The commercial real estate market can be very competitive at the best of times. Many agents and brokers will be chasing the same listing and attempting to influence the client towards their marketing solution and property package. For this reason you may only have one chance to attract new business and the client to your brokerage. Your sales pitch or presentation needs to be of the highest quality.
So here are five effective ways to improve the client connection and potentially win the listing. Compare these strategies to what you are doing currently. Small improvements can bring big results.
- Clients today know when they are talking to a top agent that dominates the market segment or the location. Every presentation or sales pitch should be designed around those facts. If you miss out on a listing, it can largely be due to the fact that you have not sufficiently convinced the client of your relevance for the property and their marketing situation. A client or a prospective client will not turn their back on the recommendations of a top agent. It really doesn’t matter what relationships exist between the client and your competitors. If you specifically sell your marketing package at a high level, the relevance and the recommendations are hard for the client to avoid or overlook.
- When you present to the client, be totally absorbed in the strategies recommended and the requirements of the client. Every sales or leasing situation can be quite unique. Drill down into the facts of price and rent as the case may be. If you provide any recommendation around the price or the rental, show clear market evidence to support those facts. Also comment regards the best way forward for the client given the current market conditions.
- Show the client exactly what you will be doing to help them with their property challenge. Also show them the stages required to move ahead. You can do that through a simple Gantt chart that itemizes the marketing preparation, marketing campaign, inspection strategy, and negotiation approach. The visual approach of a Gantt chart will help you significantly with any sales pitch or presentation for the listing.
- When any of your competitors put a signboard on a property in your local area, canvass the surrounding property owners and business proprietors. It has been proven many times over that some nearby property investors and business owners are likely to compete when it comes to dealing with their property challenges. You can be the agent or broker to help them with the process of competing; you can list their property. The momentum gained from the nearby competitors listing will give you leverage in packaging your property listing. You can adjust your methods of sale or lease accordingly, together with the necessary pricing package to attract better levels of enquiry.
- Put yourself into the promotion of any exclusive listing. Any exclusive listing should be secured for a reasonable period of time together with vendor paid marketing. As part of that process, you can then commit to the marketing effort by canvassing local business owners and property investors. It directly follows that any quality property listing will give you many reasons to talk to others.
The commercial real estate brokerage process doesn’t need to be hard or difficult. It does however need to be simplified and direct. Get involved with your clients and your property listings so that you can attract more enquiries and create more inspections. Over time those two factors will help you build market share and potentially dominate your market.
Many people think that the life of a commercial real estate broker is easy. Perhaps some people even join the industry assuming that is the case. The reality of the industry is far and away from those assumptions. The top agents in the market work really hard and do so to a definite plan or system.
When you put in the effort individually, you will get results. The efforts applied should be specific to the property type and the location; in other words you do need to do the right things each and every day and systemise the process. That is exactly what the top agents do.
Here are some cold hard facts regards the industry:
- Commissions – looked at in isolation, the commissions that we earn can be quite large. For most property transactions and listings however real strategy and effort is required to attract a successful outcome in any sale or lease. As large as the commissions may seem, they don’t come easily. If you want significant income, you need to work hard.
- Hours of work – the hours of work are variable and sometimes quite long. It is not unusual to be negotiating a contract or a lease later into the evening, across the weekend, or early one morning. The business is out there to be done providing you are flexible enough to do the work of any time of day.
- Property knowledge – property knowledge will have a big impact on your inspections and negotiations. It will also help you significantly when it comes to the listing process. On that basis you will really need to know a lot about the local area, the property type, and the current levels of enquiry.
- Personal marketing – whilst you may work for a well-known brokerage or agency, you must market yourself each and every day to the right people in the right way. On that basis every agent or broker should have a specific prospecting and networking program underway.
- Prospecting – it should be said quite clearly that prospecting is not easy. It is required business skill that takes practice and improvement. Simply lifting the telephone or door knocking on the business will not be very successful without the necessary practice factors. Build some prospecting practice into your business day prior to getting into the office.
- Negotiation – negotiation skills are something you learn over time. Every landlord, seller, buyer, and tenant will have different factors of leverage and requirements when it comes to property negotiation. As the agent or the broker to the deal, your advantage will be in seeing those factors of leverage and the requirements that can be satisfied. That is how a good negotiator works.
- Inspection – the inspection of a property will happen for a number of reasons and preparation is required. Every listing will have strengths and weaknesses impacting the inspection process. Your job is to use them or work through them to achieve the best result. That is where property knowledge and local market information will be of high value.
- Documentation – some property lease and sales situations are very complex. Expert information and assistance will be required when it comes to complex transactions. Make sure that every contract or lease that you create is correctly designed for the property and the client’s situation.
- Database – your database will be the most important business tool that you have available. Spend time every day connecting with people within the database and adding new people to the process. Over time the database will give you plenty of leads, and referral opportunities. From the database you can create a specialised list of VIP clients and prospects.
Looking at all of these things, you can see how important the commitment and the skills of the agent will be to their progress in the industry. They say that nothing really comes easy; certainly that is the case in commercial real estate brokerage. Be prepared to put in the hours and improve your skills over time. That is how you can be a very successful agent in the industry.
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.
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:
- 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.
- 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.
- 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.
- 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.
In commercial real estate brokerage, most successful sales people must play the ‘numbers game’ when it comes to new business and market share. Without an awareness of the right numbers and just where they are headed, any opportunity for growth can be overlooked or not captured by the agent.
So what are the numbers to be tracked? Here are a few of the important ones:
- The size of the real estate market – every sales person should understand just how big their market is and how they are positioned within it. That assessment will include the numbers of properties, numbers of businesses, and the historic sales and leasing records over the last couple of years. From those facts they can assess just how they can improve with more market share.
- The number of competing agents and brokers – every town or city will have competing agents in differing segments. Some of those agents will be better than others. There will also be specialisation factors that make some agents dominant in a market segment.
- Prices and rents – during the year there will be fluctuations in price and rent. That will occur across property types and in zones within the town or city. Every agent must know how the prices and rents for property deals are trending.
- Current listings – the other local properties should be watched for time on market, marketing method, success or failure, and enquiry rates. Some properties will be more ‘popular’ than others. Quality properties will always attract more enquiries. Exclusive listings will help you with market share; you should control your listing stock wherever possible.
- Internet listings – a lot of enquiry today is generated from the internet. On that basis it is necessary to track online listing numbers by agent and brokerage. It is best to do that on a Saturday when other things are less pressing in time. You can also visit those properties to see if they are of relevance to your market activities.
- Commissions and conversions – all top sales people and brokers should be tracking their personal commissions and conversions. They should understand how their market is improving or expanding. Those numbers can be compared to the local averages and the other brokers.
- Numbers of signboards – the traditional signboard is still highly effective as a marketing tool. The greater number of boards that you have placed in your sales territory, the better your enquiry rates will be. That fact being said, focus on signboards on exclusive listings at all times; control your stock and your market.
So this information will help a broker or agent with self-improvement and market development. Some would say that it takes time to track these things, and they would be right, however progress in any sales role takes understanding and tracking. That’s what this is all about.
In commercial real estate brokerage you need a ‘selling system’. That is a system that will apply to sales, leasing and or property management. It doesn’t matter what part of the industry that you work in, the selling of specialised services should apply. You are the best person to do that.
It can be said that not enough ‘selling’ goes on these days. All too often you see a broker or agent wasting time on ‘dead ends’ and unqualified prospects. The ‘selling’ process involves all of the following:
- Finding new clients to serve
- Promoting new listings in the local area
- Talking to new people every day
- Marketing a property to inquiring parties as part of an inspection
- Advertising online and in the newspapers etc.
So how can you do all of this with reasonable focus? You should have a system that controls your day and your focus. Stay on track in all respects as an agent or broker. Don’t divert your thinking or focus. Do the things that really matter to the clients and deals that you have underway.
You can split the ‘sales’ process up into these segments; in doing that you can improve your action and skills for each segment. Just how good are you at these things below?
- Researching new clients and properties to work on or for
- Prospecting consistently in your area and town or city for sellers, buyers, tenants, and landlords
- Identifying the requirements of people so you know if ongoing contact or perhaps a meeting is required
- Meeting creation for listings and presentations with clients
- Listing strategies that take into account the current market conditions
- Qualifying the right people to work with or take to listings as part of an inspection process
- Negotiation strategies for any stage of the property process and client situation
- Documentation processes and legalities
- Servicing the property, the client, and the deal
Every segment supports and leads to the next. If you have a weakness in any segment then you have a problem to address as a real estate agent. That is where training and role playing in your team can help. A career in commercial real estate involves ongoing and regular personal improvement. Prepare your selling system accordingly and stick to the plan.
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.
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.
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.
It is a fact that the commercial real estate market today is under some pressure and is also highly competitive. For you to be successful in your career in the industry, you will need a plan of action and a tracking mechanism to understand what’s working and what needs to change in your business model. Notice I said ‘your business model’? Most agents and brokers don’t have one! They simply let the days pass with little focus and random action. That is a recipe for losing business over time.
The commercial property industry is not all that different from city to city, state to state, and country to country. The property problems are all similar and simply need understanding. Taking direct action in your market every day will help you see the opportunities to work on and the clients to serve.
Having worked in the industry for some time, I have seen three distinct mistakes made by the majority of brokers and agents in the industry. Some of those agents eventually adjust and resolve their mistakes, whilst others overlook them to the detriment of their market share.
So what exactly what are these three all too common mistakes? How can you deal with them? Here are some ideas:
- The most common mistake made by all brokers and agents centres on prospecting. They simply fail to develop a prospecting plan that they can work to every day in a consistent way. They let the pressures of the day overtake their diary and business activities. Soon prospecting becomes item number 8 in a list of 10 issues. Inevitably the broker or agent never gets to the prospecting process in a regular way. If you want to rise to the top of your industry and generate reasonable market share, you will need a prospecting process that you can work to every day. Prospecting should be item 1 in your diary.
- Success in the industry is largely built on established relationships with key people. Whilst a prospecting model as mentioned earlier can drive more new people towards you, you do need to establish ongoing contact in a consistent and relevant way. When you first connect with new property owners and property investors, most of them will not have an immediate need for selling or leasing. That will however change over time, and you need to be there for the moment where experience and property expertise will be needed. Most top agents in the industry win the new business due to establish relationships built over many years.
- Marketing processes will vary from property to property and city to city. That being said, your marketing processes should be specific and special; they need to stand out around all the other agent generic advertising. When a client or prospect picks up the newspaper or reviews the Internet, they need to see your advertising and property listings as special and unique within the property type. A property listing that is well marketed will attract many other clients to you over time. Build your marketing skills to increase the brokerage profile with the property speciality. Improve your marketing skills to show the people in the industry of your relevance.
These three simple factors will have a lot to do with your success as an agent or a broker. Choose to improve each of them at each and every opportunity. Stand out as the top agent that you want to be. Be prepared to go that little bit further in all three of the categories.