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 and retail property management, you should have a process and a system to help you attract new property management clients. Over time the income from the management portfolio will support the agency and provide stability when sales and leasing activity is low. Here are some tips from our Newsletter.
There are a number of different ways to attract these clients to your business, with some processes being more successful than others. Here are some ideas to help:
- The best way to attract new business of this nature will be through and at the time of the completion of a successful sale or lease transaction. The property owners are primed for the discussion. It will be a matter of showing them why a professional management service will be of value to them. Perhaps you could save them time, money, or remove the frustration from the tasks involved.
- Some clients manage their own properties, and on that basis they will be targets for new business. That being said, they will typically not have the necessary systems to do the job properly. The larger the property, the more difficult it will be when it comes to tracking income, managing expenditure, and invoicing tenants. You can add to those requirements the other issues of lease management, risk controls, and tenant mix optimisation. All of these things require skill and knowledge. You can market your brokerage around the specialized services in each case.
- Review the properties currently being managed by your competitors. It should be fairly easy to understand and identify those properties that are being poorly managed. In most cases you will see evidence of that underperformance when you inspect the property and talk to the tenants. The skills of the manager will reflect in the quality of the management. Get in contact with the owners of those distressed or difficult properties, and offer a no obligation proposal to take over the property.
- Understand the leases that apply to the tenants within a property. You may find that the management fees are a recoverable item within the outgoings categories of the leases. This then says that the fees that you charge to manage will not be a financial burden to the property owner. They will simply be a recoverable item in the outgoing structure and invoicing process. Providing the property has a suitable level of outgoings when compared to other local properties, your fee recovery should be quite simple and achievable.
- The larger the property, the more complex the management process. That being said, you can provide specialised services when it comes to the tenancy mix, vacancy management, and outgoings control. All of these factors will give you leverage when it comes to winning the property management appointment.
So the message is quite clear. There will be some new business to win when it comes to managing quality properties and quality clients. The best strategy to achieve that is to identify the right time in the property cycle, and the right services to offer your clients.
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In commercial real estate brokerage you need a good database. When I say ‘good’ I am not referring to the complexity or brand of database. What I am referring to is that of the accuracy and volume of data that you have collected.
There is no point running a database unless you keep the information up to date and accurate. So many brokers struggle with that requirement. You may have heard the saying, ‘rubbish in and rubbish out’? That rule certainly applies in this case. Keep your contact information up to date and accurate.
If you want to dominate your market, then you will need to contact plenty of new people each day. If you prospect for 3 hours per working day (the recommended average), then half of that time should be devoted to new contacts, and the other half of the time should be devoted to current contacts. Over time the pipeline of contact that you establish will help you with sales and leasing opportunities.
Over time your prospects and clients will be contacted many times; that is how you build market share and opportunities. On that basis your customer contact system has to be flexible and accurate. It also requires the personal involvement and accuracy of the agent or broker.
Here are some rules to help you with your prospecting and client contact systems:
- Split your prospecting time 50/50 between current contacts and new people. That is how you will build new business.
- Focus on the process of ongoing contact. That will mean telephone calls and emails to the people that you know in an ongoing way. Record the results of your last points of contact so you can refer to earlier client situations and discussions.
- Get email addresses and the consent of the people that you are talking to about ongoing contact through email. You can then set up an ‘auto responder’ for that process. Not only is it economical, but also very convenient. It will save you a lot of time.
- Build ‘trust’ over time with your clients and prospects by providing valuable local market information. You can do that with listing sheets and sale or leasing updates.
- The ideal contact frequency to use with all of your clients and prospects will be your choice, however it has been proven that you will need to make valuable personal contact (telephone or meeting) at least once every 90 days.
So there are some key things to do here. Establish your prospecting system efficiently so you can get results in your market and with the property owners or business proprietors that really do need your service.
In commercial real estate agency and brokerage, cold calling is an essential part of the business building process. Every agent and every broker should undertake a number of cold calls every day to build their market share with new people and new prospects.
In any property market and at any time, there will be new people to approach regards the professional services that you can provide in sales, leasing, or property management. At least 25 new calls should be made every day to new people that you have not spoken to before. It will take you 2 hours to make those calls. From doing that, you will nearly always reach approximately 10 or 12 people in one sitting and from that you can get one or two new meetings. That is how you get the new relationships started.
So you need to establish your cold calling process to take your business forward as an agent or broker. You should also practice your dialogue. Here are some ideas to help you with that:
- It is hard to get traction in the cold calling process without practice. This means that you will need to refine your dialogue and improve it over time. This can be done each morning as part of your preparation for the working day. You can practice call conversations as you drive to work. Without any other person in the motor vehicle, you have the opportunity to refine your scripts and your conversational ability for the cold calls that need to be done.
- Each evening you can prepare a list of 25 people to call and approach the next day. Given that we work with mainly property investors and business owners, it is really quite easy to establish a list of contacts to call. The business telephone book will give you plenty of telephone numbers. In addition to that, you can research one or two property owners each day to add to the list.
- Split your prospecting territory up into zones. That will allow you to focus your call processes to particular streets and business types. As a general rule, you should be travelling through the streets of your territory each day to identify any opportunities that you can see.
- It is best to get the calls done first thing at the start of the day. In that way nothing can interfere with your progress and prospecting system. Avoid making or attending meetings at the start of the day so that you can get your prospecting done efficiently and effectively.
- Track your call progress in a database that you personally maintain. Where possible, use a computer for this process, and have a telephone and the computer in front of you as part of making the cold calls. You can then enter the results of calls into the database immediately.
- Purchase a headset to use as part of the call prospecting system. The immediate advantage here is that you will have your hands free to record the results of the conversation. One other clear advantage is that you can stand up as part of the calling process. It is well known that call conversations made from a standing position are far more effective and connecting than those from a sitting position at a desk.
- Understand the rules that apply to the do not call register in your area. Ensure that you are adhering to those rules in making the calls.
- Track and measure your call activity and meeting conversions. The primary object of making a call should be to create a meeting with people that have a future or current need in commercial property.
- Collect e-mail addresses and mobile telephone numbers as part of the prospecting activity. Get the permission of the person that you are speaking to for ongoing contact so you can send relevant property information and advise them of market activity.
The prospecting process does not need to be hard. The telephone can be a distinct advantage when it comes to building better market share and growing your database. That being said, it does require a diligent focus and ongoing activity. That is a personal skill and a personal process.
In commercial real estate agency, the property investors that you know well and connect with regularly will provide you with lots of opportunists in sales and leasing activity. That being said you really do need to know their focus and priorities when it comes to property ownership and overall performance.
The property market changes frequently and so will the plans of the people and clients that you serve. A lease transaction today can be a sales transaction tomorrow. The same extended business opportunity can occur from a lease deal to a property management appointment. Understanding the client will help you find the right opportunities and leads.
Here are some questions to ask your clients and prospects. Adjust the questions and concepts to suit the property type and local market that you control.
- What type of property do they prefer to own and in what location? They may relate more to industrial, office or retail property. Their preference will have an impact on your prospecting activity.
- What do they own now and how long do they intend to hold that investment property? There are strategic differences between holding a property for the short term (5 years) versus longer. Any leases that are negotiated in a property will be established with due regard for the investment holding period, the cash flow required from the investment, and any renovation or relocation needs.
- The income that you set for a property will be relative to the market rental in the property type. What do they know about gross and net rent today? What impact will incentives and vacancy factors have in the leasing process and returns over coming months and years?
- Will the property need renovation soon? Some older properties will reach the end of their useful life as tenants look for better property improvements and locations. A repositioning or renovation process will need to occur with older properties. Many property investors do not know how to position current lease negotiations for that. Renovation and relocation clauses can be inserted into current lease negotiations with due regard for the upcoming property changes. In such cases, the strategy of leasing really becomes very important.
- How are outgoings and expenses running for the property? Are they comparable to the other properties locally of similar type? Keep your clients property suitably positioned in a competitive way so that any lease can be attractive and viable for new tenants considering occupation.
Simple concepts like these will help you serve your clients professionally when it comes to tenant mix and leasing. When you get the balance right, the income for the property can grow and the vacancy rates can fall.
In commercial property management it is easy for a manager to get tied up in the daily events of the property and the client. Quite soon they are just doing a job rather than providing a professional service. The pressures of the job soon take over and the ‘bigger’ picture of property performance gets lost in the events of the property.
Quality property performance and control involves a forward looking approach to the asset given the market conditions, tenant mix, and property improvements. Strategy and timing are everything in the services to be provided. The property manager must have the discipline and the skills to do the job well; that involves a good fee and the right person for the job.
So many local property brokerages and agencies claim to be the ‘best’ at what they do in managing a client’s commercial or retail property. If that is the case then they should be able to prove that they are indeed the ‘real deal’ when it comes to quality property management services. Quality and accuracy are key components of the services to be provided. There are real differences between the services provided in office, retail, and industrial properties. The property manager should understand each and be proficient in one or more based on experience.
Why do I say this? It is a fact that many commercial and retail property managers are overwhelmed with daily work due to the demands of the client, the size of their portfolio, and an imbalance in fees for service. Many agencies set lower management fees just to get the appointment to the property. Those fees then have little relationship to the requirements of the client and the increasing demands of the property and tenant mix.
So the ‘golden rule’ in pitching for a property management is to understand the package of services that will best suit the client and the property. If you apply your fee assessment on an ‘industry standard fee’ as a percentage of passing income, then track that back to the work required and the size of the property and tenant mix.
Here are some other facts to add to the assessment:
- Client focus in the future of the property
- Property performance challenges from the leases and the tenants
- Vacancy profiles and upcoming leasing challenges
- Long term plans for the property including renovation and refurbishments
- Tenant mix changes and lease critical dates
- Cash flow requirements from the rental and the outgoings
- Property improvements and maintenance
- Targets in rent, operational challenges, leases, maintenance, and reporting
- Business plans and tenant retention
- Tenant lease negotiations
There are some real facts and issues to be managed here. A good property manager chosen for the property type will understand how to do that. Balance your client’s fee for service against the time required in management and the challenges of the property.
You can get more tips like this in our weekly newsletter right here.
In commercial real estate it is easy to spend too much time with current clients or prospects, and little time in finding new ones. When this happens your leads and listings tend to slow and will eventually stall. For this reason you must have some systems on the go that will help you find more new clients.
There are always new people to connect with in our industry. The ways to tap into them are simple and yet systemised. Here are some tips to help you with that ‘client growth’ requirement:
- Look for pressure points within the market. Some property owners will be experiencing tenant changes, higher vacancies, renovation pressures, and financial changes. The list goes on and will change during the year. Look for the clients that need help in adjusting to prevailing market conditions.
- Track the other real estate agent boards for both sales and leasing. When they put a new board up on a property, you should contact the owners around it and in the same general area. There is likely to be another property owner nearby that would like to compete with the existing listing. You can help them with that ‘competition’.
- Do a street by street canvass through your territory. Meet the business owners and track down the property owners. This does take an organised process but the rewards are many when you stay fixed to a system of contact.
- List quality properties as a general rule. The quality properties will give you better rates of enquiry from buyers and tenants. When you control the listings you control the enquiry.
- Offer special marketing solutions that are unique and relevant. These marketing solutions will help you when it comes to presenting and pitching your services.
- Build a database of relevance. It is very hard for a client to ignore your database if it is strong and large. Use your database as leverage in your presentation to the client. Show the client the size of the database and give them an indicative ‘short list’ of potential people you would like to quote their property to when the listing is signed.
- Referral business will be available when you connect with the clients and contacts that you have served well in sales and leasing.
- Ask for property management business from those clients, buyers, and landlords that are involved with sales and leasing activity. A great sales or leasing outcome is a reason to quote your property management services.
There are always new ways to get clients. Some will work for you and others will not. Decide what you can do in that regard and adopt a daily process to build your database of clients.
If someone tells you that ‘cold calling is dead’ in commercial real estate they are misleading you. They are ignoring the real evidence of the market. Making regular prospecting cold calls is a key part of the business for any commercial real estate agent. Do not let anyone tell you otherwise.
So why do other people come up with this great prediction and revelation on the ‘dead nature’ of cold call prospecting? They are selling a product and they are simply playing to the rejection factors and call reluctance problems that many salespeople struggle with.
Don’t make the mistake of ‘taking the easy way out’ when it comes to prospecting. It is a fact that calling new and fresh people in your property market each day will help you build your listing market share faster than anything else. There are lots of people to call so the process has to occur if you want to succeed as an agent.
Top agents know that they have to make the calls and that is a fact of the market. Here are some proven call strategies to help you get your prospecting systems underway:
- Most agents will not be making lots of cold calls every day and each week, so on that basis you can have a distinct prospecting advantage when you get the process under control.
- The best times to make the calls are in the morning first up and later in the afternoon. You will connect with more business owners and tenants at those times.
- Approach the process on the basis of seeing if the person you call has a need or an interest in local commercial and retail property. If you research your market beforehand you can work your calls from a base of local business owners and operators. That will quickly lead to other local property information and leads.
- Use a database that is flexible and convenient. If you are going to make lots of calls you really must track your results. From the outbound calls understand your contact ratios and conversions to meetings. From 30 calls and 15 connections made you should get 2 meetings of consequence. That can be a daily process. How long does it take you to make the calls? About 2 hours. On that basis you must be prepared beforehand.
- The cycle of commercial real estate activity for many clients and business owners can be quite long (months and years). On that basis you should keep in ongoing call contact every 90 days.
The next time you hear someone say that ‘cold calling is dead’, laugh at them and make more calls. Your market share will be far bigger than theirs in commercial real estate as you make the calls and keep the process going.
In commercial real estate agency, you really do need to understand what is going on in the marketplace and then make some solid choices at a personal level to improve your prospecting and deal activity. Everything comes down to a personal level and process in our industry. Success has little to do with the agency that you work for.
Outsiders and new agents to the industry are tempted to think that commissions and listings come easily. Nothing could be further from the truth. The quality and the growth of your business will come from personal focus and momentum. The choices that you make on a daily basis, and the actions that you take in prospecting and marketing will drive your business forward. The agents that struggle in the industry are those that have little or no system when it comes to business generation and market share.
Here are some strategies to help you initiate a business plan as a commercial real estate agent. Consistency in focus and the actions that you take every day are the keys to getting momentum and traction with your market share. Here are the ideas to help you:
- Understand the condition of the market today in deal activity, competing agents, and future growth. Look for the opportunities in sales leasing and property management activity. Understand where you fit when it comes to those three distinct disciplines.
- Choose the property type that you understand and can relate to. That may be in office, industrial, or retail property. The clients that we work for require specific expertise when it comes to resolving a problem with a quality property. The marketing and inspection process with any listing is not an experiment. It requires specific knowledge and expertise to tap into the right target market.
- Determine the cycles of the local property market when it comes to leasing and sales turnover. You can do that by reviewing the history transactions through the region. In most markets, a commercial or retail investment property will change hands or be upgraded at least once every seven years. It takes that long for the appropriate capital gain to occur or the client to reach the next stage of portfolio change and growth. Be sensitive to the cycles, and start prospecting the right people inside their property cycles.
- Start prospecting on a daily basis ensuring that you’re talking to new people as well as current contacts. The whole process should take you about 2 or 3 hours per day every working day. In a very short period of time you will find some new business opportunity. When that occurs, keep the prospecting process underway. That’s how top agents grow market share.
- When a competing agent puts a signboard on a property, it is an opportunity for you to talk to the property owners and business proprietors in the immediate and adjacent vicinity. This then says that the marketing processes of a competing agent give you leverage when it comes to building your market share. It is a fact that nearby property owners and business proprietors like to compete rather than cooperate with a nearby property sale or lease transaction.
- When you list a property, personally market the details of the property to the local region of property investors and business owners. This involves door knocking and telephone calls. From this process you will identify other opportunities to work on in the future. Pay particular attention to the immediate property location and the streets around the subject listing. Walk the streets and knock on the door’s to introduce yourself and the upcoming listing. Ask questions and talk to more people; it is amazing how much information you will extract from the market when you do this.
Building your market share in commercial real estate agency is a simple and yet ongoing process. You should have three or four solid strategies underway such as those above to help you connect with the right people and build the right relationships.
When it comes to strengthening your commission and listing opportunity in commercial real estate agency, you really do need to establish systems and processes that can support client contact and transaction accuracy. Attention to detail will be part of that process. Your knowledge of property type, documentation, fiduciary obligations, and client services are all critical to building your business professionally as a top agent.
It is interesting to note that many agents have been and will be sued due to negligence, documentary omissions, and poor professional services. There is really no place in the industry for poor quality agents with below standard business practices and knowledge. Over time their shortcomings in skills and knowledge will unravel their market share and can have an impact on future business for the agency.
So let’s say that you do have some shortcomings at the moment when it comes to documentation and professional services. If that is the case, you do need to consider how your knowledge can be improved and skills developed. In this industry, we never stop learning. Over time you come across so many new and unique issues that require personal development. Every property type can be regarded as unique when it comes to skill requirements. Build your knowledge wherever you can through relationships and education.
Here are some rules to help you with strengthening your property transactions and opportunities:
- Keep a paper trail that is accurate and up to date with every property transaction. It is surprising how frequently people will misunderstand or forget what has occurred relative to a verbal conversation. You do need to back up your actions and transactions with a solid and accurate paper trail.
- Any verbal instructions or agreements should be documented in writing. Whether that be in a legal document, an e-mail, or a letter you will need to make the right choice for the circumstances required.
- The marketing of a property should be fully approved in accordance with the clients instructions prior to commencement. Get all of the draft advertising material approved by the client prior to lodgement and activation.
- Before you act on any property listing on behalf of the client, ensure that you have a legally binding and correct listing appointment document. Some agents will ‘bend the rules’ and get the listing appointment signed later on; they then find that the client will avoid paying commission at a later stage. There are also some big questions that arise here when it comes to risk and liability when inspecting a property that you have no valid listing appointment over. Without a valid listing appointment, you cannot quote a listing.
- Understand the clients instructions from the outset. Follow their guidelines and their targets when it comes to pricing, rental, marketing, and inspections. Keep the client fully up to date when it comes to the latest property activity and the status of any negotiation.
- Ultimately you will be moving a listing to a contract or lease situation. Some properties are quite complex and the associated documentation will be similarly so. That being said, you do need to understand the complexities of the document required; when in doubt involve the appropriate legal specialists to help with the documentation. Every document created as part of a sale or leasing transaction should be valid and enforceable. In that way you protect your commission and client relationships.
You can likely add to this list based on your property type and location. The clear message here is that professionalism is a key component of your commercial real estate business. Strengthen your skills and improve your processes.