There are many different characters in a successful commercial real estate sales team. That being said, the characters all require management and direction. Rarely will you find a good sales team without its challenges. It is the job of the sales manager or agency principal to bring the best performance out of the team given the characters and the skills of the individuals.
A healthy sales team can be built around the following strategies:
- Make sure that you have a good mix of skills in the team relating to your local area and property type. Certain properties require particular skills across sales, leasing, and property management.
- Every sales team will have its strengths and weaknesses. Understand what they are and work with them or through them.
- The sharing of skills between individuals will be helpful. It is a good process to introduce trainee cadets or sales cadets into the team structure. The top performing agents can then be the benchmark or the learning leverage to help new people get into the industry and move ahead.
- Your sales territory, town, or city is likely to have specific requirements of property knowledge, negotiation, marketing, and documentation. Merge a training process into the weekly sales team meeting so that everyone can learn the critical skills and strategies needed to put successful sales or lease transactions together.
- Practice helps everyone improve. Role playing and team discussions will help everyone understand the pressures of the market and the changes to enquiries. Nothing remains the same in our industry. Throughout the year there will be plenty of changes to adjust to when it comes to rentals, prices, documentation, methods of sale, and methods of lease. The right choices and training will help the team achieve more success from the local area.
- Accountability is a big issue in commercial real estate today. Top agents take action and understand the need for accountability. Every member of the sales team should be held to task when it comes to things needing to be done, and information to be shared. A top sales team is one that works together and wins together.
- Personal budgets and performance plans are part of the commercial real estate process. Every agent within the team should have a realistic budget set within their area and skill base. Every month the performance budget should be checked against the actual results. When any weaknesses exist in the team they can then be quickly addressed; don’t let poor performance exist for too long without taking action to fix the problem.
- Head off any conflicts and disputes in the team early. A poorly performing agent or uncooperative agent can soon disrupt team performance. A degree of competition and achievement between the sales agents is always useful, but lack of cooperation and respect is not needed.
- Leadership is a big issue when it comes to the performance of the team in commercial property today. The leader of the team should have a complete understanding of property market conditions, negotiation standards, business processes, and team performance. There must be a good degree of respect in both directions when it comes to the team leader and the members of the sales team.
- Any individual sales agent or broker, they should be tracking results in commissions, listings, meetings, and prospecting. They should also be defining the ideal client and customer to focus on. Over time the quality of listing will allow market share to improve. Ask questions of every member of the team to ensure that they have the right targets and results in mind.
- Administrative activities in commercial real estate today can be quite demanding and intense. On that basis it is wise to have administrative support people to back up the sales team. In that way the successful salesperson can get into the market more effectively and find more leads and opportunities.
- Time management is something that all agents should personally control. Every day should be effective and optimized for find new listings, and creating client contact.
Given all of these things, there are plenty of things to do in helping a property sales team improve over time. Commercial real estate today is a changing and evolving market with the pressures and opportunities across sales, leasing, and property management. Help your sales team to develop the skills and penetrate the market at a high level.
Relevant market data in commercial real estate can help you with property presentations, prospecting activities, and negotiations. As the real estate agent or broker in your local area property knowledge and information will help you close more listings and facilitate more transactions.
Whilst most clients think that they own a high quality property commanding a good price or rental, the facts of the matter can be far from the truth. Local property market information will help you position the client’s property for better levels of enquiry and negotiation.
Here are some facts that will help you stay ahead of local property market activity:
- Track the number of sales occurring in the local area by property type. Focus on the local area and your property specialty. Determine the averages that apply to sale prices per square metre or per square foot. That information will be helpful when it comes to pricing other listings.
- Watch the trends that apply to leasing and renting commercial and retail property. Industrial property may also feature as part of that analysis. Leasing strategies and rental levels provide the basis for property investment today. The ratios between net rent and property value provide a yield or capitalization factor. That number will change throughout the year based on the supply and demand locally and within property types. Oversupply will typically see prices fall against rental income. That will improve the yield ratio to encourage any sale. In undersupply situation, prices typically rise against passing income and rental. That then produces a lower yield for the property investor. It directly follows that you should track supply and demand factors that exist within your property type and within your town or city.
- Market rentals will shift and change throughout the year. Over an extended period of time you will soon see patterns to any rental growth and leasing incentives. In any oversupply of vacant space you will see that the incentive levels will grow to attract more tenants to a property. The levels of incentive will conversely fall away as the vacancy levels decrease in the local area. Look at the patterns that apply to market rent within the property type and your specialty. Understand the reasons why tenants lease a property today locally.
- There will be changes to the business community regionally and locally. Those changes will have impact on business sentiment and occupancy costs. Some segments of the business community will be more active and successful when it comes to levels of trade and sales. When you can identify a successful business segment, focus your prospecting efforts within that segment and with those businesses. Any successful business over time will require relocation or expansion to other property. Get to know the local business owners for this very reason.
- New property developments come and go from the market. The ratio between supply and demand, together with the availability of vacant land locally will activate some property developers to consider new projects. A property developer will only consider a new project or building construction when they can see that the demand exceeds future supply. They will also look for reasonable levels of profit from the project based on expectations of rental and price.
So you can see the reason why it is necessary to stay ahead of market activity in commercial and retail real estate. Property trends in rentals and prices will help you see new business leads and clients to serve. One other key factor to remember in gathering property information is that of specialization. As an individual agent you cannot serve every market and every type of client. Specialize personally within a segment of property and within a location so that you can become a top agent.
Commercial real estate brokerage is something you can be very passionate about. There are plenty of opportunities to work on and convert if you are an agent or broker. The property market is changing constantly, and you can use this change to convert more listings and commissions if you watch what your market indicators are doing now and how they are heading.
Here are some facts:
- When sales are heading up, you can work your database of property investors and owner occupiers
- When leasing is active, you can connect with local tenants and business owners that occupy leased premises
- Sales and leasing activity can lead to property management appointments
- New property developments will lead to project sales or project leasing, and that can mean lots of commissions.
In these four segments of the property market, there are things that you can work with and turn into opportunities. It is simply a matter of working the people that you know and growing your database of new prospects.
Here are 5 definite reasons you should get more active and passionate about our industry and property market:
- Specialisation – The clients that we serve require agents that understand the local area and the property type. If you look at the top agents in the market, you will soon see that they specialise in something and are known for doing so. Usually it is in a property type. The clients are attracted to those top agents because they want to work with the best of the best. How do you rank in that assessment?
- Referral business and repeat business – From one successful sale or lease transaction, you can always find the seeds of another opportunity. Ask the questions of the right people to find those new leads and business opportunities.
- Reward and income – It is well known that the commissions that you can achieve from a quality property sale or lease are generous. That being said, commissions are the reward for a ‘job well done’. Improve your quality of services and property specialisation; the commissions will then be easier to achieve.
- Geographic area – Get to know all the property activity and opportunity in a defined area. Don’t spread yourself too wide in the market. Concentrate on a region where there are properties that generate sales and leasing ‘churn’.
- Agent competition – Whilst you may have plenty of competitors locally, most of them will be a bit ‘ordinary’ when it comes to professional property services and market coverage. Seek to improve your relevance as an agent or broker locally. Show the market why you are the best agent to help with any property challenges.
You can do things here with these 5 facts of the property market today. Are you up to the challenge? Formulate a system to work to every day that can help you grow your skills as a commercial real estate agent.
In commercial real estate there are unlimited opportunities for real estate agents to earn good income and grow market share. In saying that, the results achieved are all driven by personal effort.
There are 3 separate skill bases or services to the market and each are quite specialised. Decide what you like do and what will give you the most reward (physical and financial). There is no point in attempting to do something that you do not understand or like; that will be too personally restricting.
So the 3 skill bases are:
- Commercial and investment property sales
- Investment property leasing
- Commercial and retail property management
Some agents will choose to work on both sales and leasing. That is a good thing as the skill bases are similar and they are linked when it comes to working with clients. A leasing client today is likely to be a sale or purchase client in the future.
The skills required to be a property manager are a bit different, and the long term target when working with property management clients is that of providing professional service, and not just a single deal (as in sales and leasing). Property managers for that reason are ‘deal oriented’ but ‘service strong’. Building relationships over the long term is really what professional property management is all about.
If you have chosen commercial real estate as a career for yourself, then understand your character and its best ‘fit’ for the tasks at hand. You can work in any or all of these 3 segments or sections of the market within your agency. Choose the section of the industry that is best for your skills, knowledge and business style.
To move ahead in our industry it is best to prepare a set of goals and a small personal business plan. That strategy will help you with progress and adjustment during the year. Here are some more tips to strengthen your push and direction as a real estate agent:
- Motivation – You may have heard a lot about motivation and its requirement in any career. In our industry it is a very personal thing. Self-belief is a good thing, but action taking is far more important. Every day you will need to do specific things that can be a challenge. On that basis your levels of personal motivation must be significant; no other person can make things happen for you.
- Goals and targets – When you know the section of the market that you are working in together with your location, your goals can be set based on not just the personal performance that you are capable of, but also the ability of the market to give you opportunities. It directly follows that you will need to know your market and its growth factors and possibilities. Research is required to understand the history of local sales, leasing, and property management (depending on your skill base). Make sure that your town or city has the growth possibilities that you are looking for at a personal level. Ensure that you know how you will be tapping into those possibilities.
- Putting your plan in motion – As with any plan certain actions will be required. Every day you will be required to focus on new business, new people, and new properties. That is in addition to everything else that happens with current clients and properties. The most successful people in our industry are those that spend a good part of every day focusing on prospecting for new business. From the earliest stages of your career, set this rule in motion. Watch how results come back to you and track your results. Make adjustments in your prospecting and cold calling so you are growing your business in any property market and at any time.
These three factors are perhaps the most important to help you get traction and market share as a broker or agent. Look at what you are doing today and make adjustments where necessary. Strive to improve on a daily basis in commercial real estate agency.
When it comes to selling or leasing any commercial, industrial, or retail property, the more specific that you are to the location and property the easier it is to attract attention and negotiate. To do something with this you need property specific data. It is very difficult for the negotiating party to refute or dispute valid information from the local market.
So, the message here is quite clear that you will need to create and maintain relevant property information that you can use in any negotiation locally. Here are some ideas to help you with that:
- Track the activity of prices within your property speciality. The prices can be related to land, improvements, and location. Take those numbers and trend them over a period of time using a simple line or bar graph. The visual approach can be very powerful when it comes to any client or prospect presentation.
- When it comes to selling any property, there will be a preferable method of sale. That sale method will be based on industry results and activity, the property type, and demand. Select the best preferable method of sale when it comes to every property presentation and sales pitch. Ensure that the client clearly understands your reasons for that particular choice. Use graphs and charts to show them how one method of sale is proving to be more successful than others.
- Given the previous point, you can and should track the levels of rental that apply within the property type. Rental variations can be and usually are a bit more challenging from the analysis point of view. You will need to address and assess the rental types such as gross rental, net rental, incentives, and market rentals. Understand what is leasing and for what reason. Business sentiment in the local area and your town or city will have a lot to do with leasing enquiry and lease conversions. What types of leases are being negotiated today and for what reason?
- Understand the supply and demand for investment property and business premises. To track that activity you can monitor the new planning approvals being processed at your municipal council. Also look for any changes to property zoning and property use.
- The supply of vacant land will have an impact on the creation of new property developments. New property developments are considered when the population and the business demographic are within a growth phase. In some towns and cities, the supply of vacant land is restricted. On that basis a change of property use and redevelopment will be more likely. Staying close contact with property developers and the business community to identify any future needs and changes within property demand.
The property promotion process is quite specific if you want to win an exclusive listing. You can show the client quite clearly how specific that is when it comes to their property challenge with any sale or leasing. Use local market information and comparable evidence through charts, graphs, and historic trends to help prove your point.
When you specialise within a property type, this information display is quite important. The specific approach to the property type in any listing presentation will help you greatly in conversions.
Some real estate agents fail in commercial real estate brokerage and they do so rather quickly due to a lack of focus and the right personal development. That doesn’t have to be the case. If the right personal skills and focus were developed early in their careers, results would come a lot easier to most of those agents.
We should define what ‘results’ are now so that this important topic can be handled and solutions set. Results for most commercial real estate agents are defined in the following terms:
- Quality exclusive listings
- Better market share of controlled listings within their sales territory
- A good database of clients and prospects
- Referral business from existing clients
- Closed deals in sales and leasing
- Growth in commissions
The agents that struggle in the industry usually have weaknesses in most if not all of the categories. Scary isn’t it?
Most of the agents that drop out of the industry will do so inside the first twelve months of their career; or they will move brokerage a few times to extend their ‘stay’ in the industry for a couple of years. If those agents had taken the time to develop the right levels of personal focus on growth of their business, things could have been a lot different. This focus should have started immediately a person enters the industry. The ‘clock is ticking’ as they say.
In the industry it is not so much a matter of an agent doing a lot of things each day to stay ahead of the demands of the job, but rather doing a few things extremely well that will help drive more business and market opportunities.
When you break down the real estate agent or broker role into categories or skills you will see a list that looks like this:
- Researching property owners, business leaders, and property investors to talk to
- Prospecting within those groups for potential new business and listings
- Presenting and pitching for listings and sales and leasing opportunity
- The listing process with a big focus on exclusive listings
- Property inspection skills across specialised market segments
- Marketing skills to reach the target audiences for each listing directly and effectively
- Negotiation skills for the property type and the location
- Closing skills and the accurate documenting of sales and leasing deals
- Building positive and valuable relationships with clients and prospects for the long term
If there are problems in any of these areas they will impact the success and momentum of any agent. That is where training and practice comes in very handy.
If you look at the list again and consider the factors involved you will also see that items 1 to 4 are likely to be far more important than the others. Most agents fail in the industry because they do not focus enough on those four items and systemise their prospecting and pitching relevance for new business; they then struggle with building market share and any relevance as a real estate agent.
It is a fact that most towns or cities have an abundance of properties to list and many agents or brokers to provide those services. The best agents win a larger slice of the new listing business simply because they are so good at items 1 to 4 in the list. Are you up to the challenge?
When it comes to getting a job in commercial real estate brokerage, you need to understand a few things about the market, the brokerage itself, and the client base. Some brokerages only serve a particular marketplace or customer type. Make sure that the match is clear and precise to your property type and market segment.
Here are some tips to help you with securing a rewarding job in commercial real estate today:
- If the brokerage is part of a broader franchise structure or if they have many salespeople within the one team, you will need to know how business is shared between offices or members of the team. Ensure that you have the flexibility to work the right areas and the property types that you can relate to. Also ensure that the rules of fairness apply to listing distribution and commission breakdowns.
- There are many systems and costs associated with commercial real estate today. One of the most important systems will be that of the database. As you grow your market share and client contact process, the database will grow. Ask questions about the ownership of the data and what will happen if you leave the business in the future. Can you take that data with you?
- Given that you will be talking to a lot of clients and prospects on a regular basis, opportunities will arise in sales, leasing, and property management. Every new client that you introduce to the brokerage should give you the opportunity of a trailing commission if the client converts to using any services of the office and any of the specialised staff. On that basis understand the referral fees and commission bases.
- Will you be offered the support of any of the administrative staff within the office? There are a lot of things to do when it comes to marketing, client administration, listing processes, and deal documentation. Some of those things will require your involvement; administrative support will be of high value to you as a broker or agent. Will you be expected to pay for that administrative support? Will the cost be taken from your commission in some way? Ask questions about the support structure within the office.
- Commission structures within a real estate office can be varied and a reflection of the skills and achievements to date of each individual. This means that some salespeople will be on different commission rates based on results achieved and personal skills. Your commission rates will depend on the value that you bring to the business currently and into the future. Seek out a sliding scale of commission that increasingly rewards you over time as you achieve better rates of client contact, exclusive listings, and closed transactions.
- The zone or the territory that you work within may have some limitations. Make sure that you get the necessary flexibility to attract new business in the property type that you understand and know. There are differences between office property, retail property, and industrial property. What properties can you work on and within what geographical zone? If you are required to share a listing with another broker or agent within your team, how will the commissions be split? These ratios of commission will need to be negotiated at the beginning of your employment.
So some of these questions can help you establish your market share and grow your real estate business. Don’t jump into a new employment arrangement with the new brokerage without due care and regard for the terms and conditions of employment. All the hard work and the prospecting that you are about to do should be rewarded fairly from the deals created.
Look for the fairness in the benchmarks that are applied across different agents and different brokers. Make sure that you can achieve the results and the targets that are to be set for you as a professional in the industry. Understand that the marketplace can provide you with the new business opportunities providing you work hard and with systemised focus. That’s what top agents do all the time.
In commercial real estate brokerage there are plenty of clients to choose from when it comes to sales, leasing, and property management activity. In saying that, it is important to understand the ideal client profile for your brokerage business. Some clients are better than others. Understanding the differences will help you focus your prospecting efforts in the correct way.
The suggestion here is that you should be selective when it comes to working with some clients. Understand the ideal client profile that will help you grow your listings and commission opportunities.
Here are some ideas to adopt in this process. You can add to the list based on your property location and your property speciality:
- Review your area and your sales territory so you understand exactly how many properties exist within your target market. There will be differences in numbers between office property, industrial property, and retail property. Some of your target properties will be widely spread and will therefore require complete understanding when it comes to prices and rental variations.
- Look at the history of the area to see what has been selling and leasing over the last two or three years. You can add to that assessment the factors of supply and demand as they relate to your area and your city. Is your market segment growing or contracting? How can you adjust to these fluctuations? What levels of commission are available for future sales and leasing activity? Focus your prospecting on quality clients and quality properties.
- The best customers to work for are those that can bring you repeat business over time. That business can be in sales, leasing, and property management activity. Some of the best clients to work for include established property investors, larger companies and corporations, and franchise groups. Get to know the right people within each targeted segment. Understand who the decision makers are when it comes to each investor, company, and location.
- The suggestion here is that you treat your customers and prospects differently. Those high value customers that you have identified for future business should be entered into a special segment of your database. They should receive special treatment when it comes to contact and service. You will also be approaching them more frequently with relevant market updates and changes within the industry.
- Some clients will require particular property types and improvements. Special understanding is needed when it comes to identifying the right properties for them to purchase or lease. The same can be said when it comes to the timing of an acquisition or relocation.
So there are plenty of things to do here when it comes to for client connection and prospecting. The choices that you make of it comes to each client in your segment of the market will help you greatly with future leasing and sales opportunity.
Get to know exactly what the client requires and tap into that opportunity over time. When you do this correctly, many of the transactions you create will occur off market and away from the pressures of agency competition.
Top real estate agents are easy to identify. They do the things that other agents avoid; they know how to tap into opportunity and the right clients. The good thing here is that top agents a far fewer in number (2 in 10 is a typical ratio); there is plenty of room at the top of the real estate market for those agents that strive to get there.
So what do these top agents have that other agents do not? I could summarise it really simply and say that it is ‘commitment and the right processes’. They know what to do and they do it every day. Over time they understand what works for them and they do those things every day.
Here are some ideas to help you get started on the road to being a ‘top agent’. Whilst I will give you a basic system here and now, take it and refine it as you progress. Adjust the system to your market and your property type.
- At least one third of your working day must be devoted to prospecting. That ratio should not change and if anything it should increase towards 50%. Track and measure your prospecting efforts. Understand what works for you and how you can do more of it.
- How you think will impact what you do on a daily basis. On that basis protect your thinking and your processes from the criticism of others. You are the person in charge of your business day.
- Watch what the top agents are doing. Can you replicate their processes or improve them? Success as an agent comes from doing a few specific things very well; not lots of things in a random way. Determine the 5 things that will help you drive your business forward. Decide how you can do those things every day.
- Quality properties should be converted to exclusive listings. When you control the listing stock the enquiries will come to you. Whilst it is good to know lots of other people that require a property to buy or lease, the top agents focus on listings. Find and convert the listings.
- You should have a prospecting system that is easy to implement and stick to every day. Do the required call research each night so you are ready to make the cold calls the next day. Don’t waste prospecting time on research that can be done ‘out of hours’.
Find out what people are doing with property now and into the future. A good client contact today can be a valuable client in the future. Build on your contacts so they trust and remember you at the right time in the future. That’s how you become a ‘top agent’.
When you start your career in commercial real estate brokerage, there are many things to consider and action. The first six months of personal activity and learning will be really important to setting the foundations for better listings and market share.
One thing needs to be said here; most of the valuable listing and commission business will only come to you from personal effort and actions on a daily basis. Very little comes to you from the agency that you work for. It’s a personal thing.
So what is the overall rule here? You must know a lot of ‘property related’ people and they must respect you as a top agent and skilled business person. From that point onwards you have something to work with.
To achieve this basic rule and strategy, a personal plan is required that you can keep to and use as a basis for growing market share. Here are some tips to help you get started in your career as a broker or real estate agent:
- The first six months of your career must be planned so you can get to know your market in all ways possible. The best people in the industry are skilled and specialised. Focus your efforts into a property type and a precinct.
- Review your area comprehensively. Look for information and trends about sales, leasing, prices, rents, new developments, and property owners. Check out the properties that are selling and leasing and the results that they are achieving.
- At the earliest possible time, start prospecting and talking to new people. It will be difficult at first, but practice and action will help you improve in many ways.
- Some properties and precincts will have more activity than others. It is useful to understand where the property deals are happening and why that is so. Soon you will see the types of properties that are likely to produce better deals and commissions over time.
- Computer technology and online tools today can help us a lot when it comes to communicating and tracking what we do. Use a variety of tools that can keep you organised and detailed on things that matter.
- Set some targets that you can track. What are your expectations regards commission income, listings, clients, meetings, and market share? To know those things you will really have to research the local area and understand exactly who and what you are up against. Your competitors will be doing things now that may attract the deals and the clients their way. If you are going to compete, a strategy should be built from ‘current market conditions’.
Given all of these things, do you know what your ideal client looks like, and where they will be coming from? Do you understand how you will attract those clients to use your services? Build your skills in all ways possible. You will find that the top agents of the market have exceptional skills in certain things. Decide what you will need to do to reach that level of domination.