Finding Robust Market Conditions in Commercial Real Estate

The commercial property market is always changing, and the shifts and swings each year will move from buying to selling, as well as owning to renting.  Property developments also come and go from the market based on expected growth in a location.

Somewhere in those changes you will find property opportunity to work with the right clients and prospects.  The foundation of your real estate business will come from your database and the people that you are connecting with on a regular way.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Some clients are very active on property matters for the long term, whilst others are irregularly moving in and out of the industry.  Have you categorized your clients and prospects?  Who are the clients that will be doing things soon?  When you know the answers to these questions, you can take some direct action and move on some leads and property requirements.  Timing is everything in our industry ‘game’ so understand just where your clients and prospects sit in the timing cycle of change and activity.

Check your client list

So let’s look at your database and location now.  How well do you know your property market now?   Where are the next opportunities arising?  Have a think about these questions and answers:

 

  1. Where is the vacant land currently that could be the subject of a new development in the future? Whilst property development will come and go from the momentum of the market, future demand will eventually ignite a new building or property complex.  Watch for the zoning changes that could lead to a property release and new development.
  2. What are the classes of property that seem to be creating the most inquiry now and into the future? A regional assessment will help you pick a few property classes that seem to have most of the interest from the market.
  3. What can you do with investors to open up some buying and selling activity? Some investors are very aware of the need to grow or shift certain property holdings in their respective portfolios.  You can achieve some real momentum in knowing what these owners are thinking and planning for.
  4. What are the local businesses looking for when it comes to property occupation? There will be parts of your town or city where businesses like to occupy premises.  Look at the trends and pick those areas.

 

These 4 simple facts allow you to optimize market conditions in commercial property.  Stay close to the transaction momentum and the current listings in your territory.  Listen to what people are saying and identify what they are thinking; pay special attention to investors and local business people.  Within those groups you will find the future property deals that you are looking for.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

Commercial Real Estate Brokers – Why You Should Learn From Mistakes

In commercial real estate brokerage you will make plenty of mistakes on the road to progress. In sales, leasing, and property management, there will be issues, challenges and mistakes.  Every day there will be issues to work through and potential diversions to disrupt your efforts.

Let’s face it; the industry can be complex and competitive.  You will not win every client or listing that you chase, although you should win more times than you lose.  There will be challenges in your career and sometimes you will make the wrong choices (or no choices at all).  The key message here in commercial real estate is that you can learn a lot from your mistakes and the mistakes of others.  You can make adjustments to your efforts; that is how you progress.

A Real Broker Mistake

Let’s take a broker story as a case in point.  You will learn from this story just how easy it is to divert and take the wrong directions in our industry.

This is a 2014 story of real ‘mistakes’ of a real estate person working an inner capital city suburb in industrial property sales and leasing.  Here are the facts of the market to set the scene:

  • The sales and leasing season for a calendar year in the location was typically mid-February to late November in each year. That means most listing business generated could be derived during that time.  The property market always declined significantly between December and early February.
  • Around the change of financial year in June to July, things usually slowed for a few weeks in both business and investment. After that time the activity ramped up again for the balance of the year.
  • In the location things were generally active and ordinary. In other words the sales and leasing deals could be completed with specific brokerage and agent effort.  Some businesses and investors generally were looking to move or invest, so there were things that could be achieved locally.  The opportunities were there for those brokers and agents that could focus on prospecting, and stay on task.

So let’s look at the story about this agent.  For the purpose of the story I will call the person ‘Rex’ (name changed for obvious reasons).  Here are some facts about ‘Rex’ and what happened to him in 2014.

  • Rex is not what I would call a highly experienced agent. He still has a lot to learn about commercial, industrial, and retail property.  He had graduated into the commercial segment following many years in residential.  He did what most real estate people in such situations do; he had started to work industrial segment given that it is not overly complex and yet it is reasonably active as a segment.
  • After a couple of very slow years trying to make things work, he changed brokerage again and started a new location. He had a good start to the year between March and July 2014 due primarily to his prospecting activities including growing his market share in a particular location.  He had learnt how to prospect and had taken steps to deliberately grow his market share through database creation and direct marketing.  He was talking to a lot of people in a regular and ongoing way.  Soon his database was growing and enquiries were coming in.
  • Before I go too far here, I will go back to the point that Rex still had a lot to learn about certain market segments and property types. Commercial real estate is like that; there are many things to learn, and personal experience will usually be the only way to achieve the learning curve and local knowledge.  So Rex was still an ‘ordinary’ agent learning about the commercial, industrial, and retail segments.
  • In early 2104 his prospecting activities had created some positive results. Given that personal level of success and momentum, he had converted a few good investment listings in a location where investors liked to purchase property.  He took his new listings to the market using the auction method of sale.  It was the middle of 2014, and the right time to do property auctions.
  • So the auction campaigns started. He had created some reasonable levels of enquiry from each campaign given that he had a few good listings to market in a comprehensive way (quality listings will always create that marketing advantage when it comes to property enquiry).
  • Whilst the auction campaigns were underway, Rex did very little direct prospecting and new business generation. He simply focused on his new listings (that was a bad move).
  • So back on the listings he had, whilst there were not a lot of buyers active on each property at that time, there were still a few good and interested buyers, and that was really all that was required to get the listings locked away on successful contracts.
  • He had sufficient enquiry to convert and close on the sales of all three listings at around two million dollars each in sale price. Rex had achieved a reasonable level of personal income through commissions.  It should be said that this was the first reasonable income Rex had achieved for quite some years and that income was only as a direct result of his prospecting and personal effort.
  • With the commissions created, Rex started (falsely) to think that he was a ‘top agent’ and the ‘go to man’ for the location (this type of self-belief can be a real problem, and in this case was). After his recent sales, he took a short break from the business with a brief holiday, and forgot about prospecting entirely for the rest of the year.  This was in September 2014.  Essentially he did not prospect for new business between September and Christmas in that year; he was still living off the enjoyment of his recent sale commissions.  His ‘ego and attitude’ were however still quite high at the end of 2014. That is what you call a ‘false belief’ leading to ‘real shortcomings’.
  • When January 2015 arrived, Rex had no listing momentum and flow, no new stock, and no commissions in the pipeline. This is where the problems started to occur.  He was running out of money and had no momentum in the marketplace.  He was starting to consider family and lifestyle problems that would soon evolve.
  • To cut a long story short, at the start of 2105 Rex knew that he had to find another segment of the property market in which to start afresh. Whilst he still had plenty of self-belief, he had little self-process; he had to start rebuilding his momentum, career and market share.  He had let himself down when it comes to property activity, diligence, focus, and action.

When you look at the facts from the story, Rex knew exactly what to do, but consistently failed to take the required action.  His inflated ‘ego’ from the July sales in 2014 had shifted his focus away from the things that matter (prospecting).  The market soon moved away from him and the good listings went elsewhere.  There are always plenty of competing agents ready to take up on the mistakes of others and that was exactly what happened to Rex.

The moral of the story

This is a real story from the property market (Rex is not the person’s real name).  We can learn from this.

We will all make mistakes in the industry, and Rex is not unique or special.  He failed to see what was happening and then failed to do something about it.  He should have adjusted his focus and activities earlier rather than later.  He should have kept his ‘ego’ in check.  Confidence is a good thing; ‘ego’ is not.  Develop plenty of confidence in our industry from the deals that you dot, but keep the ‘ego’ out of the equation as it will not attract the clients or transactions.

There will always be ‘peaks and valleys’ in our business.  When you are at the top of your game, still focus on the small things and the important things.  Build your confidence.

Commercial real estate is an industry where the rewards are large and generous for those that take correct actions in a regular and ongoing way.  We should all learn from our mistakes and adjust our actions accordingly.  Look for the mistakes and resolve them.  We can all learn something from Rex.

This year

So let’s fast track the full six months now to the middle of 2015.  Rex is still struggling in the marketplace to gain any traction and listing activity of consequence; he is not a prospecting directly, logically, and effectively into the location.  He is losing ground.

He is now trying to take any shortcuts possible.  He has become desperate and disorganised.  He has failed to understand that he was and still is the problem to his current situation.  Unless he changes his personal actions and focus, nothing will improve.  It is quite likely that Rex will soon be slipping out of the industry.

The central message

There is one fundamental message that flows from the story.  You can learn from the mistakes of others in the industry, and you can also learn from your own mistakes.  The important thing here is that you do quickly see where the mistakes are happening, you learn from them, and you adjust your efforts specifically and consistently.  Make the adjustments sooner rather than later and track your progress.  That is how you can succeed in commercial real estate brokerage.

You can get more tips and ideas to help with commercial real estate brokerage in our eCourse ‘Snapshot’ right here.

Commercial Real Estate Brokers – Ways of Achieving Success Through Effective Personal Marketing

The marketing process in commercial real estate brokerage should never be ‘generic’ with perhaps one exception and that is in the promotion of ‘open’ listings.  ‘Open’ listings generally waste everyone’s time, and will usually only sell or lease through some factor of ‘luck’.  You can’t base your commercial real estate brokerage business on ‘luck’.

How Are Listings for You?

Some agents and brokers will claim that they must list ‘openly’ because ‘that is the way the market is for them’ and the only way they can get new listings.  Whilst I accept that fact initially for those agents that are very new to the industry, I will say that the best agents avoid ‘open listings’.  They grow their profile and market share consistently over time so that the new clients and prospects locally will come to them to list properties for sale and lease.  That is when it is really easy to demand ‘exclusivity’.

If the client really wants the best agent then they must accept the terms of engagement that the agent is offering.  They are then your terms!  Are you ready to package your professionalism and sell it?

Are You the Expert?

If you have a comprehensive and specialised personal brand as a local property ‘expert’, then it stands to reason that people will want to list their property with you rather than some other ‘random’ agent or groups of agents.  Take a serious look at your personal marketing processes.

Taking this point further, your market share and listing conversions of an exclusive nature will largely depend on your ability to establish your brand as the ‘go to agent’ for your location and property speciality.  You can and should invest more time in building your real estate image and speciality.

Here are some rules to help you do that:

  1. Your Listings – Understanding the point that I made earlier about ‘exclusivity’, make the marketing process very special and deep with all of those high quality listings that you are bringing in. It is difficult for other property owners and investors to ignore the activities of any agent with the best properties and the best marketing ideas.
  2. Other Agent Listings – If you are stuck for current listing stock, use other agent’s listings in a location to talk to local property owners and tenants nearby to any listing. Some simple questions and conversations will help you find the next listing in the same street or perhaps a business owner looking to relocate.
  3. High end marketing campaigns – Get some traction with your marketing by seeking and converting vendor paid funds. If your advertising efforts on any quality property are of a higher professional level than that of your competitors, you should be attracting the new business leads and enquiries very easily.
  4. The personal approach – You are the marketer of your business. You sell your services well then people will choose the agent that they trust and believe has the better business and market coverage.  Is that you?

Simple marketing rules like these help you consolidate market share and listings as an agent or broker in commercial real estate.  Follow the rules and grow your real estate business.

You can get more commercial real estate brokerage marketing tips in our ‘Snapshot’ eCourse right here.

How to Amount to Something in Commercial Real Estate Brokerage in this Market

Motivation is something that can be considered as an essential ingredient to the success of any commercial real estate agent or broker.  Every day there needs to be a degree of personal motivation in each agent to do the difficult tasks and confront regular challenges in the industry.

Every day there will be issues with clients, listings, negotiations, and marketing activities.  Given that you may have plenty of listings on your books, you can easily get distracted and diverted from the things that really matter.

In saying that, it is preferable that every agent and broker focuses on exclusive listings rather than open listings.  In the open listing situation you cannot control the stock and you have very little control over the client.  You will never really know exactly what is going on with the property at any given point in time.  An open listing is only useful if you want to quote the property to people within your database.

The clients that prefer or demand the open listing process can waste a lot of your time.  Most top agents in the market today will refuse to take on open listing knowing that the real results that they create will come from exclusivity.  On that basis they improve their sales pitch and presentation around the logic and the processes of exclusive listings.  It would be wise for you to consider the same strategy.

Motivation

So let’s go back to the topic of motivation and the role that it has to play in the performance of a real estate agent or broker.  If you have a system to work to each day, it is quite easy to stay ‘on track’ when it comes to the essential real estate tasks such as prospecting, marketing, and negotiating.  In that way it is easy to recognize when a time wasting issue arises.

You can create a ‘victory log’ to help you see where results are being achieved and momentum is occurring.  In that way you can see how some more activity directed towards the right things will help you get further results.  Here are some factors to merge into your ‘victory log’ on a daily basis:

  1. Cold calling activities – Track the number of cold calls that you make every day to new people in your local area.  As part of that process you can track the number of calls that convert to meetings.  Make it a target to convert two new meetings every day from your calling activity.
  2. Meetings per day or per week – The commercial real estate industry centers very much on the personal approach and the number of people that you know.  On that basis the number of meetings that you create per day and per week will help you get traction and dominate the local property market.  As mentioned in the previous point, an achievable goal would be two new meetings per day with new people.
  3. The listings per week – The number of listings that you create each week will be important to growth of market share.  Some of those listings will be converted to a successful transaction.  Conversion rates are always higher when it comes to exclusive listings (as well as a shorter time on market), and on that basis ensure that your focus is always on exclusivity.  Open listings can waste a lot of your time given that you have no control the stock or the client.  So in tracking the number of listings that you create, give priority to exclusivity; it is questionable whether it is even worthwhile in tracking the numbers of open listings for the reasons mentioned.
  4. Successful transactions and commissions – Some deals take a long time to put together.  A continual focus on active transactions and the status of negotiations will help you lift your conversion rate and ratio of results.  So the message here is that you should monitor your transactions, your clients, your commissions, and your negotiations.  Practice and role playing will always help you develop your professional skills around the things that really matter and the high quality properties that you list.  Track the number of successful transactions that you close on a weekly and monthly basis.  Also track those numbers quarterly and relate them back to your business plan and business goals for the year.
  5. Growth of database – The database that you use should be updated each day so that all the current conversations, meetings, and listing quotations are accurately tracked.  Make sure that you fully understand the capabilities of the database software you are using, and how it is integrated into your marketing processes, social media, and listing activity.  Ideally, your database should be growing on a weekly basis and that should be as a direct result of a prospecting and cold calling plan.

Taking all of these things into account, you can see the benefit of creating a victory log as part of the goals and targets process.  In commercial real estate brokerage your motivation and your momentum will grow when you track the right numbers efficiently and directly.  Look for the incremental improvements in all of the five categories mentioned, so that you can see what is working for you when it comes to growing your property business.

Creating More Customer Inquiry In Commercial Real Estate Brokerage

One very important part of the commercial real estate process is to do everything possible to get the telephone to ring with fresh and valuable property enquiry.  Quality properties create more customer enquiry, as an agent you should be focusing on identifying and creating good quality listings within your brokerage.

It is a fact that a few good listing campaigns comprehensively marketed into your local area will create many leads and opportunities into the future.  That being said, it is necessary to track and measure the entire enquiry coming to you across all of the listings; you will see the strengths and weaknesses of every campaign.  That is where your database will be valuable and integral to tracking the marketing processes you adopt.

When you track and measure the inbound enquiry coming to you or your office, you can understand the factors of marketing that are working in today’s property conditions.  Some methods of sale and methods of lease are far more effective than others when it comes to the local area and the property type.

Here are some ideas to help you with strengthening the customer enquiry for your brokerage:

  1. Refresh the listing – During the average promotional campaign you will find that the levels of enquiry will improve when you refresh the listing and or adjust the price and the marketing campaign.  On that basis every listing should be reviewed every 14 days for both refreshing and rewording.  Condition your clients to accept price adjustments on a monthly basis.
  2. Attract inbound enquiry – You will see that particular methods of marketing are far more effective than others in your town or city; adopt the marketing methods that work and drop those that are low in converting enquiry.
  3. How did they reach you? – Find out how a person has reached you and what triggered that connection.  It could be a particular listing or your market share that attracts the enquiry.  Over the longer term you should see a lift in personal profile and inbound enquiry based on that.
  4. Use professional photographs – Every exclusive listing should be enhanced with quality photographs.  There is a cost to the process and that cost should be vendor paid.  You can see and reap the benefits of quality photographs in your property marketing campaigns.
  5. Use 3 different advertising formats – When promoting a single property, have 3 different versions of advertising that can be placed on different industry portals and brokerage websites.  Different advertising copy and different layouts will be valuable in broadening the enquiries that you get from the target market.
  6. Use success letters – When you have listed or sold a local property, use the success letter process to spread the word to local businesses and property owners.  The success letter process is most effective when you cover the properties in the immediate vicinity of the subject listing.
  7. Write Property Editorials – Whilst newspapers have limited promotional value today in property marketing (given the impact of the internet), the newspapers still need good quality editorial to support and drive readership.  With every exclusive listing write and submit editorials to the local newspapers. Support the editorials with high quality photographs.

So there are plenty of things to do here with building customer interaction.  Effort should be applied to exclusively listed properties where you can see results and enquiry growth potential.

Buckle Down for a Big Year in Commercial Real Estate Brokerage

As an agent this next 12 months can be a very big year for you in property commissions and listings.  Many property markets are showing signs of consolidation and activity.  Businesses and property investors are looking to upgrade or shift focus.  That means sales and leasing activity.

Revisit your database and everyone in it to see what those people intend to do in the next twelve months with commercial and retail property.

There is a ‘golden rule’ in commercial real estate that needs to be remembered if you are to improve your results.  The agent or broker with the exclusive listing stock will control the inquiry.  Top agents focus on converting exclusive listings.

Most top agents will be running with up to 15 exclusives at any point in time.  Given that those top agents will convert those listings to completed deals at a ratio of better than 60% you can now see the importance in lifting your listing numbers.

Here are some ways that you can make this next year very successful in commercial real estate brokerage:

  1. Specialize even more in your territory on the things that are attracting the attention of buyers and tenants.  Drill down into the facts of the market and how you can attract more inquiries and top clients or investors.
  2. Create some powerful marketing campaigns on vendor funds and exclusive listings.  On a monthly basis total up the marketing funds that you have obtained from your clients and prospects.  On a month by month basis, those numbers should be increasing.
  3. When you have a listing it is the start of the process and not the end.  Some agents lose focus when they convert the listing; real effort is required to spread the word about a quality property and offering.  Understand what the property is and who it will attract.
  4. Devote much of your marketing efforts on exclusive listing creation and conversions.  When you control the listing stock you control the property, the marketing, the deal, the negotiation, and the client.
  5. Look at additional promotional processes that you have overlooked or not yet mastered.  That can include blogs, articles, editorials, email newsletters, social media, or website exposure.  Your online profile should be strong and growing; the search engines today are looking for valuable content to assist the searching public.  You can attract those search engines by writing content and adding it to your website and blog.

All of these things create leads and opportunities.  Load valuable information into your database and lift your levels of client contact.  This next 12 months can be a massive year in commercial real estate brokerage if you set the right ‘wheels in motion’.

5 Ways to Win More Commercial Real Estate Listings

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.