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Finding More Clients and Properties in Commercial Real Estate Brokerage

In commercial real estate brokerage, what do your customers look like, where are they located, and what do they want from you?  Why would they contact you?  They are interesting questions; when you know the answers, you have the central focus of your prospecting model.

One of the biggest mistakes in commercial real estate is for an agent or a broker to prospect generically over a large area with little focus.  The prospecting message then becomes clouded and non-specific.  A message of that type will have little attraction to the target audience of local property investors and business owners.  So it is clear that a few decisions need to be made regards the clients and prospects that you want to work with.  I like to call it a ‘customer commonality’ process.

To get some direction with your customer focus and prospecting model, consider the following ideas and topics.  See how they can be merged into your client contact systems:

  1. The best prospecting model involves personal follow up and contact.  Anything that you send out by way of correspondence, marketing, or brochures, needs to be followed up with a telephone call.  It directly follows that your letters sent and brochures dispatched should be in suitable numbers for new personal contact and follow through.  The process should be repeated every 30 or 60 days.
  2. Understand the activities in the market today.  What pressures are occurring on property owners and business leaders?  Where can you offer the best levels of assistance and professional service?  In a town or a city, there are likely to be a number of answers to these questions.  For that reason you should consider separate prospecting models and messages for different market segments and different market locations.
  3. Review your area geographically so that you can split your prospecting efforts up into groups of buildings, groups of properties, and types of people.  This then helps you significantly with the marketing message and central prospecting concept.  It is quite clear that a generic prospecting letter is of little use and is highly likely to be put into the rubbish bin rather quickly.  To lessen this chance of any failure factor, make your marketing messages quite specific and of interest and value to the person that you are connecting with.  Provide some information regards the market, recent listings, prices, rentals, or industry changes.  Whilst keeping the letter or the correspondence simple, a few dot points will capture the interest of the reader.
  4. When you break your customer base up into a number of market segments, you will see that there are common factors and leads to be exploited.  They may be associated with market trends, property activity, regional changes, and transport issues, property zoning, and planning matters.  When something happens regionally that can have impact on property owners and occupants, you have an opportunity to make direct contact with your database in a relevant and real way.  That’s what professional prospecting is all about.

In saying all of these things, it is wise for you to focus on a particular property type within a location.  In that way you can relate specifically and accurately to the variations in price, rental, market interest, and the supply of new stock.  The commercial real estate industry is not difficult; however it does require specific focus and property speciality.

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Match Clients to Properties in Commercial Real Estate Brokerage

The longer that you work as a commercial real estate agent or broker, you will soon understand the priorities of property choice and performance when it comes to certain clients and prospects.  With that knowledge, you can match clients to properties and create transactions off market.

So every client will have certain priorities when it comes to property choice and investment performance.

Consider the following factors and opportunities:

  • The income from a property may have allowances for growth given the rent review profiles within each lease document.  Some leases are better than others.  Some rent review strategies are also more effective than others when it comes to rental income performance.  Understand the differences between the available rent review strategies and how they can be shaped within a lease negotiation.
  • A new lease today with a lower rental start point can be shaped into a substantial income cash flow over time; that is providing you choose the right tenants and the appropriate rent review strategies.  A good lease negotiator will understand the important factors of rental positioning and growth at the time of lease negotiation.
  • Diversification can be an advantage when it comes to property portfolio ownership.  If the client focus for a portfolio is too much within the same property type, the client can open themselves up to income instability when the market changes.  The threat of a vacancy can be a real problem when the market shifts and changes.  So there are different property types to choose from including office, retail, and industrial property.  There are also different locations within a town or a city all of which can provide alternatives and opportunities as the market changes.  Look at how you can provide your client with portfolio stability through property diversification.
  • Review your area for properties going through change in lifecycle due to age and redundancy.  The older properties may soon need a refurbishment and or material change of use.  That can then lead to a variety of redevelopment, leasing, and sales opportunities.
  • You can sometimes match the right people to the right circumstances; as an example you can bring a property developer together with a property investor.  You can add to that equation a local financier with appropriate funds.  You then simply need to add a suitable property to the relationship, and you will have the recipe for a potential property development and major project.  Multiple sales and leasing opportunities can then follow.
  • Some clients are very skilled when it comes to property improvement and repositioning.  They understand how to take a difficult property and turn it into something that is more successful and highly marketable.  It is not unusual for a client in that situation to turn a property around and resell it within a period of 5 to 7 years.

 

A top agent tends to work with clients and prospects in different ways.  To do this, it is simply a matter of understanding the needs of the client, the opportunities of the market, and the different strategies that can be applied to bring a deal together.

There is nothing more rewarding than to put a deal together off market away from the pressures of the competition and the scrutiny of other agents.  When you announce the deal to the world through an editorial or press release, the other agents are soon recognising that you are the top agent with all of the contacts.

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Time Management Tips for Commercial Property Managers

If you work in commercial or retail property management, you are likely to be very busy most of the time. That being said, the problem needs to be controlled.

It is interesting to note that many professional property managers over time become quite frustrated with the momentum that they are trying to achieve in portfolio management. The reason for frustration usually centres on their inability to control workload and portfolio requirements. The variables of clients service and portfolio activity place pressures on the working day.

It is worthwhile noting that many property managers are overloaded when it comes to the number of tenants and the number of properties. Perhaps the problem stems from the requirements to satisfy a certain level of fees in each case. If you want to build some efficiency into your property management department and within your career, it is necessary to strike the appropriate fees for the property management tasks involved and the clients concerned.

Here are some tips to help you get your career back on track:

  1. The role of a property manager is a bit different to that of a sales or leasing executive. A property manager has to control and process a lot of documentary issues, lease negotiations, and matters relating to property performance. That requires paperwork, processes, checking systems, and planning. It is best to get the paperwork done at the beginning of the day between 8 am and 11 am. In devoting 3 hours to intense paperwork, your mind is fresh, and more inclined to deal with the issues.
  2. One of the biggest errors that is all too common in the industry occurs when the managers are handling emails first thing in the morning. The only reason you should look at emails at the beginning of the day is to see if any urgent issues have arisen overnight. Everything else in the E mail inbox should wait till the later part of the morning or the day. Don’t let the e-mail system divert you from the requirements to get essential paperwork done. Understand your priorities when it comes to property performance, client service, and tenant contact. Some of those things can be shifted and prioritised.
  3. At the end of every month, the property performance and reporting requirements are extensive and time consuming. It can take many days to compile the necessary property reports for the clients that you serve. Don’t cut corners when it comes to checking reports and the financial information from each portfolio. Take the time to ensure that the records are correct and accurate relative to the tenancy mix, the leases, and the clients instructions.
  4. Stay on top of tenant leasing issues and the critical dates that apply to every lease document. The best way to do this is to monitor the critical dates at least 18 months out. That then gives you plenty of time to react to the upcoming events.
  5. Some matters of property management can be quite urgent with maintenance being one of them. Be aware of the maintenance tasks that can involved personal injury and risk. Have an emergency response process to implement when something of a major concern arises within the physical property relative to maintenance.

When a property manager believes that they are in control, the quality of work will be higher, and the clients will be serviced more effectively. There is a big difference between being reactive and proactive when it comes to commercial and retail property management services. The best fees for service come from a professional manager working to the clients property performance plan and targets.

You can get more tips on  commercial property management in our newsletter right here.

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5 Action Steps to Client Contact in Commercial Real Estate Agency

In commercial real estate agency the clients that we serve are a critical part of the market share that we build.  The relationships that we create with those clients should be growing within a system and strengthened with relative property market content.  This is a very personal process for each and every salesperson or agent.

The cycle of commercial real estate activity is relatively long.  It can be some time between lease or sale requirements for the average client.  This then says that a client contact cycle and system should be ongoing to a plan and a process.  It could be months or years before the client is ready to make or take the next action steps in a property transaction.  Over that time the relationship you have with that client or prospect needs to be nurtured and strengthened.

To be a top agent your clients must understand and respect your skills; you must be the ‘go to person’ when it comes to getting a result with a sale or lease situation.  When you specialise in a property type and location, this is relatively easy.

Here are five action steps to structure a client contact program in your agency structure:

  1. Review the clients account history, their property needs, and the potential new business potentially coming from them in the future.  As part of the review, consider the variations between sales, leasing, and property management needs.  You can also obtain fees from project leasing, tenant retention planning, special lease reviews, and renovation or refurbishment strategies.  You will need full and complete details relative to the clients property ownership portfolio, and the lifecycle relative to property holding.  Understand the pressures that apply to the portfolio including property age, tenant volatility, income potential, and lease expiry.  All of these things can lead to professional service requirements and extra fees.
  2. Given the previous point, determine the reasons for ongoing contact based on the clients requirements and the fee potential.  Every contact call, meeting, and direct mail piece should be consistently focusing on the biggest need that you believe applies to the client and their portfolio.  Create consistency in your contact plan by including this determined need factor.
  3. At a minimum or basic frequency, you should be contacting all of your clients or prospects at least once every 90 days.  When you know that the person is moving to some property activity the contact cycle should shorten and be much more specific.  It is a known fact that the ongoing contact made to a single client in this way will build agency relevance and immediacy.  After the second or third contact to the client, you are likely to get better conversions to new business activity.  The organisation behind this process should involve a database with suitable flexibility.
  4. The client contacting process or system that you create should involve dialogue practice.  Call contact and meeting activity will be a daily process.  You can improve your conversions in both of these situations through prospecting and dialogue practice.  Determine the weaknesses that you have when it comes to dialogue and presentations, then take some steps to improve those weaknesses given the prevailing market conditions.
  5. Gather some up to date market information relating to the local area and particular property types.  Display that information in various ways including charts, market trends, photographs, and benchmarking.  This information will give you substance and confidence when it comes to connecting with your clients and prospects.

A client contact strategy in commercial real estate is a very specific process.  If requires planning and consistency.  Over time you will find that the process will help you establish a stronger market share and generate many more quality listings.

 

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Commercial Real Estate Agents – 6 Tips to Improve Your Sales and Leasing Documentation

When it comes to strengthening your commission and listing opportunity in commercial real estate agency, you really do need to establish systems and processes that can support client contact and transaction accuracy.  Attention to detail will be part of that process.  Your knowledge of property type, documentation, fiduciary obligations, and client services are all critical to building your business professionally as a top agent.

It is interesting to note that many agents have been and will be sued due to negligence, documentary omissions, and poor professional services.  There is really no place in the industry for poor quality agents with below standard business practices and knowledge.  Over time their shortcomings in skills and knowledge will unravel their market share and can have an impact on future business for the agency.

So let’s say that you do have some shortcomings at the moment when it comes to documentation and professional services.  If that is the case, you do need to consider how your knowledge can be improved and skills developed.  In this industry, we never stop learning.  Over time you come across so many new and unique issues that require personal development.  Every property type can be regarded as unique when it comes to skill requirements.  Build your knowledge wherever you can through relationships and education.

Here are some rules to help you with strengthening your property transactions and opportunities:

  1. Keep a paper trail that is accurate and up to date with every property transaction.  It is surprising how frequently people will misunderstand or forget what has occurred relative to a verbal conversation.  You do need to back up your actions and transactions with a solid and accurate paper trail.
  2. Any verbal instructions or agreements should be documented in writing.  Whether that be in a legal document, an e-mail, or a letter you will need to make the right choice for the circumstances required.
  3. The marketing of a property should be fully approved in accordance with the clients instructions prior to commencement.  Get all of the draft advertising material approved by the client prior to lodgement and activation.
  4. Before you act on any property listing on behalf of the client, ensure that you have a legally binding and correct listing appointment document.  Some agents will ‘bend the rules’ and get the listing appointment signed later on; they then find that the client will avoid paying commission at a later stage.  There are also some big questions that arise here when it comes to risk and liability when inspecting a property that you have no valid listing appointment over.  Without a valid listing appointment, you cannot quote a listing.
  5. Understand the clients instructions from the outset.  Follow their guidelines and their targets when it comes to pricing, rental, marketing, and inspections.  Keep the client fully up to date when it comes to the latest property activity and the status of any negotiation.
  6. Ultimately you will be moving a listing to a contract or lease situation.  Some properties are quite complex and the associated documentation will be similarly so.  That being said, you do need to understand the complexities of the document required; when in doubt involve the appropriate legal specialists to help with the documentation.  Every document created as part of a sale or leasing transaction should be valid and enforceable.  In that way you protect your commission and client relationships.

You can likely add to this list based on your property type and location.  The clear message here is that professionalism is a key component of your commercial real estate business.  Strengthen your skills and improve your processes.

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Being Adaptable as a Commercial Real Estate Agent Wins More Business

In commercial real estate agency, you should be adaptable to the challenges of the property market today, and the requirements of the client.  This is really easy to do when you are a specialist in a property type and a location.

As a specialist in a property type and location you will or should understand the factors of pricing, rentals, tenancy mix, time on market, marketing, and negotiation.  You are the specialist that can take over the clients property challenge and turn it into a successful property outcome.  Specialization is the key to the process.

The clients that we work for require the right information and strategically relevant skills on the part of their agent.  If you pitch and present your services correctly, your conversion to an exclusive listing will be quite easy.

Those agents today with an abundance of ‘open’ listings are those agents that have not sufficiently branded themselves as experts in the local area.  They have no real point of difference when it comes to pitching their services.  The clients they work with can see no real benefit in exclusive listing with a particular agent.  If you want more exclusive listings, you will need to solve that perception.  I go back to the point that specialization as a property agent is essential to the process.  Top agents win more exclusive listings and that is the rule not the exception.

To be adaptable as a specialist real estate agent means that you have the necessary skills and the information required to handle the following situations comfortably:

  1. A client requires a vacancy in a property to be leased efficiently and effectively.  The tenancy may have been vacant for some time.  The client therefore requires innovative solutions that apply to the leasing process.  They need that vacancy filled as soon as possible.
  2. A vacant property requires repositioning in the market so that it may be sold or leased.  The pressures of the prevailing market conditions and the zoning requirements set the guidelines for the target market and the efforts that you need to undertake.
  3. At commercial or retail property has reached the end of its economic life given its current and present usage.  On that basis the property needs to be subjected to a material change of use and redevelopment.  As part of that process you will need to consider the approvals and strategies behind local planning and development.
  4. The client’s property may be under-performing from an income perspective.  You should know how to review the tenancy mix, lease profiles, rental strategies, lease documentation, and outgoings recoveries.  On that basis you will soon see the discrepancies when it comes to income recovery and growth.  You can add to this assessment the rules and legalities that apply to rent review negotiations, lease option negotiations, tenancy relocations, and redevelopment alternatives.
  5. The client’s property today may be a future sales opportunity.  In leading to that sales situation, they may have challenges that apply to the tenancy mix and the income profile.  Over time you can help them with income modification and capital growth.

You can look at a property from a number of different perspectives.  It may be vacant, unimproved, leased, or vacant.  The value for the property can also be determined in a number of ways based on the identified potential and the prevailing market conditions.  To assess the value of the property, you can cross reference two or three methods of valuation or appraisal to see what will work when it comes to any future listing price and marketing opportunity.

The top agents in a commercial real estate agency today are very adaptable.  They understand how to move across the requirements and changes of the market.  They know how to match the client and their property to the prevailing market conditions.  You can do the same.  Get to know your market and how it is changing and growing.