In commercial real estate today, the cold calling process is still a very big and important part of what we do as agents. Each day you should be devoting 2 or 3 hours to the process. When you do this you find the opportunities and the prospects that you can serve.
Many agents struggle with the research and effort required to get a list of people to call. To help with that here are some thoughts:
- Choose one or two property investors in the local area to research each day. On average you should be able to contact one targeted property owner per day. Over time you will have built a list of 30 new property owners per month. This is a very powerful way to build your property owner contacts.
- The foundations for income and occupancy in commercial and retail property are in the local businesses and tenants. Make it a priority to call 40 local businesses every day. This process is easy as you can use the business telephone book for that. You can also use the internet. A business owner will quite likely tell you if they are a tenant, they own the property, who the landlord is, or if they need to relocate. All of that information is very valuable. Track the information in your database.
- Selectively contact solicitors and accountants in the local area. The best way to do that is by sending a letter first. Then you make the call. Introduce yourself and get to meet them. These business professionals will have clients that you can help with property matters. It takes a little bit of time for the levels of trust to be built up and the proof of experience to be established however there is very high value in this level of contact.
- Get in touch with property developers to see what needs they may have locally with current and new projects. It takes a bit of time for the relationship to be built here, but there is high value to you in doing so. Understand that most developers have
relationships with many other agents in your town. Don’t spend your valuable time at no cost until you know that the developer is committed to you.
The secret to making a call prospecting process work for you is in regularity. The process has to happen every day. It is a habit that takes time to create and you will need to prime yourself for the challenge. After about 3 or 4 weeks, the whole process gets a lot easier and results start to come in.
As part of your commercial real estate activity, you should research your property market at least quarterly and preferably monthly. On that basis you can project what sale and leasing activity is currently underway and what will occur over the coming foreseeable future. Essentially you are looking for listing opportunity, growth of commission, and new business. You are also looking to reduce any threats from industry downturn or change.
It really doesn’t matter whether you are working as an individual sales agent, or as part of a commercial real estate team. The same rules and processes apply when it comes to researching your market. You need to know what’s going on and you do need to set some specific strategies in place to help you capture the right levels of new business.
Here are some ideas to merge into your commercial real estate market research. After gathering the information, you can apply the findings to your personal business plan.
- Determine the geographic zone where you will get most of your new business from. That will be an area where you can focus almost all of your marketing and prospecting. It can also be an area which allows you to survey and research current activity. This then becomes your primary area of focus that should produce 75% of your listing and commission income opportunity. The other 25% of business will come from outside of the zone, or alternatively referral and repeat business.
- Given that you know where the business is now going to be coming from, determine the best customer demographics set that will apply to your prospecting model. Normally you will be focusing on local business proprietors, property investors, and industry professionals. On a street by street and property by property basis, it is necessary to research these people and make the direct contact. The direct contact will involve cold calling, door knocking, and direct mail.
- Research the history of sales and leasing activity in your local area. The critical zone of activity will be over the last five years. Create a graph from the numbers that you identify. Look for the peaks and troughs when it comes to seasonal sales and leasing activity. Determine if there are any opportunities and changes on the horizon.
- Review the supply and demand projections for commercial, industrial, and retail property in your target area over the coming three years. As part of that process you can visit the local planning office and regularly update yourself with changes to the development plan and or new projects coming up. Look for those changes that could impact the market. Seize on the opportunities early before other agents find them.
- Do a competitor analysis throughout your region. Some agencies will be better than others when it comes to results and market share.. Some agents will be more effective than others. Look for the differences with the successful people, and then determine how they have achieved their market share and dominance. Successful agents leave clues as to process and system. This can be replicated.
- Do an Internet advertising count of all the listings currently available for sale or for lease with your competitors. This should be on an agency and or salesperson basis.
- Do a signboards count all the listings currently available for sale or for lease. This should again be on an agency and salesperson basis.
- Assess the factors of time on market when it comes to those properties that remain outstanding, unsold, or vacant.
- Look at the factors of marketing that apply to current listings in your local area. Look at the differences across all agencies in marketing when it comes to open listings and exclusive listings. Can you do anything more effectively and differently than the other agents?
Given your local property market, and property specialty, you may very well be able to add something to the list. You can now see the importance of understanding what is going on currently in your local area and how it can impact your future promotional activity.
Today your efforts as a top commercial real estate agent just have to grab the attention of the market. You must prospect with system and effort. In this way you can build more opportunity around you in listings and clients.
There is no point in being the best local agent if the market knows nothing about you. You might be the specialist that everyone needs today, but the message has to get out to the people that need you. Your personal marketing plan has to do this. It is an ongoing process and effort, but the rewards are there for the agents that work hard at it.
Here are some prospecting tools and systems that will help you in commercial and retail real estate agency today.
- Previous sales in the area are a great source of opportunity today. What you do here is to go back in time to about 3 years ago. Look for the sales and lease deals beyond that point. They are going to be (on average) the next transactions to come into the market. Commercial real estate is built on a cycle of ownership and leasing. Work out what the cycle of time is and prospect in front of the cycle.
- Other agent’s boards give you the opportunity to talk to local property owners in the immediate vicinity of that board. They may like to compete with the current listing. They are more likely to do that with a competing agent such as you.
- Your signboards will build profile across the market. Make sure that your name and contact details are on as many boards as possible. Ensure that all your exclusive listings have special signboards of high quality. Standard signboards should only be used on open listings.
- Business owners locally know more about the area than you do. Get to talk to them and see what their property needs are. Ask them about the business and property changes locally.
- For sale by owners are always targets for us. In most cases these owners should be left to struggle for some time until they feel the pressure of the market. The fact of the matter is that most buyers and tenants would prefer to deal with an agent as part of any negotiation on a property.
- Cold calling and door knocking is a daily requirement in our industry. Make sure that you devote 3 hours to the process every day. I will say that many agents hate it for a variety of reasons; this makes it better for the people that can do it.
- Use a good database software program to capture your contact activity and plan your email newsletters and ongoing call contact.
All of this takes systems on the part of the salesperson. When you get these things under control, the property market starts to open up for you.
In commercial real estate, is far easier to sell and lease quality properties, than it is to work on average or below average properties. Every property listing demands the same amount of effort and commitment on the part of the agent.
That being said, you should not take on a listing unless you are fully prepared to commit to the entire marketing, inspection, and negotiation process. Top agents focus on quality listings and properties. As a general rule that should work for you too, as long as you prospect regularly and specifically.
It is very hard to get enthusiastic about a property that is overpriced, or where the landlord is not committed to the marketing process and the prevailing market conditions. That is why exclusive listings are more productive in today’s economic climate.
How many exclusive listings can you take on at any one time? It is an interesting question; however the averages seem to indicate about 15 to 20 properties. Beyond that point it is hard to keep up to date with all the marketing and inspections needed.
How many open listings can you take? As many as you like; that is because you do not service them to any great degree over time. You put a sign on an openly listed property and then you wait to see what happens.
Locational factors will help your listing enquiry and conversions. Look at the location of the property and then market into the location. That will mean things like:
- Check out the adjoining properties and then speak to the property owners to see if they want to purchase your listing.
- Talk to all business owners in the street that you can find. They may have a need for expansion or alternative premises.
- Get a signboard on all your listings. Most enquiries will be locally based. The signboard also helps your personal brand as an agent in the local area.
- Create a flyer of current listings and circulate that flyer monthly into the local area.
- Set up a blog on the internet for yourself. The blog should talk about local property market issues and changes. That being said do not advertise property on the blog; that is not what it is all about.
- Every successful sale or lease should be directly marketed into the local area. That is a personal thing and you are the best person to do that.
When you have a commercial property to market, think local and drill your marketing into the local area comprehensively. Over time you will get more opportunity that way as a specialist agent.
When you are looking at listing a commercial or retail property for sale, it is important to know what the outgoings are for the property and just how they compare to other properties in the same general location.
There is no point in taking a commercial property to the market if the outgoings require adjustment or analysis. An astute buyer will ask questions of high outgoings and you will need to have your answers ready.
If you specialise in a property type, you will find it easy to relate to outgoings and operational costs in a commercial, industrial, or retail property. Get to know the averages that apply to the properties that you act on in sale or lease.
Here are some categories that apply to the expenditure analysis in commercial property today.
- Council rates for the property will take up a large percentage of the operational costs for the building. They are usually based on a pre-determined value of the property. Check out the rates, when they were last updated for ratings purposes, and compare the rates to similar properties in the same location.
- Water rates will be a charge on the property and there may be extra costs of excess water. Given that water is a critical component of property occupancy, check out what water saving initiatives are active in the property.
- Land tax or similar property ownership tax will be something that could apply to property ownership. The question will be if the tax is a recoverable item under the leases with the tenants.
- Insurance costs for the property can be a recoverable item under the lease. Check out the relationship between the tenants and the landlord when it comes to property insurance and liability.
- Air conditioning and energy consumption are typically high costs in property occupancy. Modern properties will have some energy savings devices and strategies that help with expenditure costs for the tenants. Ask questions about the systems that get to the facts about common energy and tenant consumption of energy.
- Security in a property can be of prime importance to the tenant and the way that they use the property. Understand how the security in the property operates and who pays for that.
- General repairs and maintenance will occur with every property. The fact remains that the costs of this category should compare with other buildings of similar type and size.
- Lifts and escalators will consume a lot of energy in the property as well as contribute to the operational plant and machinery costs.
- Essential services code compliance for such important issues such as fire prevention, air conditioning, and other safety equipment costs should be reviewed to ensure that the property complies with the required codes that apply to its construction and use.
- Capital expenditure should be removed from the operational costs of the building. They are not normally recoverable.
A top agent can work through these figures and determine how they impact the property. This process of checking can help your ability to sell or lease the property.
Need more tips for commercial real estate agency? You can get them right here in our Newsletter.
In commercial real estate today, good digital photographs will always help your marketing campaign. Ordinary photographs will do nothing for your property enquiry. For this reason, it pays to get quality professional photographs as part of every property listing. That being said, professional digital photography in the marketing of the property should be a cost to the vendor as part of vendor paid marketing.
You can always see a difference in any property marketing campaign that is optimised with professional photographs. The marketing material captures your interest and draws you to the detail about the property, the location, and the improvements. Advertising and marketing campaigns will always be strengthened by this photographic approach.
When it comes to structuring your vendor paid marketing campaign, digital photographs should feature as one of the main items to be addressed. Over time this strategy will have a significant impact on the amount of property enquiry for you personally, and also for your clients as part of the sale or the leasing campaign. It is not hard to sell the concept; our clients want results from the advertising and marketing effort, and this is one of the ways to encourage that.
If you must take digital photographs of the property yourself, here are some tips to help you with the process:
- Purchase a good quality digital camera with a high number of mega pixels. The higher the number, the better the quality of image. That being said, you will need a good storage card of sufficient size to record the images. The greater the number of mega pixels, the larger the image, and the greater the storage requirement within the camera.
- Get to know your digital camera so that photographs can be easily taken under a variety of circumstances and light conditions. Some cameras today feature tools and systems that will enhance the image in size and quality. You just need to know how the camera works.
- A digital SLR camera will be an advantage when it comes to taking property photography. You can look through the viewfinder to see the actual property angle and image before the photograph is taken.
- Every photograph should be interesting and for this reason you should take many photographs from different angles both inside and outside of the property. It is easy to delete the images that are not up to standard.
- Whilst you will be taking images of the property, you should also take images of the street, the precinct, and surrounding properties. That will allow you to recall locational factors when talking to prospective buyers or tenants.
- Remove clutter, people, and cars from the image before you take the photograph. You may only have one chance to take the image and on that basis remove the unsightly items before you take the photographs and leave the property.
- Some properties can be successfully featured in night time shots with internal lights turned on. You will require a tripod to support the camera as the image is taken; this will help address the required levels of lighting and the need to remove camera shake.
- When taking a photograph of the exterior of the building, it is best to consider the direction in which the frontage of the building faces. It is best to get the building exterior frontage photographs either early in the morning or late in the afternoon. The angle of the sun low in the sky at that time will produce full sunlight onto the property frontage and therefore will feature the building more effectively.
- Be aware of the glare factor that could compromise the quality of the image. Take many photos from many different angles so that the poor quality images can be removed.
Good quality images will always enhance the marketing campaign for the property. Develop a strategy that incorporates this process as part of the property marketing effort.
When you work as a commercial real estate agent, you should be on the lookout for opportunity in the market. It can come in many forms including the following:
- Businesses moving in or out of the area
- Businesses under occupancy pressure for more or less space
- New property developments coming into the area
- Supply and demand shifts for space locally
- High vacancy factors
- Unsold properties
- Rental pressures
- Landlords that are frustrating their tenants
- Under performing properties
- Poorly maintained properties
- Shifts in business demographic
- Changes in key business activity such as mining or agriculture that will shift secondary business activity
The list is just the ‘tip of the iceberg’ when it comes to the variations of property ownership and use. It is always the case that opportunity will shift and change but you should be prospecting every day to find that new opportunity. Asking the right questions will find that opportunity.
The agents that do not prospect regularly enough ‘struggle’ when it comes to building market share. Poor property enquiry and listings are the direct result. Today you must build good networks of landlords, tenants, and business owners. This property market is challenging enough without us creating greater hurdles for ourselves. Network a lot of the right people; that’s the rule.
In today’s property market you should know several hundred local business identities and property investors. The only way you can ‘track’ this number of people is to have a great database or contact management system that is well maintained. It is a personal process for each and every salesperson and cannot be delegated.
Top agents have a focus on growth and market share when it comes to the best properties and the best clients. In many respects they will not take listings of small and insignificant properties. They want to protect their time and effort. It is a worthwhile business focus to adopt. Spend time on the best listings and the best clients.
Here are some points of focus for you to develop your commercial or retail real estate agency business:
- Review the property history of your area to see what has happened over the last few years by way of prices and rents. Make sure you are selling or leasing a property type or location that is active in the market today and will be so in the future.
- Provide a unique and high quality service to your clients that other agents fail to provide. To win the listings, you must be the ‘right choice’ of local agent.
- Verify every property before you spend time on it. The verification process will normally involve price, rent, motivation, market supply and demand, plus the quality of the improvements, services and amenities.
In saying all of this, there will always be opportunity in any commercial or retail property market; you just need to see it and adjust your efforts accordingly.
In commercial real estate agency today, the basis of networking and lead generation has expanded. The traditional methods of contact are still there, but we now have quite a few other tools to use. Anything that makes the life of a commercial salesperson easier has my ‘vote’.
The networking and lead generation systems we should always use are really all about convenience, contact, and relevance. In the past we could do all that with cold calling, meetings, constant contact, newsletters, and direct mail. Those things today still exist and should be used but we can now do more with other tools and strategies. In effect we are bringing more technology into the loop of contact.
If we get the equation correct, we can get better results in lead generation. Make no mistake here; in no way am I suggesting that you should stop the traditional methods of contact, I am just suggesting that you should add to them.
Here are some ideas to help you establish the new system of contact and ongoing networking.
- Twitter is a process of simple short messages known as a mini blog. The process is free, and can be strategically used as part of ongoing business contact. You must however use relevant and helpful information as part of the process. This then says that you could send twitter messages twice a day with comments regards your commercial real estate product, the market, or services. You could add to that some market commentary or links to other interesting topics related to your area and precinct. If you are going to use twitter for business, do not allow personal small talk to enter into the loop. You must remember that some of the people that are following you on Twitter are business people and they do not need to see your personal ranting’s and ravings. Personality is one thing; when the comments get overly personal and biased they are a detriment to your business profile.
- Facebook is something that is used by many people today. It is preferable that you establish a Facebook page for business purposes, and then retain your personal profile elsewhere with a page for your friends and family. Facebook in business has a particular strategy which doesn’t mix well with standard personal contact. That being said, Facebook in business really does work. You can take feeds from Twitter and LinkedIn to your business page. When you use Facebook in business, segregate your followers into Friends, Family, and Business. In this way you can control who gets access to particular areas of your pages.
- LinkedIn is a great business tool and contact system. In business and commercial real estate it has a much higher value to us than Facebook. If you are a successful business person, your clients and contacts will expect to see a comprehensive and up-to-date LinkedIn profile. After every meeting with prospects and business contacts, send them an invite to join your LinkedIn page. It is questionable whether you need a free or paid LinkedIn account. Most people I know use the free version; however you do have a choice. If your LinkedIn activity gets a lot of use and is growing, perhaps you should revert to the paid version.
- Blogging is an extremely powerful business tool. You can set up a free blog on Blogger or WordPress. It takes about 20 minutes to set up the blog and it is really easy. The only cost to you after that point is time. What a blog allows you to do is establish greater online credibility as an expert in commercial real estate locally. This blog process adds to any other website presence and advertising you may do. You can write a blog about your commercial real estate specialty and area. Information is the key. Use the blog to give value and information about commercial real estate. Use it to show that you really are the expert.
So these are some of the main technology based tools that you can use today. Build them into your business system and start networking.
When it comes to listing a commercial or retail property, the comparable market analysis that you give to the client is critical to the conditioning process. Many clients initially expect far too much money for their property based on false information and assumptions.
In raising this issue it should also be said that some agents will deliberately overstate the value or rental for a property for the simple opportunity of getting the listing. After that point in time they will start conditioning the client to the prevailing market conditions. That of course is not the professional way to do business. It also sends the wrong message to the client and puts them under tremendous pressure when it comes to the final negotiation and transaction.
The fact of the matter is that you should fully brief the clients that you work with. You should give them accurate and up to date market analysis information. Here are some facts relating to that strategy and process.
- The information that you provide is time sensitive. The market today will be a lot different than what it was six months ago. Nothing ever goes up forever. The client needs to understand that commercial real estate is quite seasonal, and the enquiry rates change throughout the year.
- Local properties will have a direct impact on each other when it comes to property marketing and property enquiry. The properties that are still unsold on the market are not a good indicator of the final price. In most cases, those properties will be overstated or poorly marketed. Either way the information relating to those properties needs to be sanitized to something that is compatible to your property listing.
- Enquiry rates will change throughout the year. Property enquiry is usually shaped from the prevailing business community, and the economic circumstances of the market. Track the enquiry and understand what people are looking for today.
- It is quite likely that the time between property inspection and property offer will be lengthy. In many circumstances, the extraction of an offer from the potential buyer will take a lot of time and effort. They will be looking at many other properties and considering the business pressures that apply to borrowing money in today’s market. For this very reason, your client needs to be flexible and patient.
- Today’s market conditions will be influenced by the local area, the property improvements, and the supply and demand when it comes to particular property types. Tracking all of those numbers can be a challenge, however it does have to occur if you are going to give accurate and up to date market analysis.
Know your market and provide the best information to your clients. A well listed property will create more enquiries and sell faster in any market.
When it comes to weigh commercial real estate listing, presentation, or inspection, it is quite likely that the parties will give you a few objections in the negotiation. Objections tend to be a testing process to see if you satisfy the necessary factors that the other party requires in making a decision.
Top agents in commercial property know that practice is always required when it comes to negotiating and handling objections. You can never do enough of this type of practice when it comes to commercial and retail real estate. Build some of those topics into practice and role playing in your team meetings on a once a week basis. Current market conditions will always give you lots of factors to work with and debate as part of offsetting objections.
So here are some strategies to help you handle the objections that will arise from property sellers, landlords, buyers, and tenants.
- When the objection is raised, you need time to think about your response. Some agents will take notes as part of the negotiation and response process. As you take the notes you can consider the alternatives in responding. Solicitors do this all the time as part of working with difficult clients and customers.
- Some agents will go for the strategy of a pregnant pause. This may only be a few seconds, but in reality it will seem like half an hour. When the client has given you the objection, consider the response before you come back with the comment.
- If you need more time, you can ask the client to qualify and explain their position further. Again, this is a strategy of delay allowing you to consider your response. When you ask more questions, the client can invariably give you some leverage to respond. This process is called a Freudian slip. It is used by the top agents all the time; it is simply a matter of asking questions and digging deeper. As you get the greater levels of response you can interpret the answers from the other party.
- If the client or the customer has particular concerns, you can acknowledge them and then restate them in your words. In this way the client or the customer will then understand that you can relate to their situation.
- Break the concerns down into single factors and matters. One big problem or objection is actually a number of issues, some of which can be resolved easily.
- Respond to the other party with confidence and local market knowledge. It is very hard for the other party to refute or reject prevailing market conditions and market evidence.
- Give the other party some clear stages of resolving the problem. Show them how you can move ahead and help solve the overall situation. Determine what their best fallback position may be if it exists. Tell them that they may only have one chance to close on the transaction. If the chance passes them by, they may lose the property enquiry or the initiative entirely.
In commercial real estate today it is incumbent on us to be confident and connecting when it comes to negotiating and handling objections. This process and practice takes time to perfect. Learn as much as you can in this specialist part of the sales and business environment.