To be successful in commercial real estate brokerage you have to know how to negotiate through the challenges that you strike in prospecting, marketing, pitching, presenting, inspecting, and closing on your specialty property types.
It stands to reason that your negotiation skills are really important in what you do every day. You have to ‘think on your feet’ as you hear about the other person’s concerns and perceptions in selling, leasing, or managing property.
Some clients and prospects will present you with unique challenges as you move a property campaign or issue forward. What you can do here to lift your conversions is prepare and practice your responses with the most common challenges.
Each week the entire sales or brokerage team can practice their responses to the common problems and issues that they find and strike each week. They can share the issues that they find as part of client interaction and prospecting activity. The team can learn from each other. Through practice and sharing within the team, negotiation skills can improve.
Negotiation Skill Development
Here are some ideas to help you lift your negotiation skills as a team or as an individual:
- LOCAL PRESSURES: Be prepared to adjust your skills based on the pressures and the facts from today’s property market. Understand what’s happening with enquiry, current supply, and future occupancy predictions. Look at the property and the local property market from the perspective of a tenant, an investor, and a landlord. Assess the challenges in each case. You can then do a swot analysis based on the challenges that you see today. Share those challenges and your responses within the team.
- HOT TOPICS: There will be certain hot issues that are always rising to the top of a typical property negotiation. Those hot issues will be a negotiation practice priority when you are considering your skill development personally and within the team. Issues can be specially considered such as the over pricing of a property, the failure to accept market conditions, or unrealistic expectations of the client or prospect from a negotiation. When you look within the disciplines of commercial sales, leasing, and property management, there are always common issues that you strike in a regular and ongoing way.
- FEE SOLUTIONS: The fees that you learn and the commissions that you charge are also important factors of negotiation priority. Be prepared to pitch and sell your services in a comprehensive way and at a reasonable fee; that will involve negotiation practice and improvement. Can you support and argue the value that you bring to a client from a fee perspective? Ultimately the client just wants a good result in a timely way and they don’t want to pay too much for it. Your fee argument and commitment should be built around an expectation of results. As we all know, the cheaper services offered by less professional agents in the industry are ultimately counterproductive and time wasting for the client.
The message here is that you can do a lot for yourself and within the team when you practice your negotiation skills in a regular and ongoing way. Take into account the existing factors of the property market and the pressures that you experience with your clients and prospects. Practice your professional negotiation skills based on the challenges of the commercial property industry today.
You can get more negotiation tips for Commercial Real Estate Brokerage in our ‘Snapshot’ eCourse right here.
In commercial property management, the process of income improvement is fundamental to the performance of the asset for a property investor. There are many ways the income for a property can be improved; the greater number of tenants in a property, the easier the process is. If you have a single tenant, then your options are limited.
When the property market is slow and tough, the income from the property is more important than ever before. The basic rule is to minimize the vacancies within the property and to optimise the occupancy given the available tenancy space.
Here are some further ideas for property managers to improve property income for the landlord.
- Selecting the right tenants for the property will always be an important factor in the leasing strategy overall and the property management process for the property. In an ideal world, you want tenants that can bring you both stability of occupancy and good business profile. High quality corporate tenants bring an identity to the property that may also attract other tenants to your other vacant tenancies if and when they arise in the same building.
- Rent review terms and conditions are created in and from the initial lease negotiation. To a degree, they will be shaped from the pressures of the particular lease negotiation. The lease negotiation will then be influenced by the prevailing market conditions. All of that being said, the rent review terms and conditions should be suitably shaped to improve the landlords position and rental income. Many agents and property managers choose to use or negotiate a rent review profile for a lease that is indexed to the growth in CPI. In most cases, this process only has benefit to the tenant given that the rent increases in a limited way. It is better to target rent reviews that are established to a more substantial rental increase for the landlord; that can be through a fixed percentage increase, or a fixed amount increase. Market rent reviews are also useful and worth considering, although it does depend on the property, the location, supply and demand of vacant space, and the prevailing market conditions. In the case of a property that is only average in location and presentation, it is better to choose less market rent reviews and more fixed increases. The income from the property is therefore more predictable.
- Options are useful when considering the leasing of a property. It is always wise to remember that lease options will tie the property up for a number of years beyond the initial term. Options for renewal can remove some elements of control from the landlord, and on that basis they should only be used where the landlord feels totally comfortable with the process of giving the tenant an option for a number of years. In older properties that face redundancy this can be an issue.
- Extra rental areas can occur in any building. They may be created for storage, signage, and the use of special areas in the common zone of the building. The extra rentals may be established on separate licence documentation.
- Vacant space optimisation should always be considered. A creative property manager or leasing manager will look at the variations of occupancy and how vacant space can be fully leased at a top rental. Other tenants in the property may be candidates for taking up vacant space if they need to expand.
- Tenant retention plans will help you keep the right tenants within the property. You will also help you identify those tenants that should be moved on at the end of lease occupancy and expiry.
A commercial or retail property today requires creative thinking when it comes to income optimisation. There is a fine balance between charging too much rental and charging the right rental. If the balance is not achieved, you can finish up with excessive vacancies within the property and a lack of potential tenant enquiry. This is where an experienced property manager or leasing manager can provide the knowledge and experience to a landlord. Watch the property market and the properties that you compete with; the tenants that are out there are doing the same thing.