‘Build your real estate business faster with directed marketing of depth and coverage.’ – John Highman
In commercial real estate leasing you want the tenants and landlords to remember you as a leasing specialist, and thereby use you at the times when they have a leasing challenge. On that basis you really should know lots of people locally that own or occupy investment properties. Your database should be the lifeblood of leasing commissions and vacancy opportunities. Your brand and your image should feature in your professional leasing marketing plan.
You want the tenants and the landlords in the local area to remember you as the industry specialist at the right time and in the right way. The best agents and brokers have a reputation for resolving leasing challenges effectively and directly. The understand how to shape the lease and rental transactions for the best outcomes possible for their clients.
Consider the leasing market over the last 12 months. Think about how the rents have changed and the enquiry rates similarly so for the different property types. Somewhere within that change and churn you will have the opportunities for tenant placement and vacancy resolve.
The local leasing market will always be under change and churn, and the commissions can be found when you tap into the changes in the property market. Rents will alter, as will the vacancy factors throughout the year. An active leasing market will have plenty of opportunities for commission growth. Look for the tenants that need help when it comes to occupancy and premises expansion or change. Ask the right questions, and comprehensively talk to all of the tenants through your business zone or precinct.
Know the tenants
So the message here is that you can and should talk to plenty of tenants each and every day. Understand what the tenants are thinking and doing when it comes to lease occupancy and rental intentions. Some of those tenants will need to expand or relocate their business operations. Other tenants will be coming to the end of lease occupancy and will be looking for better value from a rental and occupancy cost perspective.
The agent or the broker with a comprehensive tenant database will be of great value to the landlords that they serve. Market your leasing services accordingly, using your database as part of your lease listing pitch.
Your database rules
A good leasing agent will have several thousand local businesses in their database, and that database will be fresh and up-to-date. All of the tenants and business owners in the list will be contacted in an ongoing and complete way. Their leasing status will be changing in the database over time. Track and measure the changes and the challenges of local tenants.
Here are some other ideas to help you build your brand awareness with the tenants in the landlords in your investment leasing market:
- Comprehensively canvass all of the local businesses within your territory – take an organized approach to buildings, streets, precincts, and property types.
- Connect with all of the landlords within the region – some landlords will have a valuable portfolio of prime properties to lease. Work with the landlords that have or offer the most opportunity for you over time.
- Offer specialized vacancy resolution services – develop some unique and valuable leasing services to help resolve vacancy challenges and local leasing requirements fast and efficiently. Tenant retention plans, tenant advocacy services, and lease negotiation services are all valuable services to offer to the local area and the people therein.
- Provide tenant mix strategies and clustering solutions – office buildings and retail shopping centers have unique challenges when it comes to tenant mix strategy and clustering. The mix of tenants in the building can make or break the growth in market rental over time. The types of tenants can also strengthen or weaken the occupancy within the building over time.
- Understand how to improve the value of a lease – a long-term occupancy can improve property cash flow and values over time. The rental structure can include variations in rent reviews, outgoings recoveries, and option periods. Think about how you can negotiate leases with due regard for your client and their investment circumstances.
So you have five ways here to help improve the leasing services that you offer locally. As a direct result, your personal brand can grow in the local area with tenants and landlords. That is the best way to build your leasing business.
Some real estate agents fail in commercial real estate brokerage and they do so rather quickly due to a lack of focus and the right personal development. That doesn’t have to be the case. If the right personal skills and focus were developed early in their careers, results would come a lot easier to most of those agents.
We should define what ‘results’ are now so that this important topic can be handled and solutions set. Results for most commercial real estate agents are defined in the following terms:
- Quality exclusive listings
- Better market share of controlled listings within their sales territory
- A good database of clients and prospects
- Referral business from existing clients
- Closed deals in sales and leasing
- Growth in commissions
The agents that struggle in the industry usually have weaknesses in most if not all of the categories. Scary isn’t it?
Most of the agents that drop out of the industry will do so inside the first twelve months of their career; or they will move brokerage a few times to extend their ‘stay’ in the industry for a couple of years. If those agents had taken the time to develop the right levels of personal focus on growth of their business, things could have been a lot different. This focus should have started immediately a person enters the industry. The ‘clock is ticking’ as they say.
In the industry it is not so much a matter of an agent doing a lot of things each day to stay ahead of the demands of the job, but rather doing a few things extremely well that will help drive more business and market opportunities.
When you break down the real estate agent or broker role into categories or skills you will see a list that looks like this:
- Researching property owners, business leaders, and property investors to talk to
- Prospecting within those groups for potential new business and listings
- Presenting and pitching for listings and sales and leasing opportunity
- The listing process with a big focus on exclusive listings
- Property inspection skills across specialised market segments
- Marketing skills to reach the target audiences for each listing directly and effectively
- Negotiation skills for the property type and the location
- Closing skills and the accurate documenting of sales and leasing deals
- Building positive and valuable relationships with clients and prospects for the long term
If there are problems in any of these areas they will impact the success and momentum of any agent. That is where training and practice comes in very handy.
If you look at the list again and consider the factors involved you will also see that items 1 to 4 are likely to be far more important than the others. Most agents fail in the industry because they do not focus enough on those four items and systemise their prospecting and pitching relevance for new business; they then struggle with building market share and any relevance as a real estate agent.
It is a fact that most towns or cities have an abundance of properties to list and many agents or brokers to provide those services. The best agents win a larger slice of the new listing business simply because they are so good at items 1 to 4 in the list. Are you up to the challenge?
Advertising and marketing is the only way of getting many people interested in a commercial property in a short period of time. The more that people know about the property, the greater the chances of someone liking it, and wanting to buy. When you can get people to like a property, the higher the asking price can be, and the greater the potential for genuine enquiry.
Although some Commercial Real Estate companies pay for the advertising themselves (and the vendor gets what he or she pays for; little or no advertising and poor results).
Anyone could put their property to auction for a free market valuation, with an impossible reserve price and no intention of selling.
Getting the Marketing Message Right
Selling a commercial property is a business transaction and a joint effort. A vendor who spends money to make money is a genuine seller. The newspapers get the advertising money, in return for which the vendor receives AGENT SERVICE, EXPERTISE, LOYALTY AND BEST EFFORTS.
If a commercial real estate auction company paid for the cost of advertising for each property on their books, (say 200 properties) their classified and display advertising costs would be over $50,000 per month! They would quickly go out of business.
Know Your Marketing Requirements
In choosing an advertising budget, the vendor should carefully consider what the advertising is required to achieve. The more advertising that can be done the better for the client; more people will know of the property and its availability. Give the client some marketing campaign choices as you pitch for the listing and ask for vendor paid marketing funds. When you take the comprehensive approach, it is hard for a client to ignore the marketing story and the need for them to commit to the promotional campaign.
THE CHIEF CONCERN OF A VENDOR SHOULD BE TO FIND A SOLUTION TO THE PROBLEM OF HOW TO GET FULL EXPOSURE IN ORDER TO ACHIEVE THE MAXIMUM PRICE FOR THE PROPERTY.
Individual advertising budgets in Commercial Real Estate are tailored for each property. Agent’s commission, legal fees and advertising costs are often paid for in just one higher bid at auction. (As a guideline, adequate advertising costs should be approximately 1% of the value of the commercial property being offered for sale).