Most years in commercial real estate will dish up a variety of market conditions. You have to be versatile and driven as an agent or broker. If something is not working for you, look for the signs and then implement change. There are plenty of people to watch and use as role models.
(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)
What are the signs?
Top agents leave a trail of skills and information that you can replicate. Watch what they are doing with their listings and marketing, and then pick the best activities for your own implementation. Apply your own twists to a property initiative; there is no point in being ordinary in commercial real estate today. Learn how to stand out as the person that commands the market and the enquiry.
If you are struggling in the market place, then create some major changes in your business and marketing efforts. So how do you do that? Try some of these for starters:
- When you take a property type and specialize in it. You can monitor key performance indicators and weave those indicators into your client presentations and marketing recommendations. Real facts will help you connect with the client. Show that you are a critical part of the marketing process. Tell the client exactly what you will do if the client appoints you as the agent to resolve their property issue.
- Look deeply into your client relationships. Some of those clients will be well placed to take action on a quality listing. Keep your VIP clients fully briefed on the best listings as they come to market. There is nothing wrong with holding an inspection early in the campaign with your preferred and qualified clients.
- The email marketing process today is something that is part of the business. That being said, you can do it generically, or you can do it with relevance. Why not send your campaigns with some focus or property type in mind? Don’t send out too many properties of different types to everyone that you know. Be more specific in segmenting your Email marketing efforts to business owners, tenants, landlords, and investors.
- Don’t just market your listings online; market yourself. In saying that I mean creating some valuable online property based information in a regular way that can help people. The best way to do that is through a blog and a series of resources and articles shared on that blog. You can then link your social media back to the blog, in that way showing your clients that you are significantly better than the other agents locally.
So there are some good things that you can do here in creating major change in your property and marketing efforts. Don’t be ordinary in commercial real estate brokerage; strive to be different and relevant.
(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)
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.
The commercial property market is a challenge at the best of times. There are plenty of things to do when it comes to commercial brokerage and agency. Each and every day a certain number of hours should be devoted to the prospecting process. That activity will be at a personal level for any agent or broker.
It stands to reason that a good broker will have a successful prospecting model to encourage new clients and listings in a regular way. The earlier that agents and brokers move towards this planning process and its implementation, the faster they move up the ranks of the market with listings and commissions.
Here are some tips to help you with the prospecting process that should be applied to office, industrial, or retail property. Given your local market conditions, you can add to the list as appropriate:
- Understand the activities of the market over the last two or three years. As the market been attracting activity or has it been contracting? It is best to work within a market that has growth and opportunity. It is best to work with property types that have a future.
- Many brokerages employ agents on the assumption that the agents will bring in the required new sales and leasing business. Certainly that is the case to a degree; it should however be observed that a good real estate brokerage will have generic marketing strategies and material to help the agents with their daily prospecting activities. An agent or a broker with little or no support from their principal will struggle.
- It is critical that a broker or an agent get signboards into their territory as soon as possible. Those signboards should be on exclusive listings. Signboard presence will always help local market profile and encourage inbound telephone calls. On that basis you can build your database.
- The Internet today offers significant opportunity when it comes to business profile and property marketing. Every brokerage or agency should have a substantial business website to promote sales and leasing listings. The brokerage should always be updating the website with the latest technology tools to capture inbound enquiries. A database portal is part of that process.
- Set aside 2 hours per day to contact new people through the local area. The easiest way to do that is through a consistent and professional cold calling process. When you have connected with a number of people across the telephone, you can move out into the marketplace and door knock a number of businesses and property owners. Personal contact in our market today is really important.
- Every new property listing will give you an opportunity to talk to many other property owners and businesses in the same location. Every successful transaction will give you further reasons to connect with the market place. Use your existing listings and exclusive listings to connect with the property market.
In looking at these activities, it is easy to see that the involvement of the agent or broker at a personal level is critical. Momentum is required every day to establish a good prospecting model to convert more listings and commissions.
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.
Better commercial real estate listings and clients are frequently ‘just one step away’ when it comes to growing your opportunities in commercial real estate brokerage. That one step involves prospecting and questioning.
The last step to take will be the difference between a top agency and ordinary brokerage; however it is the step that is the hardest to take for many salespeople. Without a prospecting and contact model, many agents struggle between the peaks and valleys of listing performance and commission income.
It takes about 3 months of effort to break into a new level or cycle of listing activity and market share. Three months can be a long time for some brokers to focus and drive the prospecting model ahead. From a ‘competitive’ position that can be an advantage to those agents and brokers that can get organised and stay focused.
So the last step to take is always ‘prospecting’ and that will be ‘getting in front of the right people at the right time’. For that purpose, every agent or broker should have a solid system of client and prospect contact; that will help them stay on track on a daily basis. The outcomes to a good contact system are usually better commissions, more clients, and quality listings.
When you reach out to talk to a new person about their property needs and they decline your services, remember that the listings are just one step away. I go back to the point that extra step is there and it can involve:
- Staying with the contact over a period of time
- Asking the extra questions about sales, leasing, or property management
- Checking out the adjacent properties and businesses in the area around a listing
- Understanding the pressures of property performance, income, and lease management
- Providing a ‘repositioning’ strategy behind the property issues and challenges
- Knowing that other agents or brokers may be under-servicing the client
- ‘For sale by owner’ listings can be a real headache for some clients
Many agents and brokers don’t win listings easily because they do not take the ‘extra step’.
To tap into this ‘pipeline of opportunity’, it is best to have a good database where you can track the information and the leads. Every time you go back to a person for ongoing contact, make sure that you know what happened and what was discussed at the last point of contact. The client or prospect will remember those facts and will be impressed by your diligence in process and understanding.
You can get more tips like this at our main website here on commercial real estate training.
In many respects, you as the local commercial real estate agent will have some geographical territory and property type in which you specialise. When you specialise, you can provide much more value to the client with comprehensive local market information. It also helps you greatly when it comes to pricing and marketing solutions. Here are some tips from our Agents Newsletter.
To help you here, you can create a property inspection report process to be used for many different reasons and client requirements. The report can become a checklist around which you can base your recommendations and marketing strategies.
Here are some categories that can be merged into your property inspection report. Add to the list based on your specialist property type. Also add the geographical factors that may have an impact on any listing.
- The ownership of the property will need to be completely checked against the information provided by the client. Make sure that you’re dealing with the right people and decision makers.
- Review the description of the property and the title. Check out any encumbrances and rights of way that may have some impact on the title, the tenants, and the property ownership.
- You will sometimes find that there are issues relating to neighbouring properties and the local precinct that are not detailed on the title. Boundaries are a good example of that situation. Ask the client for an update regards any current outstanding issues that need to be resolved prior to the commencement of any listing and or marketing. Take notes in this process given that the information can have significant impact on future negotiations, or leases, and contracts.
- If the property contains tenants, you will need to review the leases comprehensively. Each lease can have strengths and weaknesses that can apply to the income stream and the property ownership. When looking at a property with a number of leases and tenants, take the time to go through the tenancy mix report, the tenancy schedule, and the lease profiles. You will need original lease documentation to do that, and expect that the process will take many hours if not days.
- Review the services and amenities that apply to the property and the current condition. Add to that the details of property improvements, strengths and weaknesses, zoning, and rates and taxes. It is worthwhile checking that the permitted use of the asset complies with the local zoning and approved development plans.
- Review the income stream for the property both in gross rental, and net rental. Review the outgoings for the property that apply on an annual basis. Check those outgoings against similar properties in the same area today. You need to know that your property is competitive when it comes to gross and net income. The net income will have an impact on the potential price that you may achieve a sale.
- Ask questions about the history of the property and the improvements over time. The landlord, the tenants, and the neighbouring property owners will have some value in this process.
All of these things lead to a solid set of recommendations that can be made towards the property marketing program in today’s economic climate. All of these things will give you relevant ideas to help in the promotional marketing activity.
You can get more tips like this in your Agents Newsletter.
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.
Every marketing campaign today in commercial real estate should be carefully considered to help attract the right level of qualified enquiry for each property listed for sale or lease. With limited enquiry from some property types and in some locations, the enquiry that comes in off any advertising or marketing effort is really special and should be optimised into your database and ongoing contact system.
As a general rule, marketing campaigns in commercial real estate should be vendor funded. All exclusive property listings should feature a vendor funded marketing campaign of reasonable flexibility. In this way you will collect better enquiry from all quality properties that are taken to the market.
The simple fact of the property market today is that you cannot easily build your profile as an ‘expert’ off the back of low profile property marketing; think ‘big’ and promote ‘big’ (that is why you need vendor funds for the campaigns).
The top agents of the property market make sure that the local prospects and business leaders know that they are out there and available to help. Every quality property is to be promoted heavily into the local area; that is the zone or precinct that will produce further listings for you at some stage in the future. Quality marketing campaigns are noted by others and will help you build your relevance as the property expert that you are (or want to be). There is no glory in being the ‘secret agent’ of your city or town. Get your profile out at every opportunity on every quality listing marketing campaign.
Enquiry base and database
Top agents work their enquiry base extensively into the future. Any buyers or tenants that missed out on a listing, or that inspected a listing that was not suitable, should be contacted regularly into the future to ensure that any other similar property that arises can be communicated to them.
Keep the ‘doors open’ when it comes to prospects and business leaders in the local area. Systematic prospecting will help you there.
Here are some rules that can be applied with any property that is taken to the market for sale or lease:
- The campaign should be set for a period of time, and that can be 6 to 8 weeks in most cases. During that time you can reach the target audience and track the results that you get. If enquiry is slow or not reaching the targets that you expect, it pays to adjust the campaign quickly; the process of ‘test and measure’ is really important when it comes to property marketing today. Track your enquiry results.
- Look for the methods of marketing that appear to be working more than others today in your area. That says that all enquiries that come in to your office should be sourced back to the place where the person saw the property advertised or the details of such. When you ask the right questions you will get facts that can help you with other properties.
- Every property should be marketed extensively at a local level. When it comes to businesses and property investors, they tend to buy and rent the property that they understand and that is usually a property that is located in the local area.
- Competing properties will always be a factor to consider in any marketing campaign. Get details of all properties in the same location or of the same property type that could compete with your listing. It may be that your campaign has to be adjusted to suit the pressures applied by these other properties.
- Every person that you talk to and every property inspection that you take across a listed property will help you understand just what people are looking for and when they want it. These factors or requirements can change seasonally so be aware of the property enquiry situation today and how it is adjusting throughout the year. Most ‘commercial real estate marketing years’ are just 10 months in duration; the rest of the year is downtime with holidays and seasonal changes. You have 10 months each year to make your listing and commission quota; all the more reason to focus all of your efforts when the business is ‘on’.
What level of enquiry is coming in at the moment for leasing and for sales situations with your listings? What are those people looking for? How much time does it take to convert the average quality listing to an inspection and a successful transaction? Key questions like this will help you with the tuning of the advertising campaign.
Top agents are usually great marketers of commercial and retail property. They get the message out. You can do that as well; make the effort to be the best in marketing of all property listings. Take the steps to improve all of your market campaigns today. In the long run that will help you improve market share and commissions. Your quality listings will give you real profile as a top agent with a dominant market share.
In commercial real estate, you need a prospecting model if you want to be successful. It is a very simple message and fact, but very complex task to initiate for some (although it does not need to be so). The sooner you develop the process, the quicker you will get results in commissions and listings.
In any commercial real estate team, it is easy to see the difference between the agents that regularly prospect and those that don’t. The difference will be in quality of listing stock, and conversions to closed transactions.
Establish Your Prospecting Process
The prospecting process is unique to you yourself as an individual and property specialist, and your territory with its property types and property investors. To get your system going, it is necessary to establish some rules relative to the local area and the property types. First and foremost, you should understand the following factors:
- Set some boundaries relating to the primary area of focus in your region. You cannot be an agent for everybody and cover every location. The commercial property market is just so specialized that the knowledge required across different areas will be difficult to achieve and maintain. It is better for you to become an area specialist and perhaps even a property specialist within the area.
- With all of the available property types locally, determine the property types that will be of high demand into the future. There is no point in you specialising in something that has little activity or reducing market share.
- Get to know the history of property sales and leasing activity throughout your local region. The historic trends in property sales, rental returns, business demographics, and population growth will influence the future of your commercial real estate market. Ensure that your market has the expansion and churn factors that you require for property change over, sales, and rental. The history of property activity is in fact a timeline. The time line will show you where the opportunity will arise over coming months and years.
Within any local area, you will find groups of prospects that offer real commercial real estate opportunity on a regular basis. Getting closer to those groups will help you with further listings and further inquiry.
Most particularly the top priority groups that will feed you with listings include the following:
- Franchise business groups seeking new property positions as part of their business model will always be on the lookout for good property locations. Every franchise group will have unique requirements of property selection and occupancy. For this very reason, approach them individually and get to know their selection process and terms of acquisition. When it comes to leasing, they will usually have a standard form of lease to support their franchise business model. They will also have particular requirements of demographics relative to the local area, the population, and exposure.
- Solicitors with clients that have property challenges or needs will need your help. Whilst solicitors may know how to transact property, they usually need assistance when it comes to liquidating a property or acquiring a new one. Local market knowledge will help them greatly with this process, and you can be the source of that experience when it comes to the local property market.
- Accountants with clients and property investors that require property solutions are a always out there looking for specialised property assistance and local market knowledge. This is where you can be of high value to them as they work to resolve their client’s property problems.
Every existing property listing is an opportunity to talk to other property owners and business proprietors. In this way you can expand your market intelligence and relevance as a property specialist.