Commercial Real Estate Leasing Agents – Taking Effective Tenant Enquiry is Easy to Do

In commercial real estate brokerage, the tenant prospecting process is a good part of the leasing business where you can create plenty of leads and listing ‘churn’.  Tenants will tell you so much about their property occupation, the landlord, and the neighbouring properties and businesses.  Talk to tenants every day and you will find lots of new business leads and listing potential just waiting to be acted upon.

Local Source of Information

So it is a fact that tenants are very valuable to the commissions that you earn and attract as a broker or agent.  They are a huge source of market intelligence and business opportunity.  You can track them in your database.

As part of connecting with those tenants you really should have a thorough and complete questioning process that gets to all the key facts of their property occupation and any upcoming change requirements.  You can do that directly and effectively.  It’s easy when you know what to say and do.  You can develop a checklist to the process.

Get to all the tenant facts

Here are some of the main rules to the process:

  1. WHO ARE THEY?: Understand who they are from the outset of the initial approach or enquiry. Ask plenty of questions so that you know who you’re talking to and how to contact them again in the future.  If they will not provide you with the appropriate contact information, then limit what you tell them about the listing and or the property market.  Your information is valuable, and they should trust you from the outset of any conversation.  A tenant that does not trust you is likely to be concealing a few problems and or issues.  They are also likely to be talking to a number of agents in the location.  Spend time with the tenants that are open and honest in their conversations and communications.
  2. WHAT’S UP?: What do they have now? Understand where they are located currently as a business and what they may be looking for in the future.  Drill down on the facts of occupation including occupied area, business function, staffing needs, customer profile, lease terms and conditions, and landlord problems.  From some very simple questions you can understand where you can take the leasing enquiry and create the conversion that you need.
  3. TIMING?: When do they need to make the change? There will be some critical time frames that apply to the leasing and property occupation process.  Some businesses have a timeline to property change.  That timeline can be impacted by annual business cycles, industry trends, and financial cycles.
  4. SHOW ME THE MONEY!: Understand the budgetary constraints applying to the tenant and within the property type that they are targeting. Some tenants have very little idea about recent rental activity and lease occupancy within a location.  They may have high expectations when it comes to changing premises, but little understanding about the rental budgets applying to occupancy in the particular precinct or location.  Don’t forget to include in your review the appropriate levels of outgoings that apply to lease occupancy in addition to any rental strategy or budget.  The total amount of money will be something that the tenant should fully understand and comprehend before they start looking at properties.  Make sure they can afford the property that they are seeking.
  5. THE IMPORTANT THINGS?: Question the tenant about any specific property needs and conditions. Certain businesses have particular requirements relating to property use, security, communications, staffing, and customer interaction.  When you fully understand those specific and special needs, you can match the property more effectively.
  6. WHERE HAVE THEY BEEN?: Appreciate what property the tenant has looked at previously and currently. It is quite likely that they have been working with or talking to other agents and brokers in your town or city.  They will have seen other property listings and developed an opinion of the property market from that process.  Depending on what they have seen and when, you will need to adjust your property short list and inspection processes.

From these simple and yet valuable rules, you can take any tenant enquiry directly and effectively.  It is easy to do and when successfully undertaken will help you shortlist the required properties in the required locations.

You can get more tips for taking tenant enquiries in our eCourse Snapshot right here.

228 Commercial Real Estate Online

Here are 6 audio programs by John Highman for Commercial Real Estate Brokers around the World. 1. Robotic approaches to Brokerage, 2. What you must know about Prospecting, 3. Some rental structures in Leasing, 4. Vacancy as an opportunity, 5. Tenant Advocacy Blueprint, 6. Essential Cold Calling rules.
http://www.hipcast.com/playweb?audioid=Pb0185b893a08500fcaeab8b6fd33f00aZVh7QXpuY2F9VQ&buffer=5&fc=FFFFFF&pc=CCFF33&kc=FFCC33&bc=FFFFFF&brand=1&player=ap21

MP3 File

How to Prepare to Lease a Vacant Office Premises

In commercial real estate today, the leasing of office premises is a relatively easy process to prepare for but accurate facts and property information are required.  In many respects you will only get one chance to promote a vacancy for lease; have all the facts and information under control from the outset.

Real Estate Leasing Agents should help landlords move through the tenancy and property preparation issues so that the marketing of the vacancy can create real interest in the local area and with the targeted group of tenants.  When you are prepared for the lease activity, time on market is shorter and lease negotiations are more direct; in larger office properties and in modern buildings you will also require a ‘tenant information memorandum’ to assist the leasing process.

Here are some tips to help that leasing preparation process occur efficiently:

  1. Get a plan created of the property and or the tenancy to be leased.  You may also require a survey plan so that the lease area is totally accurate in preparation for tenant inspection and enquiries.  If that is the case, get the survey done early so it is not a delaying factor in any lease negotiation.  It is also of some help to the leasing agent to have an accurate plan of this type for the property and premises.  The plan creation process is a cost to the landlord.
  2. Check out the boundaries of the premises and property; inspect the property comprehensively yourself.  Ensure that there are no boundary or premises encroachments.  Remove those problems before any lease marketing or negotiations start.  Premises problems can slow things down considerably in a lease negotiation.  Remove the problems at the start.
  3. Review the premises from a ‘tenant perspective’.  Look at issues as any tenant would.  Question things such as rent levels, lighting, floor coverings, wall finishes, lease conditions, and property availability.  The property must present well in any inspection, so remove any visual problems and physical challenges that could have an impact on your inspections.  Any problems that a tenant can see in the inspection are likely to be ‘discounting factors’ in any lease negotiation.  Some landlords like to ‘hold back’ on the costs of premises preparation thinking that they can save some money or wait until a tenant is located; invariably that can be a big error as the ‘first impression’ that a tenant gets from the property will make or break any lease offer.
  4. The landlord should have considered and created standard lease terms and conditions that are required for any lease negotiation to start.  Those facts will also be required in the marketing and advertising of the vacant premises.  Ensure that the asking rent is in keeping with the comparable properties locally and the other asking rents in the area.
  5. Understand how the tenant will connect into the building services and amenities.  That connection process will include water, lighting, electricity, drainage, and communications.  There will be ‘risers’ in the building to allow the tenant to connect.  You may also need engineering comment and ‘as built drawings’ to help that process occur.

Simple things like these help the momentum in any lease marketing process of an office building or office premises.  Preparation is the key.   Get the facts before you, know the property market, and then understand the client’s requirements and the property.

Talking Shop with Commercial Real Estate Leasing Brokers

In commercial real estate today, the leasing process is a significant opportunity for brokerage fees and commissions.  That being said, leasing opportunity can be optimised through understanding the market and the requirements of tenants today.

A good leasing agent will maintain significant ongoing contact with the business community, tenants in occupancy, and landlords.  A professional leasing specialist will usually have several hundred tenants in their database.  Over time the ongoing contact with those tenants will help with leasing opportunity.  A good database of tenants will give you leverage when it comes to attracting landlords with quality properties to lease.

So the basic strategy behind attracting a lease transaction will be for you to work with available property activity including the following variables:

  • The needs of expansion for particular tenancies
  • The needs of contraction for local businesses
  • Relocation requirements relating to business activity
  • That need to reduce or control occupancy costs
  • Tenants that find it difficult to work with the landlords
  • An upgrade of property type to provide a better business image
  • A tenant looking for the benefits of a new lease incentive as part of changing premises
  • Landlords looking to resolve upcoming vacancies
  • Landlords undertaking a property expansion and change process
  • New properties coming into the market providing project leasing opportunities
  • Sale and leaseback opportunities with existing businesses

It should be said that quality vacant listings will always attract solid leasing enquiry.  That assumes that the rental and being asked is in line with prevailing market conditions.  Any rent that is negotiated today can be shaped and improved over time through a well-structured lease document.  Lease terms and conditions can be improved through the negotiation process on behalf of your client.

To encourage a lease transaction, the overall package of rental, occupancy costs, and lease terms need to be well considered and structured.  As the local leasing specialist, take the time to understand the changes in the market, the requirements of tenants, and the supply of available space.  A successful transaction is a reflection of all three factors.  You can be the facilitator of a successful property transaction.

It should be remembered that a successful leasing transaction can always open the door to a property management appointment or a future sale opportunity.  Asking the right questions and staying in contact with the right people will help with those matters.

If you have chosen this segment of the market as your speciality, there are some basic rules to be remembered.  Here are some of the most important ones:

  1. Quality properties will always lease faster than average ones.  For that reason, your prospecting activities should be focused on the best properties in the region.
  2. Ongoing tenant and landlord contact will be a daily requirement.  Spend at least 3 hours per day talking to tenants and landlords in the market.  You can get a significant volume of market intelligence through this process.  Tenants will usually know more about the local market than you do.  They will know about those other businesses that are looking to change and move.
  3. The tenant advocacy process offers significant leasing opportunity.  That being said, it is best to focus on quality tenants with established businesses.  You can also focus on the larger properties as part of that process so that the fees generated will be significant for the amount of work involved and the area under lease.  Small properties and small tenancies can be a large amount of work when it comes to finding a tenant, and closing on a deal.  Recognise the opportunity of working with better properties and larger areas.
  4. Look at the rentals that apply to the average lease transactions within your town or city.  Rentals are usually quite high when it comes to retail property.  Office property rental will usually be reasonably high for the volume of area leased.  At the bottom end of the scale, industrial property will offer a lower rental per unit of area.  On that basis the fees can be similarly low unless you are leasing a very large industrial property.  So you have some choices to make when it comes to your choice of property to lease.  You should also select the best regions to focus your leasing activity within.

There are always good properties to lease in most towns or cities.  Balance the rental to the prevailing market conditions, and the needs of your client, be they the landlord or the tenant.  You can certainly build a good career in the property industry focusing on leasing opportunities.

Getting Negotiation Leverage in Commercial Real Estate Agency

In commercial real estate agency each day, we are negotiating with many people across a number of challenging situations.  Our ability to negotiate is a key part of growing market share and improving our commission opportunities.  This then says that we should practice our dialogue and a negotiation skills at every opportunity.

A good negotiator in commercial real estate is one that understands the circumstances, the market, the documentary processes, and the intentions of the parties.  It is sometimes a difficult equation to bring together.  The clients that we serve expect their agents to be experienced and experts when it comes to the negotiation process.

So what are the negotiation stages and situations that we strike?  Here are some of the main ones:

  • The cold calling process is really a negotiation to establish a meeting with a new person.  Your dialogue needs to be exemplary when it comes to communicating and connecting across the telephone.  It is a specific skill that requires regular ongoing practice.  In this way you can build connections with fresh prospects for your pipeline of new business.
  • A cold call can also be something that applies to dropping into a local business to introduce yourself as a property specialist.  The dialogue in that situation is totally different to the telephone process.  This strategy can also reap significant rewards through practice.
  • A sales pitch or presentation with a new prospective client is a negotiation to achieve a listing.  That listing will involve a marketing package, marketing strategy, and listing process.  It is interesting to note that the top agents within the market are very good at converting a new property to an exclusive listing.  Those more ordinary agents in the market usually take the lesser alternative of an open listing.  Unfortunately the ordinary agents struggle with market share as a result of this, and have little control over the deal that could possibly evolve.  The message here is quite clear.  If you want to convert more exclusive listings to grow your market share, then you need to refine your sales pitch and presentation process.  A role playing strategy in your sales team meetings will help.  Personal daily practice will also be necessary.
  • When you find a suitable tenant for a buyer for a property, another negotiation stage will evolve between the parties.  It is wise to remember the requirements and intentions of your client as the negotiation proceeds.  Every stage of a negotiation should be carefully checked and documented.  When you get to the final stages of offer and acceptance, the agreement document between the parties should be legally accurate, comprehensive, and correct.  Some property transactions can be quite complex and for that reason you will need outside assistance to formulate the final document from the offer and acceptance situation.

Given these very common negotiation situations, you can see why dialogue improvement will help you strengthen your market share and commission opportunity in commercial real estate agency.  Practice is required.