There are always opportunities to be found in commercial real estate brokerage. To get the best results in your business and brokerage locally you should create a plan and strategy to take you forward. A successful commercial real estate brokerage will usually be the
At any time of year the property market will offer opportunity in sales, leasing, and property management; the trick is to find it. The strategy that you use helps you find that opportunity. So let’s consider some resources that you can put into your plan.
- The register of property owners for your location – Using the register you can identify people and companies that own local property.
- The business telephone book – Always remember that the local businesses will occupy or own the property in which they are located. Asking the right questions will get you to the ownership facts that you require.
- The internet – Using your computer you can search down opportunities in business types, companies, and other listings. Look for activities and changes. Find out the names of the leaders of each business and approach them directly for a property related discussion.
- Websites and industry portals – Always track the listings coming and going from the industry portals. In tracking that information you can understand the time on market factors and the best ways to advertise quality listings. You can also determine just what seems to be selling or leasing and why that is the case.
- A street directory of your location and city – Simple street maps of the area will keep your attention focused in streets and precincts. You can use a highlighter pen to track the streets and areas that you are focusing in or have been in as part of your prospecting and door knocking model.
- Blog strategies – Blogs are wonderful business tools. The great news here is that they are essentially free and the only thing you require to get one going is time. You can write things and you can show photos of your local town or city. The main idea behind a blog is that it is designed to be helpful and informational. Search engines like information and that is why blog strategies work.
- Social media – You should create a few social media strategies to use. Twitter, LinkedIn, and Google+ are all good tools to use in commercial real estate brokerage. There are others that you may know about, but don’t use some obscure social media platform that others have not heard about before. To encourage people to join your online social media efforts, use a platform that people understand.
- Your database program – A great database program will help you stay on track with new leads and clients. Most of the listings that you find will come from your database and the efforts you apply to making calls and contacts. If you want a lot of leads and listings, your database and how you work it will be the indicator and tool of success. How many people do you have in your database now? How often do you talk to those people? Good questions require specific answers; be honest with yourself.
- Your telephone – Technology today supports us comprehensively in so many ways. Get the best telephone deal possible so you can make many calls to your contacts and clients. Integrate SMS, email, and social media tools into your telephone. If your database is cloud based, then integrate the database into your smartphone.
- Your business card – Whilst this may be the last item on the list, it is the most important. If you give your business card out every day to new people, opportunities will come to you over time. Most people keep business cards. It is a simple and effective way of connecting with local people and building your relevance as an agent. How many business cards can you give out each day? How many business cards did you give out yesterday? Develop a strategy to get your business cards into the local area.
I am going to suggest here that as an agent or broker you do not need to have any other resources to find new business. Everything that you require as an agent or broker can be found by using these resources effectively and directly.
You can get more tips for commercial real estate agents here in our bulletin.
As you service and help commercial real estate investment clients, lease covenants and terms can be a critical part of property performance and the established tenancy mix strategy. Every lease can be potentially different, and in a property with a number of tenants in occupancy, lease interpretation and management becomes really important.
To take matters a bit further, it is worthwhile establishing a checklist of lease topics and ideas to review with every property investor client. Understand what the client is looking for and how the terms and conditions of any lease will impact the clients overall investment result.
Ways to Review Leases
Here are some basic ideas and questions to raise and investigate as part of the lease structure and review process:
- Property Usage – understand the legal use of the property and the current zoning that applies to existing planning regulations. The tenant and the lease should be matched to the legal use of the property. The lease itself should clearly determine and control how the property will be used by the tenant. The permitted use clause within the lease should be quite specific and detailed. In a property with many tenants this strategy becomes even more important and critical to the tenant mix.
- Rental Structure and Strategy – the lease will reflect the strategy behind rental charges and collections. The lease may reflect gross or net rentals depending on the occupancy situation. Outgoings will also be recovered as part of the rental strategy across the year. Always review a lease in detail to understand how the rental structure works and the outgoings are recovered. When you understand the figures, you can compare them to the levels of market rental in the local area for the property type.
- Lease Terms and Conditions – comprehensively review all the terms and conditions of every lease within a property. Look for the variations that could have an impact on the landlord and their investment requirements. Look at the expiry dates and the options situations that will occur during the lease term. Some leases will impact the property cash flow and hence the investment. Learn to read lease documentation and interpret the longer term property cash flow. Compare the net rental results regularly to the potential property value, and in doing so achieve the capitalization rate or yield result for the client. Compare those figures to the current market conditions and the property type.
- Property Budget and Rental Budget – when working with an entire property and the lease strategies behind the investment, ask to see the overall property budget and particularly both income and expenditure in an itemized form. From the budget you can assess expenditure rates per unit of area and compare those expenditures to other properties locally; you can also see how outgoings expenditure is recovered from the tenants given the existing lease documentation. From an investment perspective, your leased property should be within the expenditure averages for the property type.
In reviewing these four topics, you can move further into issues of property performance. Start with the basic information and move into levels of greater detail with every lease document, each tenant in the mix, and cash flow opportunity.
In every investment property there will be factors of change to manage and implement. In any year the pressures of the tenancy mix and the requirements of the current property ownership will generate change in property performance. In saying that, every investment property should have a business plan that takes into account the strategies of the landlord when it comes to investment outcomes.
Here are some ideas to help you track and manage change within any commercial investment property.
- Lettable space – the lettable space within the building should be optimised in a number of different ways. To do that you can move tenants around subject to the timing of leases, and the negotiations with existing tenants. To establish that level of control, you can create tenant retention plan and leasing strategy for the property. In that way you can allow for expansion and contraction requirements within each tenancy. You can also allow for the pressures of an upcoming known vacancy. If you have a high quality tenant in occupancy, it pays to help them rather than frustrate them when it comes to occupied space. A good tenant needs to be retained rather than lost.
- Renovation and refurbishment – with any investment property there will be times where renovation and refurbishment activities will need to occur within the asset. That can be a complex process given the number of tenants in the tenancy mix and the types of customers visiting the property. In any office or retail property you will find that the renovation or refurbishment concept needs to be carefully planned and managed. The effects on tenants and customers from any renovation program should be controlled at all times. Failure to do so will see a potential loss of rental and a business threat to existing tenants.
- Better tenants – understand the tenants that you have within the tenancy mix. Some tenants will be better than others when it comes to brand, marketing, rental payments, and business magnetism. Some tenants will draw business to the building and in that way encourage the overall levels of trade and exposure for other tenants in the mix. Understand the differences between your tenants, best locations for each tenant, and the clustering factors that can encourage better levels of trade and customer attraction.
- Rental upgrades – throughout the year there will be a need to assess market rentals as they apply to the location, the tenancy mix, and the property type. Rental expectations should be strategies set within the business plan for the property. Every rent review coming up over the financial year should be estimated, established and negotiated on factors within the lease document and the prevailing levels of market rent.
- Lease documents – every lease document should be reviewed for complexity and critical dates. There will be certain terms and conditions in every lease document that will have an impact on occupancy and income expectations. Some lease documents will therefore be better than others when it comes to property performance and investment results. Before you embark on any change management activity, understand the lease documents that you have currently in the property and how those lease documents will respond through the upcoming project or expected change.
- Property strengths – every investment property will have strengths and weaknesses to be understood and addressed. Any change management program should allow for an improvement in property strengths and a resolution of any weaknesses. The weaknesses can generally be removed by modifying the tenancy mix, upgrading lease documentation, and undertaking a renovation or refurbishment project.
- Improvements and services – in providing property improvements, amenities, and services to the tenants in any investment property, understand how factors of technology may be changing locally when it comes to business function and occupancy. Any modern investment property should be maintained in a way that allows for gradual improvement and upgrade when it comes to technology and tenant occupancy.
- Moving tenants – don’t be afraid to move tenants around when lease advantages and requirements are noted in the tenancy mix. Some tenants will be more successful when located to other premises within the same building. There will also be pressures of change when it comes to tenant or business expansion and contraction. Look at the clustering factors applying to the tenancy mix. Some tenants will be much more successful when placed near complementary tenants in the same building.
- Anchor tenants and specialty tenants – anchor tenants are usually those that occupy large parts of the property for a considerable period of time. The rental structure for anchor tenants will be totally different to that of specialty tenants; the levels of rent that apply to an anchor tenant will usually be less per square metre or per square foot than the rent paid by a specialty tenant. A good anchor tenant will help you attract specialty tenants and lower the vacancy rate. The strategies that apply to the two tenant types will be different and should be merged into the tenant retention plan for the property.
So there are some good things that you can do here when it comes to managing and optimising change within your commercial or retail investment property. Understand the property as it exists today, consider the prevailing market conditions, and look for the opportunities that can be created over time for the property owner. That is how you improve an investment property. Bring together the strategies of a business plan, a tenant retention plan, the lease marketing strategy, and the tenancy mix.
Once a year it is necessary to create an outgoings budget for any commercial investment property under management. After the budget has been created, the outgoings should be checked and managed to the budget over time; that is the job of the property manager. An outgoings audit will help establish an efficient and relevant budget for the asset given the size of the building, the age of the property, and the complexity of the tenancy mix. Over time that helps the landlord achieve the financial results that they seek.
Research The Facts for an Outgoings Audit
Here are some ideas to help you undertake an outgoings audit in a commercial or retail investment property:
- Understanding cash flow – The history of the property will give you some valuable information relating to cash flow. Over the last few years there will be patterns to property costs and maintenance. There will also be costs to be identified and tracked with rates and taxes. Rates and taxes will usually take up at least one third of your building expenditure budget and those numbers will be uncontrollable. Look at the averages for the area, and understand how rates and taxes have been escalating over recent time; undertake an estimate of what could happen to those figures in the current and future financial year.
- Finding expenditure savings – The idea of the outgoings audit is to achieve savings and create financial control. In analysing the outgoings for any investment property will see that the rates and taxes component will be the largest of categories. It will be quite rare for any savings to be achieved in rates and taxes; they always go up. On that basis you will need to identify savings within other categories of maintenance in the property. Control will be a focus of the outgoings budget and the spending patterns.
- Links to rental types – The outgoings categories and expenditure issues will have an impact on the rental for the property. The net income will be impacted by the recovery of outgoings. Understand the average costs that apply to expenditure within the building type. Ensure that your property is within the averages when it comes to occupancy costs. If your property is above the mark when it comes to occupancy costs, you will have some difficulty in leasing vacant premises. The tenants of today understand exactly what they should be paying when it comes to rental and outgoings.
- Vacancy pressures and non-recovery – Look for the factors of outgoings non-recovery due to vacancies. In a property with vacancy volatility, it pays to allow for some component of landlord outgoings contribution. In some properties, you will never achieve full occupancy within the tenancy mix, no matter how successful you may think your leasing program may be. On that basis the allowance for extra outgoings attributable to the vacancy factor is quite normal.
- Categories of outgoings – Always split your outgoings into categories so that you can see escalations as they arise within expenditure groups. In an older building, you will see escalations in repairs and maintenance and capital expenditure. Understand how those escalations can impact your expenditure budget over time.
- Volatility and Risk – There are factors of volatility and risk when it comes to the recovery of outgoings. The volatility factor will be driven from changes in the tenancy mix and the success or otherwise of individual tenants. Keep close to all of your tenants as part of a regular tenant contact program. Identify any occupancy threats or potential vacancy factors as early as possible. Risk is a slightly different factor when it comes to expenditure. Risk will occur as a result of locational factors and business volatility in the region. The suggestion here is that some locational factor beyond your control is likely to impact property occupancy and or occupancy costs. That could be through changes to local government policy, changes to roads, infrastructure changes, and natural environmental issues.
- Plant and Equipment – The age of the property and the associated plant and equipment will impact expenditure. Some older building control systems and ageing air conditioning plants can be quite expensive to run. That will then have an impact on energy consumption, and plant efficiencies. Any downtime in operational plant can impact tenant occupancy and the ability to trade. There is a fine balance between spending money on plant and equipment versus saving money in operational expenditure.
- Maintenance Contractors – The maintenance contractors involved in the property can help you significantly when it comes to understanding critical components within the building and essential factors of plant and equipment performance. They can also give you a good working knowledge of plant history and plant performance. They can tell you the strengths and weaknesses of the equipment within the building allowing for both age and existing condition. Importantly those maintenance contractors have to retain efficient performance within the plant and equipment whilst ensuring that the building complies with building occupational and safety codes. Work continually with the maintenance contractors within your investment building, and certainly do so very closely at times of outgoings analysis and budgetary performance.
- Capital expenditure items – In any commercial investment property you will find some factors of maintenance of a capital nature. That expenditure category will usually be for the larger pieces of plant and equipment that need to be replaced rather than repaired.
- Sinking fund – It is common to have a sinking fund in an investment property where certain monies can be set aside for larger expected matters of building and property maintenance and repair. Capital expenditure items may also be considered as part of the sinking fund although the monies retained within the sinking fund should always be split between capital items and repair items.
- Renovation and refurbishment – Most investment properties will get to a point in time where renovation and refurbishment is required. That being the case, a project management approach should occur in parallel with the outgoings maintenance budget. In that way the renovation project can be staged to fit within expected changes to the tenancy mix, established rental income expectations, the known property performance, and the current or upcoming financial year.
- Establishing a budget of control – The idea with the property budget and particularly that part relating to outgoings is to control the expenditure profile for the property so that you can remove risk and volatility from the net income. In that way the landlord can be prepared for known changes and upcoming property maintenance requirements.
So there are plenty of things that you can consider and work through as part of undertaking an outgoings audit. That audit will allow you to set the right targets and parameters relating to the tenancy mix and the lease strategy for the landlord.
Some agents may think that the need for listings is an uphill battle that never seems to go away. In part they are correct but the uphill battle gets easier when you follow the rules.
Confidence and systemisation are the key factors that help agents and brokers solve the pressure on finding and converting listings. In essence you must show all the people in the property market that you are the best agent in the area and with the property type. If you cannot do that now, then it is time to change a few things.
Here are some ideas to help you solve the listing battle and grow market share with real momentum:
- Relevance – It is a fact that relevance is the overriding concern that clients have when choosing an agent. The clients in today’s property market ultimately know that reaching out for buyers and tenants is not an experiment in property marketing, and real skills are required by top agents. The client will choose the best agent for the job. How do rank on the relevance scale? Why are you better than other agents and brokers? What can you do that will drive a top price or rent and better levels of enquiry to the listing? When you know the answers you have the foundation for converting more listings in your presentations.
- Pitch and present – Make your listing presentation meaningful and natural. Remove the hype and keep everything on a confident and natural basis. Remember that you are connecting with a person with property pressures; that person must be comfortable with your skills and property knowledge in ways that can resolve their property pain quickly and effectively at the best price or rent.
- Control your listing stock – When you list a property, control it through exclusivity. Any and all quality properties you list should be controlled in this way. Show the client exactly how you will comprehensively service their property if you are given an exclusive appointment. Work with up to 20 exclusive listings at any one time and in doing so, keep all your clients completely briefed on inspections, marketing efforts, and property enquiry. Information will always help in conditioning the clients to the market conditions.
- Market listings comprehensively – Make every exclusive listing the subject of a high quality vendor funded marketing campaign. Stage the campaign so it reaches out to the targeted segments of buyers or tenants, in ways that build inspection momentum.
- Encourage offers – When you have offers coming in from inspections, you have the start of the client conditioning and deal negotiation processes. Always get your offers in writing and support all offers with fully factual qualification of the parties, understanding that they can act in finalizing the contract or lease as intended.
To win the listing battle it is a matter of organising yourself to be highly committed to talking to lots of people in a regular and ongoing way. If you like it is a bit like disciplining yourself to undertake the commercial real estate business within a set of rules and guidelines. Get involved with your clients and your listings.
In commercial real estate brokerage, there will be plenty of pressures to handle and diversions to avoid. Through all of those things, you need to keep doing the deals, and on that basis you need to set some rules at a personal level.
One thing should be said quite clearly when it comes to getting things done in our industry. In simple terms, you cannot control the whole of the day; things will happen that will change your targets and actions. Be prepared for the changes, and control at least a part of your day regardless of everything that happens.
One Third of Your Day
As a general rule, you should be able to control at least one third of your day. To get more traction and leverage with clients and listings, that controllable one third of your diary should be at the beginning of the day. It should extend for at least 3 hours.
Start the day doing the things that really matter when it comes to commercial real estate. Determine exactly what tasks and opportunities will help you drive more new business and better client relations. In most cases, the cold calling and prospecting process undertaken at a personal level is exactly what you need to merge into that controllable one third of your diary.
Attract Fresh New Business In Commercial Real Estate Brokerage
Here are some rules to help you with attracting more deals and listing opportunities:
- Don’t book meetings in advance unless you completely understand and accept the reasons for the meeting from your perspective. Is there a client relationship or listing opportunity involved in the meeting process?
- Other people will want to see you or talk to you about business issues from their perspective. Connections with other people should occur at the end of the day when all other important tasks have been undertaken. Remember that you control your diary; don’t let other people do that.
- Over time, only list high quality properties on an exclusive basis. Control your listing stock through that exclusivity focus, and avoid open listing requests as they will waste your time. Only take on open listings when you know that you have a potential buyer or purchaser to match to the property. It directly follows that you should decline any client request for an open listing. Why would you offer your high grade professional property services on low-grade listings and therefore waste your time? When you understand and accept that you really are the expert agent for the local area, open listings are no longer a necessity or a requirement. Pitch and present your services in a comprehensive way so that the client can see that you are the top agent for the job.
- With every listing, pitch and present your marketing strategies to the client on the basis of a comprehensive vendor paid marketing campaign. Ensure that the campaign is well structured using unique and direct marketing processes that your competing agents may have overlooked or neglected to offer; put yourself in the marketing process. Whilst every marketing campaign will have a degree of general advertising and website listing commitment, tell the client exactly what you are going to do for them and the property to attract volumes of high quality enquiry at a personal level.
When you stick to the rules when it comes to property marketing and listing, you can attract more commercial real estate enquiries and opportunities over time. In simple terms that will allow you to attract more listing leads and commission or deal opportunity.
When it comes to working with any new client or prospect in commercial real estate, the quality of the questions that you ask will help you get to the point of the listing or marketing process effectively and directly. Direct questions will help you win new business, convert more transactions, and grow your commissions.
Many of the clients and the prospects that you talk to will initially be quite guarded or reluctant share too much information about the person situation. Trust is a part of client and prospect contact. That being said, you really do need to drill down into the real facts of the property pressure they may be experiencing. The questioning process gets a lot easier when you understand local market activities including prices, rents, availability, and time on market.
One factor to remember here is that you are the property expert for the local area and on that basis you are entitled to ask direct and meaningful questions. If the client or the prospect is reluctant to share their complete property situation with you, then you should also be reluctant to give out too much information about listings and property facts locally.
Direct Qualifying Questions in Commercial Real Estate Brokerage
Here are some questions to use to help you identify property needs and opportunities with new clients and prospects:
- How have they found the property? – Always try to understand how new people have contacted you to make the initial property enquiry. Over time you will soon see the methods of marketing that are attracting the right levels of enquiry for you as the agent or broker. Have they reached you as a result of and Internet listing, the property advertisement, signboard, or a referral?
- What do they know about the local area when it comes to prices and rents? – Some tenants and property buyers have unrealistic expectations when it comes to prices and rents. That will usually be due to their lack of understanding when it comes to the local area. If you are working with a client or prospect with that problem, you will need to show them some other properties where results have been achieved at established market prices or market rents.
- What other properties have they seen locally with other agents? Most buyers and tenants will be working with other agents simultaneously to satisfy their property need in a timely way. On that basis you can never really be sure as to what properties they have seen recently, or what they may be negotiating on right now. Be careful when it comes to the prospects you work with and the potential connection with another agent. The inspecting party, be they a tenant, investor, or business owner, may very well share confidential property information inadvertently about your listings to the other agent.
- Do they have a budget relating to property choice and negotiation? – The budget that they have set when it comes to a property purchase or rental should be questioned. There are other issues to consider as part of the budget that the prospect may have overlooked. In the case of rental, they may not have considered the recoverable outgoings in addition to the rental structure. In the case of price, they may not have considered the associated costs of contract including taxes, moving costs, and any special applications that may apply to property use.
- What is the process that will allow them to make the property decision? – Every prospect business or investor will have a process of negotiation and decision. Make sure that you are talking to the decision maker where ever possible. If you are talking to a company as a prospect, they may have a Board of Directors that need to be included or involved in the final property decision. That Board of Directors may also meet irregularly and therefore the final property decision could be delayed. When you understand the pressures of time and decision, the negotiation for your client gets a lot easier.
So you can ask plenty of direct questions and qualify the prospects people that you work with in commercial real estate brokerage. Drill down into the facts of the matter when it comes to their property selection, intentions, decisions, and needs. Take plenty of notes when you work with these people so that any information they give you today can be proven or discussed in the future.
When you get spare time in commercial real estate, the important thing is that you do something of relevance and importance to help you build market share. As a general rule, focus on connecting with new people, property investors, and business leaders.
As you get busier with listings and clients, the frequency of spare time tends to diminish. However, between meetings, or perhaps between property inspections you will always have some spare time to use in a positive way. Spend the extra 10 minutes or half an hour between meetings productively by creating connections and conversations with the right people.
Things consistently change in commercial real estate today. From time to time new leads and opportunities evolve from the relationships that you make and have with other people. Asking questions at the right time or connecting in the right way will help you build listing opportunity.
Most new business opportunities come from established relationships and ongoing conversations. It can take some months if not years for some clients to move to the next stage of property involvement or change. Help them understand that you are the right person for the job. Make sure that you are consistently available when they need you. Keep them fully briefed and appraised when it comes to regional and local property market activities, prices, rents, and upcoming quality listings.
Spare Time Checklist for Agents and Brokers
Here are some of the best ways efficiently use your spare time as a commercial real estate agent or broker:
- Make 10 direct cold calls – The telephone is the most convenient way to connect with your market whilst using your time effectively. Some top agents will deliberately set aside time every day to make cold calls, and they also make those calls between meetings. You are never too busy to make more direct calls to clients and prospects.
- Door knock some local businesses – The local business community will be a great source of property market information, leads, and change. The business leaders locally will generally know more about local property issues than you do. They will understand the factors of changes that apply to neighbouring properties, businesses, and landlords.
- Send 5 marketing letters – In sending five marketing letters per day, you will have the chance to make direct follow-up phone calls later in the week. The idea here is that the marketing letters ‘open the door’ to the conversation that you can create over the telephone. A telephone conversation should lead to help you understand future property needs with the people that you talk to.
- Contact previous clients – Some clients that you have worked for previously may soon be looking for other assistance across sales, purchasing, property management, or leasing. Bring some versatility to the services that you provide. Be prepared to convert one level of business activity to another.
- Ask for referrals – There will always be referral opportunities available to the creative agent. If you have successfully serviced a client in a previous transaction, the referral conversation is easy and logical. Contact the people that you have worked with over the years, to see if they can refer you to other people and property activity. It is always a lot easier to create new business through the referral process.
Simple strategies like these can help you use your spare time effectively and efficiently. These simple activities can also assist when it comes to identifying property changes and client needs. Use the telephone to create relevant and real contacts with the best people in your local property market.
As an agent or broker in commercial real estate, you will have pressures and diversions when it comes to establishing your career and growing market share. Plenty of challenges will arise through daily business activities and when it comes to finding new clients to work with and for over time.
The top agents of the industry focus specifically on finding new clients and the needs that clients may have when it comes to property sales, leasing, and property management. That’s when the database becomes an essential part of their business.
When the property market appears to be slowing, it can usually be due to a simple change in seasonal activity, or a business adjustment due to economic pressures. There will always be plenty of listings to attract despite property market changes.
If you focus on high quality listings, the process of business generation is a lot easier. When you take a high quality listing to the market, the levels of enquiry are significantly greater, and the time on market factors are lower. It directly follows that you can grow your market share a lot faster when you focus on quality listings.
Ways to Build Your Commercial Real Estate Market Share
So the question arises as to how you can create and attract high quality listings as part of your personal market share. The answer is relatively simple and can be summarised in the following way:
- Build Your Skills – Practice your listing pitch and presentation frequently with relevance to the local area and the current levels of enquiry.
- Know the market – Understand exactly what tenants and buyers looking for when it comes to the property type and the location. Use those factors when it comes to pitching and presenting for a listing. Show the clients that you work for how their property can be matched into the current levels of enquiry.
- Ratios and Results – Track and measure the types of enquiry coming in when it relates to your location. Build your marketing programs around the factors of attraction from incoming enquiry.
- Be Selective – Avoid taking open listings as they will generally waste your time. When you can’t control the client, the enquiry, or the negotiation, things become difficult. For that reason focus your efforts around exclusive listings.
- Vendor Marketing Funds – Support every exclusive listing with vendor paid marketing. Use that vendor paid marketing to structure high quality promotional campaigns in the local area. You will soon be known as the agent of dominance and professional marketing skill.
- Referrals and Leads – Ask for referral business and opportunities with all the clients of the prospects that you work with. There will always be leads to be actioned through the referral process.
- Success Letters – Any and all successful transactions should be communicated back into the local area through direct marketing and success letters. Tell all of the local property investors and business owners of your recent successes when it comes to sales, and leasing.
- Talk to Many – Any sale or leasing transaction will give you a real reason to talk about property management services. Over time you can convert property management business and grow the portfolio for your brokerage. In that way you will control the listing stock into the future and provide the brokerage with a further source of listings as the property owners or investors change their investments stock.
- Previous Clients – Review the sales and leasing records for the brokerage over the last five years. Revisit the clients and prospects that have been part of any transaction during that time.
- Watch Other Agents – Track and measure the activities of other brokers in the local precinct. When another agent puts signboard on a property, it is an excuse to talk to the surrounding owners.
The commercial real estate business is not complicated but it is specific and requires a systematic approach. As an agent or broker, these simple facts provided will help you get traction in your market and build a list of leads and opportunities with the local property owners.
If you provide specialist leasing services to property investors and landlords, you will need to be well versed in commission negotiations and commission standards. Many of the clients that we work with in commercial property today are quite experienced when it comes to commission and listing negotiations with agents. On that basis you should have some points of difference in your professional services to convince clients that you are the best choice of agent when it comes to solving a vacancy problem.
The message here is that your specialist services should be of substantial quality and complexity to support a fair and reasonable commission payment. Landlords will find easier to use your services and pay the required commission if you can prove that you comprehensively understand and control all of the following:
- current levels of enquiry with local tenants
- an understanding of what tenants are looking for in the property market today
- have a major market share when it comes to leasing local properties
- successfully transacted a good selection of quality leases in the local area
- have a database that is up to date when it comes to tenant movement and tenant requirements
Far too many agents think that they need to discount their commission as part of winning the listing. Nothing could be further from the truth; most investors and landlords today understand that the vacancy is costing them a lot more in loss of rents and loss of outgoings, than in any minor saving to be achieved through a discounted commission. If the landlord pushes for a low commission, they really don’t appreciate the commitment and drive that you can bring to the listing on an exclusive basis; perhaps you haven’t sold your skills sufficiently when compared to other agents.
The landlords that we serve are simply looking for the vacancies be filled professionally, that is with a good tenant at a reasonable market level rent. If you can prove that you are the best agent to satisfy the leasing requirement, then the listing will be easier to convert.
As a general rule, the leasing commissions that we negotiate should be supported by all of the following professional services:
- Comprehensive market coverage to the targeted tenant market
- One-on-one contact direct into the business community
- Online and off-line unique and special marketing initiatives to attract enquiry
- A good knowledge of exactly what tenants are looking for when it comes to the location and the property type
- A timely approach to encourage inspections and lease negotiations
- A good knowledge of lease documentation when it comes to improving the property for the landlord over time
- A detailed consideration of the special strategies that apply when it comes to incentives, market rents, renovations, and lease documentation
So there are plenty of things can be done here when it comes to providing a specialised and professional commercial leasing service. If you can prove that you actually provide all of the points mentioned here, it will not be difficult you to convert more clients and listings as part of the lease marketing process.