Talking Shop with Commercial Real Estate Leasing Brokers

In commercial real estate today, the leasing process is a significant opportunity for brokerage fees and commissions.  That being said, leasing opportunity can be optimised through understanding the market and the requirements of tenants today.

A good leasing agent will maintain significant ongoing contact with the business community, tenants in occupancy, and landlords.  A professional leasing specialist will usually have several hundred tenants in their database.  Over time the ongoing contact with those tenants will help with leasing opportunity.  A good database of tenants will give you leverage when it comes to attracting landlords with quality properties to lease.

So the basic strategy behind attracting a lease transaction will be for you to work with available property activity including the following variables:

  • The needs of expansion for particular tenancies
  • The needs of contraction for local businesses
  • Relocation requirements relating to business activity
  • That need to reduce or control occupancy costs
  • Tenants that find it difficult to work with the landlords
  • An upgrade of property type to provide a better business image
  • A tenant looking for the benefits of a new lease incentive as part of changing premises
  • Landlords looking to resolve upcoming vacancies
  • Landlords undertaking a property expansion and change process
  • New properties coming into the market providing project leasing opportunities
  • Sale and leaseback opportunities with existing businesses

It should be said that quality vacant listings will always attract solid leasing enquiry.  That assumes that the rental and being asked is in line with prevailing market conditions.  Any rent that is negotiated today can be shaped and improved over time through a well-structured lease document.  Lease terms and conditions can be improved through the negotiation process on behalf of your client.

To encourage a lease transaction, the overall package of rental, occupancy costs, and lease terms need to be well considered and structured.  As the local leasing specialist, take the time to understand the changes in the market, the requirements of tenants, and the supply of available space.  A successful transaction is a reflection of all three factors.  You can be the facilitator of a successful property transaction.

It should be remembered that a successful leasing transaction can always open the door to a property management appointment or a future sale opportunity.  Asking the right questions and staying in contact with the right people will help with those matters.

If you have chosen this segment of the market as your speciality, there are some basic rules to be remembered.  Here are some of the most important ones:

  1. Quality properties will always lease faster than average ones.  For that reason, your prospecting activities should be focused on the best properties in the region.
  2. Ongoing tenant and landlord contact will be a daily requirement.  Spend at least 3 hours per day talking to tenants and landlords in the market.  You can get a significant volume of market intelligence through this process.  Tenants will usually know more about the local market than you do.  They will know about those other businesses that are looking to change and move.
  3. The tenant advocacy process offers significant leasing opportunity.  That being said, it is best to focus on quality tenants with established businesses.  You can also focus on the larger properties as part of that process so that the fees generated will be significant for the amount of work involved and the area under lease.  Small properties and small tenancies can be a large amount of work when it comes to finding a tenant, and closing on a deal.  Recognise the opportunity of working with better properties and larger areas.
  4. Look at the rentals that apply to the average lease transactions within your town or city.  Rentals are usually quite high when it comes to retail property.  Office property rental will usually be reasonably high for the volume of area leased.  At the bottom end of the scale, industrial property will offer a lower rental per unit of area.  On that basis the fees can be similarly low unless you are leasing a very large industrial property.  So you have some choices to make when it comes to your choice of property to lease.  You should also select the best regions to focus your leasing activity within.

There are always good properties to lease in most towns or cities.  Balance the rental to the prevailing market conditions, and the needs of your client, be they the landlord or the tenant.  You can certainly build a good career in the property industry focusing on leasing opportunities.

Robotic Listing and Selling in Commercial Real Estate Brokerage

In commercial real estate brokerage the listing and selling process can almost be ‘robotic’ if you follow the rules and use a plan to move people through your ‘pipeline’.  I am not inferring that the ‘robotic’ approach is negative; it is actually a great way to help your contact pipeline feed the listings to you and over time that means more market share.  Here are some notes from our Newsletter this week.

Listing and selling commercial real estate today is really just simple communication.  It is a matter of how ‘good’ you are at the stages and levels of interaction.

Let’s simplify the ‘pipeline’ for you.  It works this way:

  1. Property and prospect research – this is in knowing how to find the right properties and people to work with.  Research the market every night so you can get traction in better clients and listings.
  2. Prospecting activity – this is a regular daily requirement.  There is no other faster way to build your market share.  Put your prospecting time in your diary and implement the process each morning.
  3. Qualifying clients and prospects – some people that you talk to will be open and honest when it comes to their property requirements. Others may be less so open.  Ask the right questions to get to the real facts of every property need or transaction.
  4. Meetings and presentations – they should occur every day as a direct result or prospecting new people.  Target 2 new meetings per day.
  5. Listings – converting listings can be a special process. You must stand out from the competitors in your market.
  6. Marketing – this should be focused on the target market for the property and the region.
  7. Handling objections and negotiating – every property is different so be prepared for every negotiation.
  8. Documentation – accuracy is critical to help a deal move ahead
  9. Follow through on closed deals – don’t let a deal slow or get diverted due to inattention.
  10. Long term relationships – they will bring you the leads over time.

They are the simple things in commercial real estate that are all as important as each other.  One stage leads to the next stage.  It directly follows that you should be very good at all of the stages if you want to generate some quality listings and the better deals that go with that.  If you are not doing so currently, then practice and personal improvement is required.

So the ‘robotic’ approach starts to appear when you have all of the stages working well and integrated into the other stages.  When you look at the commercial property industry overall and in most locations, you can improve so many listings and commission opportunities when the separate parts of the process are ‘optimised’.

You can get more tips like this in our Newsletter right here.

Excellent Commercial Property Management Handover Tips

In commercial and retail property management today, you should have a very definite handover process that you can implement simply and effectively.  This can be a significant strategy to capture the required information relating to the property, the client, and the location.  In this way you can move ahead accurately to protect the income and the tenancy mix for the client.

Any new property coming into your portfolio can be complex.  There can be issues within the property that are hidden from any general overview.  That is where the checklist will help you drill down into possibilities and challenges.

Here are some issues that you can merge into your checklist process.  You can add to the list based on the location of the property, your town or city, and the improvements.  It should also be noted that separate checklists should apply to office, industrial, and retail property types.  Each property type will have differences in levels of focus and questioning.

  1. Inspect the property comprehensively before you get into any analysis and questioning process.  You need to understand the property physically including the tenancy mix, the location, and the neighbouring properties.  Look for any issues that could have an impact on property function.
  2. Check out the zoning relating to the property and its location.  Look at the local development plans as they apply to the region.
  3. Assess the factors of supply and demand that apply locally to the property type.
  4. Understand how people get to the property and move through it.  That will require an analysis of transport and road usage.  This factor is quite important when it comes to larger properties and shopping centres.  The customers and the tenants to the property will access it in different ways.  Understand how that occurs.
  5. As part of the initial property inspection, take plenty of photographs.  That will help you remember the key issues and the layout as they apply to the tenancy mix and the building structure.
  6. Understand the local regional property demographic.  There may be other properties of similar size and type locally.  Those other investments are likely to place pressures on your vacancy factors and tenancy mix.
  7. Assess the tenancy mix for its activity today and any threats to income and occupancy.  Look at the critical date factors that apply in each case and with each lease.  Any upcoming critical dates will need to be responded to efficiently and in a timely way.
  8. Ask the landlord about any tenancy matters and outstanding disputes.  Get copies of correspondence that relate to those things.  Seek instructions from the landlord accordingly.
  9. Undertaking a full lease review.  All lease documentation should be checked against the current rental invoices and the tenancy schedule.  Look for any discrepancies or changes.
  10. Ask questions about the risks and liabilities that could occur with the property as a physical structure.  There may be issues relating to property usage, maintenance, access, and tenant occupancy.  It may be necessary to get a building report undertaken by engineers and specialist consultants.
  11. Meet with the maintenance contractor’s to the building.  Find out about current repairs and outstanding issues.
  12. Review the maintenance budget and the income and expenditure budget that exists for the property today.  Check that it is accurate.  Understand how the actual income is tracking towards budget.  Look for any discrepancies in the cash flow.
  13. Look at the vacancy factors in the property today, and understand the strategies behind vacancy marketing and leasing.  It may be necessary to undertake a fresh tenant mix approach with the pending vacancies.
  14. Check out any existing fit out works that apply to occupancy or building renovation.  Ensure that you have the necessary planning approvals and approved drawings.  There may also be a need for property re-survey as a result of building modification.

So this is just the start to the commercial property handover process.  As you can see, there is a real need here for a checklist so that you can stay on track accurately and efficiently.  Ask questions at every opportunity, and document the answers that you get from contractors, tenants, and the landlord.

What to Know About Signboard Strategies in Commercial Real Estate Brokerage

Signboards in commercial real estate are a critical part of branding for both the brokerage and also for the agent.  The greater number of signs you have in your territory the easier it is for you to build your listing opportunities.

Most of the clients that use our services don’t want to list their property with a ‘secret agent’.  They want the agent with the best exposure to the market that can attract the enquiry fast and efficiently.  Signboards help with that.

I should qualify this further and say that ‘exclusive listings’ are better for your signboard profile and exposure.  On that basis every sales pitch and presentation should be centred on converting a listing in that way.  Top agents dominate the market with ‘exclusives’.  When you control the listing stock, the market has to come to you.  That assumes that you have listed the property correctly and at a market rent or price.

So let’s go back to the matter of ‘signs’.  Here are some tips to using this marketing tool effectively for building your profile individually and for the brokerage.

  1. Do a ‘sign count’ each weekend so you know exactly your position in the market with listings and board visibility.  This monitoring process also gets you into your territory on a regular basis so it helps with market awareness.  The best time to do the ‘count’ is on a weekend when traffic and access is easy.  For some brokers this is first thing on Sunday morning.
  2. Understand the regulations that apply to the placement and approval of boards on properties.  Some local councils or municipalities will have regulations that set some rules to stick to.
  3. Have a contractor check your signs weekly for vandalism or weather damage.  Nothing detracts more from a listing than a damaged sign.
  4. On any quality listing and particularly any exclusive listing, the board cost should be covered by the vendor paid marketing fees.  On that basis the board should be specially created for the listing and the location.
  5. Use ‘dot points’ on the sign so the features of the property are easily read and captured by passing traffic.
  6. Put a reference of the property on the board so the person reading the information can call you and quote a reference number to take you immediately to the listing information.  Be prepared to take telephone enquiries about a property at any time (that includes weekends).
  7. Size does matter in this type of property marketing.  Understand the best legal size for the board and its placement strategy.  Face the board to the passing traffic.
  8. When you place a board on a property, directly contact all surrounding businesses and property owners.  A new listing is an excuse to talk to many people in the area.

Respect the opportunity in marketing that this sign strategy offers you.  It is silent and yet so effective.   All quality listings should feature a great signage marketing solution.

Top Things to Do in Commercial Real Estate Brokerage Sales

Every day there will be plenty of things to do in your commercial real estate brokerage.  The choices that you make in that regard will have significant impact on the results that you achieve.  The key message here is that you should control your day and only do the things that are really important to growth of market share and commissions.  Everything else needs to wait to the end of the day when the pressure is off.

Here are some things to consider and action on a daily basis to help you with your career in the industry.

  1. Check out the new property developments coming into the market.  Go to the local planning and building approvals office at least once per month to check the new developments under consideration.  The planning approvals of today will be the buildings of tomorrow.  You can make a lot of commission working on a major new development for sale or for lease.  When you locate the potential development, connect with the property developer or the property owner as required.  Identify the trigger points that will help you convert a new project to a listing.
  2. Check the number of listings in the market today by doing a weekly count of signboards and Internet advertisements.  Split those numbers into brokerages and agencies.  Pay particular attention to the shifts in market share.  Also look for the dominance of particular agents or brokers.  Track the time on market for those listings.  Look for the expiry dates of exclusive listings.
  3. You will find some listings that are being marketed by the relative property owners.  In many respects, you will find that those properties for sale or for lease will stay on the market for a long time.  Those property owners generally do not have the marketing skills or the resources to generate enquiry.  That being said, their reason for the self-marketing is usually that they don’t want to pay commission.  If you approach them for a listing, they will usually load their price or rental for the commission to be paid.  This can be counterproductive and produce an overpriced listing; the property would have already been on the market for some time anyway.  If you are going to work with property owners in this way, be prepared to push strongly for the rent and the price that the market will provide.  You can walk away from the listing if the price or rental is unrealistic.  In many respects, it is better to do that and waste your valuable resources and tarnish your image as a top agent.

So there are plenty of things to do when it comes to consolidating your market share.  Keep a close eye on the market activity and track the results that you achieve.  Top agents progressively grow their market share through diligent and directed action.  That is why you should track your ratios and numbers.