If you are a commercial real estate leasing agent, you can get plenty of market traction if you work with local tenants and business owners. They tell you things and that then leads to listings and better commissions with quality property transactions.
Always err on the side of leasing quality when it comes to any property listing or property choices. Why is that? Consider these things:
- Quality properties create better levels of inquiry
- The rents are higher per unit of area
- The commissions are better due to the higher rents
- The tenants are drawn to a quality listing
- Modern buildings offer a level of improvement and services that most tenants require
What are the Leasing Positives?
There are some good things evolving from working in property leasing and resolving tenant needs. Think about these:
- Leasing leads to Property Management – Many landlords are open to property management services when you have just solved a complex leasing issue for them.
- Leasing leads to Sales – A lease today is likely to be a property sale in the future, particularly if you do a great job for the landlord property investor.
- Tenants share local property information – Local tenants will tell you many things about their location and other nearby businesses.
- Landlords want help with tenant placement and tenant mix – Whilst a landlord may have a fully occupied property right now, many leases may be in need of upgrade and renegotiation at the right time in the future. As a general rule, weaknesses in leases can be negotiated away over time with better leases and rents.
- Rental and lease strategies are highly specialized – There are many different types of rents and leases; they can be mixed and matched to the investment requirements of the landlord and or the occupancy needs of the tenant (it just depends on who you are engaged by as a client). You can drill down into market rent strategies and leasing alternatives. That will then make every lease negotiation more valuable for the clients that you serve.
So you can do a long way in the property market as a specialized agent or broker by starting from a ‘leasing base’. Understand the linkages between the 5 points mentioned and build your skills and property market around them.
In closing on these points, recognize the differences between office, retail, and industrial property. Understand the leasing opportunity in each property type, and then choose the segment that offers you the most market activity over time.
You can get more commercial real estate broker leasing tips in our ‘Snapshot’ eCourse right here.
In commercial real estate brokerage, you will find challenges when it comes to every real estate team. The disciplines and business processes across sales, leasing, and property management will vary, and on that basis you need to know that every member of the team is implementing the necessary skills to serve the client base and improve the business.
Every brokerage principal or manager should be closely interacting with the client base to identify and determine any factors of under-performance or client concern. Invariably most clients suffering the effects of poor agency performance will tell others about their concerns before they tell the relevant agent or brokerage; over time they can do a lot of damage to the brokerage brand. It is common for a client to move on at the end of an agency term of appointment where the listing hasn’t been well serviced or communication with the client has been below par.
Whilst you may spend a lot of time encouraging the agents in the brokerage team to improve personal skills and strengthen opportunities, are they really implementing the necessary skills and habits to move to the next level? The only way you will know that is through tracking results of each agent when it comes to the core factors of the business. Most particularly they are:
- The type of prospecting activities undertaken on an agent by the agent basis
- The amount of prospecting undertaken each day by each agent
- The conversions of meetings with new people as a direct result of prospecting
- The leads and opportunities that evolve from client meetings and prospect meetings
- The number of listing presentations made each week
- The number of listings per agent on an open listing basis versus an exclusive listing basis
- The time on market for each exclusive listing
- The amount of commission generated per lease transaction and per sales transaction
- The number of new clients entered into the database by each agent on a weekly basis
- The accuracy of the database when it comes to client contact details and current information
- The number of clicks and hits that apply to listings placed on the Internet by each agent
- The way in which each agent will integrate social media to listing opportunities and marketing efforts
- The amount of vendor paid marketing funds converted on a weekly basis for current listings for each agent
- The listing refresh process and frequency that applies to current listings with each agent
- The feedback that each client may give when it comes to the services provided by each agent with the listing
So there are plenty of things to track here when it comes to identifying performance opportunities, as strengths, and weaknesses. The rules should apply across the brokerage and should delve into the activities of each agent. You will soon see and identify the agents that are under-performing, allowing you to take the necessary steps of adjustment in each case.
The commercial real estate industry can be highly rewarding in so many different ways when appropriate tasks and opportunities are seized in a timely way. Almost every element of success in the industry will be centered on the activities of individual agents. Encourage your people in the business team to do the right things in the right way and to make adjustments where necessary.
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, it is very easy to get swamped with daily events and reactive issues. Many people will want a slice of your time. If uncontrolled, this can lead to a downturn in listings and market share. In simple terms, you need to implement a system that allows you to stay ‘ahead of your game’ in commercial real estate.
The rewards in the industry are many, providing you stay on track and implement the correct system. It is a personal process that cannot be delegated. Here are my top seven tips to help you stay ahead of your game as a top agent or broker.
- Start the day with focus. Each evening you should be preparing for the following day by planning your time and the key issues that need to be done. Identify the four or five key issues that will have maximum impact on your client base, listings, and market share. Those things should be a high priority in your daily action plan. Get all of those things done before you do anything else. When you feel in control, you get more things done. On that basis, control your diary at an obsessive level.
- Understand the high value of prospecting and growing your database. Devote approximately 2 or 3 hours to prospecting and client contact. Split that time equally between new contacts and established contacts. Track all of the conversations, the meetings, and the presentations that you make, so that you can see when your ratios and numbers are improving.
- As a general rule, focus on exclusive listings more than anything else. The exclusive listings will allow you to build market share, focus your inspections and negotiations, and service the client comprehensively. The agents that struggle in the marketplace are typically those that have difficulty with converting exclusive listings. You simply must control the listing stock.
- There is a big difference between being proactive and reactive in the industry. At least 40% of your day needs to be proactive and in that case should be directed towards prospecting, marketing, and client contact. Unfortunately you cannot remove the reactive element of the industry given that you will be working with many different people who will impose on your time. That being said, take the necessary steps to control the impact and limit the exposure that you have to other people’s priorities. Manage your time accordingly.
- Every listing can be extensively promoted, and then adjusted to the market conditions. When you have sufficient marketing feedback on a particular listing, you can make the recommendations to the client that will shift the enquiry rate and the inspection results. Don’t take too long to get to the point of repositioning.
- Review all of the listing stock locally including those listings that belong to your competitors. When they place a signboard on a property, make contact with all the other businesses and property owners in the region surrounding it. They may like to compete with the other listing in the same street.
- In your town or city, you will find that commercial property ownership is typically for a period of 5 to 10 years. At or during that time, the property owner is likely to expand their portfolio, or replace the property asset with another larger property. When you track the cycles of sales from the region, you can identify the best clients to work with for upcoming property activity.
When you look at a list like this, there are plenty of issues to action and matters to get under control. I go back to the point that you really do need to be proactive and not reactive in this industry. Spend at least 40% of your day getting involved in proactive issues and strategies. Soon the commercial real estate market will open up with opportunity in both listings and future clients. Stay on track to your plan.
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.