In commercial real estate today, you will find that the competition and the market can become quite frustrating unless you are taking sustained and consistent action each and every day. The agents that rise to the top of the market are those that have an action plan and a business strategy.
It stands to reason that the best commercial agents and brokers have the best business plan. Certainly that is the case; however their business plan is supported by business activity and consistent focus.
Here are some strategies to help you with establishing your market share and business activity. You can modify the list or add to it as appropriate given your sales territory and brokerage brand:
- Don’t spread yourself too thinly in the marketplace. Concentrate your prospecting on a zone by zone basis. Each zone can contain approximately 100 properties.
- Track and measure all of your activities with particular attention being paid to prospecting and cold calling. Every day ensure that you are reaching out to new people as part of your growth of customer base.
- Determine exactly who the key clients are that you should be working with. You will need to identify them and find them. That research can take time, so each night you should be researching the calls and the contacts to make the next day.
- Check out all of the listings in the local sales territory or focus area. Understand the listings that are creating the most interest today. Look for the listing opportunities within the most commonly attractive property types and locations.
- Some properties will be offered for sale or for lease by owners. In most cases, those owners will not have the market penetration or the skills required to develop significant levels of enquiry. On that basis you can merge these property owners into your prospecting system. It is interesting to note that their motivation for self-marketing is usually to save on commission. When they list with an agency or broker, they tend to load the price accordingly so that the net price or rent result is the same. If you are going to work with these property owners, condition them to the prevailing market conditions, and be prepared to walk away from an overly inflated price or rental structure.
- Connect with the clients that you have acted for previously to understand their needs and requirements for property in the future. Ask for referral business where possible.
To be effective in this market place as a top agent, you do need to track and measure your activities on a daily basis. In this way you can see what is working for you and the things that are wasting your time. Refine your skills and your actions accordingly. Directed habits towards successful actions will take you to the top of the market with quality listings and good clients.
In commercial real estate agency the goal setting process is quite important to the new business, listings, and commissions that you must to create. Without those goals and targets it is hard to know if you are improving individually, and or if that is applying across the team. Rarely will an entire team all reach peak listing and commission performance at the same time.
Any real estate agency without a successful performance management system and established goal structure is an agency that is doomed to failure. So many things happen given a seasonal listing and sales cycle that the trends and results from the market just have to be tracked; that tracking then should be related back to the performance of individual agents and salespeople. A successful real estate agency is a team effort.
Every property market is different and the same can be said of competing agencies within a market. The mix of property offering, listings available, and agency staff capability will all create challenges. Here are some rules to help you establish your goals and targets:
- Define the period and the market segment that will apply to the goals to be set. At any one time there will be differences between office, industrial, and retail property. The same can be said for sales and leasing activity in each. Assess your competitors as part of that process. What is your market share?
- Understand the history of the area when it comes to property transactions and time on market. Look for the patterns that apply to market activity. In any period of 12 months there is usually an activity period of 10 months where most of the business will come in. Look for the lag time between listing and closing on a transaction. What are people looking for in the market today and do you have plenty of those listings on your books or available for prospecting?
- What growth can you see in the property market and in what segments? Get details of the changes to population and business growth in your local area. Is there to be further opportunity for growth in those segments?
- Look for additional income or commission streams that can be built from sales and leasing activity. Generally that will be in property management, tenant retention planning, project leasing, renovation, or relocation strategies and plans. Set the critical factors of performance that matter to the business.
- Work from a basis of team goals and break that back to team members, territories, transactions, and property types. Get the team to come back with their estimates and targets given their market segments and property types.
- Set regular updates and progress meetings from those established and agreed goals.
A successful commercial real estate agency is a reflection of established business performance plans. The team targets are realistic for the available skill mix and the prevailing market conditions.
In commercial real estate agency, you really do need to understand what is going on in the marketplace and then make some solid choices at a personal level to improve your prospecting and deal activity. Everything comes down to a personal level and process in our industry. Success has little to do with the agency that you work for.
Outsiders and new agents to the industry are tempted to think that commissions and listings come easily. Nothing could be further from the truth. The quality and the growth of your business will come from personal focus and momentum. The choices that you make on a daily basis, and the actions that you take in prospecting and marketing will drive your business forward. The agents that struggle in the industry are those that have little or no system when it comes to business generation and market share.
Here are some strategies to help you initiate a business plan as a commercial real estate agent. Consistency in focus and the actions that you take every day are the keys to getting momentum and traction with your market share. Here are the ideas to help you:
- Understand the condition of the market today in deal activity, competing agents, and future growth. Look for the opportunities in sales leasing and property management activity. Understand where you fit when it comes to those three distinct disciplines.
- Choose the property type that you understand and can relate to. That may be in office, industrial, or retail property. The clients that we work for require specific expertise when it comes to resolving a problem with a quality property. The marketing and inspection process with any listing is not an experiment. It requires specific knowledge and expertise to tap into the right target market.
- Determine the cycles of the local property market when it comes to leasing and sales turnover. You can do that by reviewing the history transactions through the region. In most markets, a commercial or retail investment property will change hands or be upgraded at least once every seven years. It takes that long for the appropriate capital gain to occur or the client to reach the next stage of portfolio change and growth. Be sensitive to the cycles, and start prospecting the right people inside their property cycles.
- Start prospecting on a daily basis ensuring that you’re talking to new people as well as current contacts. The whole process should take you about 2 or 3 hours per day every working day. In a very short period of time you will find some new business opportunity. When that occurs, keep the prospecting process underway. That’s how top agents grow market share.
- When a competing agent puts a signboard on a property, it is an opportunity for you to talk to the property owners and business proprietors in the immediate and adjacent vicinity. This then says that the marketing processes of a competing agent give you leverage when it comes to building your market share. It is a fact that nearby property owners and business proprietors like to compete rather than cooperate with a nearby property sale or lease transaction.
- When you list a property, personally market the details of the property to the local region of property investors and business owners. This involves door knocking and telephone calls. From this process you will identify other opportunities to work on in the future. Pay particular attention to the immediate property location and the streets around the subject listing. Walk the streets and knock on the door’s to introduce yourself and the upcoming listing. Ask questions and talk to more people; it is amazing how much information you will extract from the market when you do this.
Building your market share in commercial real estate agency is a simple and yet ongoing process. You should have three or four solid strategies underway such as those above to help you connect with the right people and build the right relationships.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
In commercial real estate agency, the sales pitch and presentation process is something that will hopefully occur quite frequently for you. On that basis you need to be ready to present your ideas and strategies at any time and on short notice. You never know when a client or prospect will want to talk to you about the market or the listing alternatives available when it comes to commercial real estate sales or leasing.
As a general rule, every agent should carry a complete and comprehensive marketing folder at all times with examples of property marketing solutions; those solutions should apply to leasing, sales, and property management.
Watch your competitors
In most property presentations situations today, you will be up against a number of other agents all seeking to attract the same listing into their agency. Those other agents will be using a variety of enticements and discounts.
It should be said that the provision of discounts to a client is not a good way to win a listing. Agents that cut corners on fees will generally cut corners on service. Given that the client wants a result with their property, cutting corners really doesn’t work. Adjust your pitch to suit that message.
You should win the listing based on your experience and relevance to the property type and the client. Your strategies and marketing solutions should be so comprehensive and relevant that the client can see no other alternative but to give you an exclusive listing. Build your presentation on that logic.
Discounts don’t work
The clients seeking a discount should be encouraged to understand the commerce of the deal and the marketing effort required by you as the agent. A few hundred dollars saved in commission is nothing compared to the better price that you can achieve for the client with a dedicated campaign that is personally conducted.
It is the quality of your presentation and pitching process that will help the client understand exactly what you are going to do for their property and its challenges. Your services need to be superior to that of the competitors locally. Be relevant and be different. Show the client why they need you.
Here are some tips to help you refine your presentation strategy when it comes to commercial and retail property.
- Check out all the competing properties in the local area so you can advise the client as to how the listing needs to be comprehensively marketed.
- The first four weeks of any marketing campaign are the most important. During this time you will need to connect with the defined target audience and create as many inspections as possible. Structure your marketing recommendations accordingly.
- Be aware of the current market conditions relative to the property type, and the seasonal sales or leasing pressures that can influence the starting of the marketing campaign. If you have a quality property to release to the market, it may pay you to consider the ideal time frames to do that.
- Use some sort of graphical display to illustrate to the client how you will move the listing forward. A Gantt graphing process is good for this application. You can show the client exactly how things are done and where those things will head over the coming weeks.
- As a general rule, every property should be exclusively listed. In that way you can create the correct amount of momentum, optimize the inspections, and negotiate directly with the client knowing all of the facts that are involved.
- Vendor paid marketing should be part of the exclusive listing process. Get quality photographs taken of the property to feature in all the marketing material created and used. Be aware of the opportunities that each marketing method provides. The Internet should feature in every campaign. In the first instance, it is the visual side of marketing that will attract more enquiry so use the best photographs wherever possible as part of your marketing effort.
When it comes to pitching for the commercial property listing, your strategies and ideas need to be well planned and optimized for the prevailing conditions and the property. Help the client see why your strategies are so important.
Leasing commercial real estate is something that can provide a good buffer of commission when sales listings and actual sales have slowed. It is also the case that a successful lease transaction can lead to a future property management or sales opportunity. This then says that all top commercial real estate agents should be prepared to lease ‘quality’ local property.
Notice that I said the word ‘quality’ when it comes to property selection. Determine the property size and type that will give you the appropriate fee for a successful lease transaction. Focus locally on quality, the good landlords, and the quality tenants. A lease transaction can take a reasonable amount of time to initiate and complete. On that basis you should only focus on the good deals and the good opportunities. Let some other agent have the small things to lease that have minimal fee results.
Here are some tips for taking enquiries from tenants today when it comes to leasing new premises or relocating:
- Make sure that you’re talking to the decision maker when it comes to the particular tenant. Get the contact details and the identity of the tenant sorted before you provide too much property information.
- Ask them about the property type that they are looking for when it comes to improvements, services and amenities, location, and permitted use. Also find out about the required lease term, the rental budget, and property usage.
- The tenant’s staff and the customers interacting on the property will create certain challenges when it comes to improvements and location. Car parking is a good example and case in point.
- There are big differences when it comes to leasing office, industrial, and retail property. Create checklists for each so you can ask the relevant questions with potential tenants.
- Is the tenant coming to you today from another property location? Are they new to leasing property locally? If they know nothing about the local area, you will need to fill in the gaps when it comes to business demographics, transport, communication, local area profile, and property usage.
- If they are coming to you from another property location, they may have some timeframe to satisfy or a property disposal requirement. Ask the right questions to get the complete picture. You may even find another listing requirement with the property changeover.
- Has the tenant looked at other listings with other local property agents? It is quite likely that they have seen other listings and may have current negotiations underway through other agents. It is good to know if this is the case so you can adjust your strategy accordingly.
Don’t be too eager to take a tenant to a property. Get all of the facts together prior to the inspection process so that you don’t waste your time with the incorrect strategies or listings. Match the tenant to the property before you leave the office; qualify them. If necessary take them to a number of properties to give them a comparison of current market conditions.
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In commercial real estate agency it is very much the case that the day will take over your diary unless you take control. People will impose on your time and things then will go absolutely nowhere.
If you are like me, you will hate people wasting your time. In our industry time is money and we need to remember that. In an average day lots of people will want a slice of your time. How about this list for starters?
- Existing clients with their listings
- New clients wanting to list their property
- Team leaders wanting to talk about the weeks results
- The boss (for all sorts of reasons)
- Tenants looking for property
- Buyers wanting to inspect your listings
- Telephone enquiries
- Administrative people needing help getting your marketing campaigns underway
So, all of this says that we need to set some solid rules that will not be broken or changed. We must control our time as it is the main thing that we can control in commercial real estate agency.
Systems can set you free to get on with your business. When business runs smoothly then you find the clients and the listings that you need.
Every system in commercial real estate is essentially made up of subsets or systems for key things. Each part of the process can be refined and improved. I have had systems for all of the following:
- Prospecting systems so I can keep focused on the right properties and clients that will need my services one day. Every good commercial agent should have a pipeline of some type.
- Presentation processes so that every property that I pitch for is a deliberate pitch that is well controlled to a solid approach that I know works. Confidence here is the key.
- Listing systems for each property type such as office, industrial, and retail property. I would also have systems for sales, leasing, and property management. Retail shopping centres are quite different and feature with their own systems that are unique to retail.
- Inspecting a property is quite special and having a process for that is wise. A checklist to help you ask the right questions and look at the right things in the property will always be of benefit. The inspection system should take into account the property type and the location; that is why you need checklists for this.
- Marketing processes for the listings that we work on should not be generic or ordinary. The fact of the matter is that each property should be uniquely promoted to a plan; this assumes that it is an exclusive listing and you have vendor paid marketing funds paid in advance.
- Negotiations and communications with clients should be documented. It is common that things will get delayed or changed when you are negotiating with a client on a sale or a lease. When you have the supporting documentation and notes, nothing can go wrong.
If you are finding that things are out of control and you are struggling as an agent, take a look at your systems in commercial and retail real estate agency. Build some processes and controls that help you move forward.
In commercial real estate agency today, in any given year, you will be seeking new staff to employ and also evaluating their relevance to the agency. To assist in the process, you should have an evaluation system that allows you to understand the candidate, and the value that they can bring to your agency.
For this reason you should create a checklist to be used in an employment interview. It should also be said that you should have two or three interviews with the ‘short listed’ candidate to ensure that all of your observations are understood and confirmed. In each meeting bring a further person from your existing staff into the interview so that they may give you extra comments and observations from the meeting.
Here are some evaluation processes and questions that can help your employment interview in commercial real estate today.
- Get detail from the candidate as to what they have done in the industry and where that occurred. Check out the information they provide to you. Ultimately you need to know that the candidate is suitably skilled and professional in their business activities.
- Talk to previous employers to understand the way in which the candidate operates at a professional and business level. In most cases you should be talking to two separate employers.
- Get details of the successes that the person has achieved and can prove to you are relevant to your industry and location today. The role of an agent or salesperson in commercial real estate today is quite complex. They are required to undertake specific tasks related to prospecting, presenting and pitching, inspecting, qualifying, negotiating, and documentation. Each facet of the job has specific disciplines. Make sure that your candidate qualifies in all respects.
- Always talk to referees provided by the person. Those referees should be unrelated and preferably from a business environment and workplace. Get to the real truth of employment.
- If you don’t feel 100% regards a particular person in the interview, then there is something that is wrong and you simply need more time to understand what that is. It is better to take time in your decision than to step into a new employment arrangement was someone that is not totally correct for the role.
- Today a salesperson or an agent in commercial real estate must bring considerable technology and computer skills to the task. They must be prepared to undertake personal administrative work using computers and technology. Ensure that the person is comfortable with this process and can prove to you that they understand computer usage and also software applications.
- Your sales team will be supported by administrative staff. That administrative process and backup will differ based on how you want to run the agency. It should be said that the administrative process and backup system will cost money and that cost recovery should occur from commissions and or a particular desk fee that applies to each agent and salesperson.
Here are some questions that you can put to the person under interview circumstances.
- What is the most frustrating thing about commercial real estate today and how would you handle that?
- How do you handle the paperwork part of the business and what systems do you use to support that?
- What do you enjoy about the commercial real estate business today?
- Why do you want to be employed in commercial real estate and most particularly in this agency?
- What do you know about our business? They should be able to show that they have researched your business prior to the interview.
- How do you prospect for new business, and what are your processes and systems of support?
- Tell me about the database and the customer base that you established in your previous place of employment.
- What do you believe are your most relevant skills that you bring to this agency?
- Tell me how you work within a team, and how you would improve the team and its interaction with you.
- If you could describe yourself in two or three sentences, what would that be?
- What are your most significant challenges as a professional salesperson? How would you improve on these challenges to resolve them and build your future business?
- Where do you see your career heading in commercial real estate today and over the next five years?
- Why should I employ you?
- What do you know about commercial real estate? Tell me more about that.
So these are very tough questions for some people to address. That being said, commercial real estate is a tough industry and requires tough people that can handle difficult questions. Formulate a questionnaire based on these questions and others that can help you fully qualify the candidate for employment in your agency.
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The commercial real estate market of today has some challenges to deal with. In most cases it is a slow market or there is an abundance of unsold properties, and or vacant premises for lease.
The property market doesn’t disappear; it just changes. That change factor is what we as commercial real estate agents can help with. We become the ‘agents of change’ and can provide the right solutions for property investors, business owners, and tenants. People need our help in many different ways.
If you are finding that things are a bit tough at the moment for you as a Real Estate Agent, have a look at the way in which you are doing things. Today you need a ‘toolbox’ of solutions to help the clients and prospects in today’s property market.
Creativity and relevance are the two facts to aim for here. Are you creative in marketing your properties for sale or lease? Are you relevant as a top agent in this type of property market? Generic agents struggle in this type of market because they do not have the ideas and strategies active to solve property problems for clients.
So let’s give you some ideas to put into your agent toolbox for commercial real estate sales and leasing.
- Have all the market facts and information at your fingertips for the particular property type and deal that needs to be done. You cannot change the client’s perception without the right information.
- Check out all the competing properties locally before you meet with your client. Be very familiar with prices and rents that are being asked. Time on market assessments will also be of value in helping the client see what is going on today.
- Have stories of success with other local properties and listings that you can share. Most clients will listen to the experiences of other properties and clients.
- Have alternatives for the client to choose from. When alternatives are available, the decision to be made is less difficult. Most clients will choose the ‘middle ground’ alternative.
- When you list any property, set the rents and prices for today’s market. The client’s perspective on price or rent should be challenged if it is too unrealistic. You do not want to waste your time or theirs in the listing process.
- Provide the solutions that the market needs including personal marketing systems that will allow you to take the listing to the right people in your database and the right local property owners.
Help the parties make decisions. In many respects our clients and prospects are just looking for the right agent that can solve their issues quickly and effectively.
As an agent in commercial real estate for many years, I know that every bit of marketing material needs to be carefully optimised. The rule applies even to the envelopes that you use in your direct letter or brochure campaign.
You want your letter to be seen and opened. The envelope will help with that. If the envelope is too ‘business like’, it will hit the rubbish bin faster than you can imagine. So we should set some rules to the letter process to be adopted in commercial real estate.
Try some of these:
- Use a non-standard envelope colour. Blue is good and also is orange. The colour should still allow the address details to be clearly seen.
- The ‘return to sender’ address on the back of the envelope should be hand written with an address only. Leave off your name.
- Use a non-standard envelope size. Try an envelope that is smaller than the traditional business DL size.
- Use real stamps on the letter and not a ‘franking machine’ embossing. Real stamps attract the eye and help the readability factor.
- Hand written addresses on your envelopes should be in blue ink. Make sure that your handwriting is clear and legible; it shows respect.
- Do not bulk up the envelope with too much marketing material. A business card is all that you need inside the envelope with your letter to send a professional business message.
- Open rates on envelopes are better between Wednesdays and Fridays. To achieve this delivery focus, send your letters on a Monday.
- If you want your letter to be seen amongst others, pay for priority postage and overnight delivery.
- Always follow up your letters a few days after sending.
- Sign your initials across the envelope flap on the rear of the envelope. It appears like a ‘seal’ to the reader and then adds to the personalisation.
Simple rules like this will help your sales letters reach the required person. More importantly they will help your envelopes get opened and the contents read.
Personalised envelopes and direct letters can be a good part of your marketing campaign to build your prospect list and support your direct prospecting efforts or cold calls.
The commercial real estate industry is based largely on relationships and trust. You can extend and grow those factors in the way you address and send your envelopes to prospects and targets.
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