There are differences to consider in a sales pitch for a lease listing in commercial or retail real estate. You are working with elements of rent, vacancy factors, supply and demand, property types, and certain target markets of tenants. Landlords need a bit of help in knowing how you see the ‘attraction factors’ that apply to their property. Tell a story about their property and how you will move on the leasing requirement; demand exclusivity for your intense focus and time commitment.
Before going too much further here, it should be said that the leasing part of our business is very lucrative as you can connect with plenty of local landlords and that can lead to sales appointments over time. Be prepared to work with lease listings and convert them; go ‘deeper’ and make direct calls to local or targeted tenants.
Quality is important in working with lease vacancies and the different properties. That is a rule to ‘live by’ in brokerage. Choose the properties that are likely to create tenant interest. Know what motivates a tenant to look at or take up a property. That knowledge can be gained and used as you talk to plenty of local businesses.
Listing Facts for Presentations
Take every potential lease listing and do a ‘SWOT’ analysis before you engage with the landlord client. You are then prepared to ‘pitch’ for the listing. Here are some things for you to talk about with the landlord as the client for you:
- Levels of enquiry – show the landlord what is happening with the inbound enquiry and list the questions by a group as to what tenants are looking for. Will the landlord’s property satisfy that list of questions?
- Property types – put the client’s property firmly in a property grouping for the zone. At that point, you can then tell the client what they are up against with other listings and lease offerings.
- Location preferences – explain how different tenants look for location advantages such as roads, transport points (ports and airports), location to end users or markets, and other local businesses. Some locations are more attractive than others when it comes to those elements.
- Target marketing – shortlist a few tenant types that will be valuable in the target marketing process. Your promotional strategies can then be direct and deliberate as you spread the word about the property. Tell the client how you will do that.
- Local area comparisons and coverage – list the competing properties in the precinct, and then take some photos, get the property facts in each case, and look at the strengths and weaknesses of each property. The competitive position for the listing is then something that you can talk about with the client and make some clear recommendations.
In saying all these things, simplicity is important in what you say, do, show in the listing process or pitch. Help the client see and hear how you can move things ahead with a direct focus on results. That is the best way to pitch for a commercial real estate lease listing. Be different, real, and relevant to the property and the client.
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 leasing and sales you can find plenty of leads and opportunities when you target building occupants in a regular and ongoing way. Research your listing territory by building and then split those buildings up into tenants and businesses. Make direct contact.
Some business segments and industry types will be under pressures of change at different times during the year. Local economic circumstances and business sentiment will drive property change for some businesses and industry types.
The Canvassing Process
Assuming you can get this process underway, here are some concepts to feed into the commercial real estate canvassing process:
- Their business intentions – When you take and review all the tenants in a location, many will have future intentions to feed into their movement and growth plans. Customers and staff all place pressure on a business and with how things are done. In a manufacturing segment where industrial property is involved, property configuration and use also rises to the top of the ‘planning’ list. Most property decisions are made just before or after a change of financial year. If you stay in regular contact with business owners and leaders, they are likely to remember you when a property challenge or change arises.
- Factors of expansion and contraction – Some businesses need more or less space. Canvass your territory every day and look at how some businesses seem to be trading. If the property is of an industrial nature you can usually see pressures of change and occupation in and around the property. Observe what you can. Ask plenty of questions. Meet more local people.
- Relocation requirements – Some businesses need to be located close to transport, highways, raw materials, and customer markets. Find out how those factors integrate into your location and property types.
- Difficult landlords – Some landlords are notoriously challenging and unsupportive of tenant occupancy and comfort; those landlords can focus too much on rental returns and less on property performance. Over time that can lead to a general exodus of tenants from a property. Look for tenants that are disgruntled with the landlords in property ownership. Check out locations for distressed tenant mixes and properties with higher vacancy factors. There will be reasons for issues like that happening.
- Occupancy costs – Every tenant is concerned about paying rent and other occupancy costs. You should know what the rental averages are for a property and a lease by property type and location. If a property is aggressively rented, the vacancy factor is likely to climb over time. Distressed tenants are likely to move. That then is a leasing prospect and opportunity.
Look further into buildings, tenant lists, property occupancy, and business activity. You will always find leasing opportunities with tenants wanting to change location.