclusive listing fresh through shifts in marketing, advertising description, pricing strategy, and promotional activity.
- When it comes to promoting a listing and attracting enquiry, understand the things that are more effective than others when it comes to the various marketing alternatives available. Make each advertising process special and unique. Understand the target audience and apply a strategy to reach into them. Get away from generic marketing. Obtain vendor paid marketing funds as part of every exclusive listing.
- Track the numbers of signs in your local area with each agency. Add to that process the time on market for each of those listings.
- Track the number of properties listed on the websites of your competitors. Observe how they advertise property and determine whether that process is effective or poorly handled.
- When you look at any listing in the marketplace today, understand the differences and the success rates that apply to each method of sale and each method of lease. Some of those methods will be more successful than others.
- Stay in touch with your existing database and client base. Over time, there will be opportunities for referral business and repeat business. Remaining in contact for the long term will help you tap into the source of opportunity.
- Make plenty of prospecting calls every day to new people. An ongoing prospecting process will help you fill your ‘pipeline’ in any market and at any time. The consistent contact process will help you build market share providing you seek for and obtaining exclusive listings rather than open listings.
Be prepared to do the hard work and the ‘mundane work’ as part of your agency activities and business. Lot of this can be done at the end of the day out of your core prospecting time and client activity. The commercial property industry is very lucrative for those that put in the necessary work and the required focus.
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