In commercial real estate agency, you really do need to understand the property market and the segments that you work with. In this way you can track the trends and opportunities for more commissions and listings.
Top agents tend to systemise there approach to the market, the properties, the clients, and the listings. Here are some tips to help you with that:
- Choose a part of the market that you are interested in and around which you can show knowledge and expertise. Top agents tend to be experts in a particular segment of the market. In this way they can comprehensively quote prices, rentals, marketing strategies, and time on market. Knowledge will always help you convert listings from presentations.
- When you have defined your property type, you can determine the region geographically that you will work within. There is no point spreading yourself too thin across many suburbs or townships. Market share only comes from the market dominance of intense marketing and signboard presence.
- Research the key properties and the key property investors within your defined region. Ensure that there is sufficient stock available for you to focus on throughout the year.
- Look at the history of property transactions inside your defined region or focus territory. That history over the last three or four years will have relevance to the future opportunities and sales that are available. Typically a commercial or retail property will transact in one form or another every 5 to 7 years. If you focus on properties that were purchased, sold, or leased about four years ago, they are likely to be the next properties that come on the market in your region.
- Understand the current trends that apply to pricing and rentals. Add to that the factors of time on market that currently apply to existing listings. Inspect any comparable properties in the area within your property speciality. All of this information will help you with client connections and presentations.
- Within your region there will be groups of property investors and business owners that are frequent and high value prospects when it comes to commercial and retail property. Put together a hit list of contacts that you will focus on for regular prospecting and meetings.
The commercial and retail property market is largely based on quality and long term personal relationships. Top agents and salespeople build relationships with the right people, understanding that listings and transactions will be possible at some stage in the future. These top agents maintain the contact with the right people, and provide valuable market information as they proceed through their pipeline of opportunity. How big is your pipeline?
Get to know your market intimately, so that you can build the right knowledge in preparation for meetings with clients and prospects. Selling and leasing commercial and retail real estate is not an experiment; it is a deliberate and focused process using the best information and market intelligence available.
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In commercial real estate agency sales and leasing you will always have competing agents crossing into your territory and trying to take your clients and listings. The only way that you can handle the problem is to be better than the competition in the ways that really matter to your customers and market. Here are some ideas for that:
- Prospect for new clients each and every day. Over time you will need to fill the gaps in your database because some clients will move on for many different reasons.
- Your current clients and contacts should be nurtured as part of a system of contact with relevant information. Market information can always be shared with your prospects to help them understand just what is going on with local property.
- Use the telephone each day as part of a contact and prospecting process. You should generate at least 2 meetings per day from your call contact process.
- Split your clients and prospects into categories of relevance and interaction. Some of your clients will be of higher long term value than others. Your benchmarks for client categorisation should be set on property type, level of property requirement, and repeat business.
When you look at the actions and results of top agents, it is the quality of the listings that takes them above everyone else. Invariably top agents will have better properties listed on an exclusive basis.
It is the good properties that produce the solid and real enquiry from the market. When you think the commercial property market is tough and slow, you simply do not have enough of the top quality listings. If that is the case, take a serious look at your prospecting efforts and lift them to a new level.
It takes about 3 months to change your listing focus and that can only be done through new levels of prospecting. Top agents will have weekly targets that help keep them on track. They will know the numbers that they must maintain to get the local listings and the right levels of enquiry. Here are some typical benchmarks that a top agent will work to:
- Numbers of outbound calls on a daily basis to new people they have not spoken to before.
- Constant contact with existing people in their database on a weekly basis.
- Conversions of calls to meetings.
- Conversions of meetings to listings or opportunities
- Conversions of listings to exclusive control
- Selling or leasing of exclusive listings
- Time on market for different property types and price ranges.
The commercial real estate industry is not really hard or different than any other sales related industry; it just takes real focus and directed effort. When you do this the benefits soon occur and strengthen your market share.
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In this property market there are certainly some challenges for commercial property investors and business owners. Occupancy costs are rising or remain substantial, and locating tenants can always be a challenge if there is a high vacancy factor in the local area. Supply and demand will always be a concern for commercial or retail property owners and investors.
In essence, the local business community is the backbone of the income generated from commercial property; when the economic environment becomes frustrating or slows down, the business community can take a conservative viewpoint. That will then have flow through to the occupancy trends and rental payments in commercial property.
The local property market will recover from these challenges, however the issues exist now and there are some real opportunities for specialist commercial real estate agents in this type of property market if they respond to those challenges. A keen eye for opportunity is required. A diligent process is required to take the right action.
So exactly what are the challenges and how can we turn them into those opportunities that we need? Here is a list of issues that we commonly see around the commercial property marketplace:
- Too many businesses not fully utilizing their available occupancy space. They are then looking for sub tenants or situations of lease assignment. That will allow them to ease the burden of any rental payments. The abundance of space that’s available in any sub leasing situation will create a lower secondary market of rental. That lower rental can destabilize the market rental in quality properties.
- Property owners are struggling with vacant space. Too much vacancy space can mean tenant volatility and downward pressures on market rental.
- The levels of market rental vary substantially between properties in the same category because of the higher levels of vacancy in the local property market.
- The incentives that apply to new leases create a wide gap between effective rents and or face rents. Many landlords are offering incentives to entice tenants to their property.
- The supply of new space to lease from new property developments is undermining the leasing situation in other established properties.
A top commercial real estate agent can see opportunities in these situations. Behind all of these challenges and issues, are the facts of property occupancy that relate to successful businesses and tenants in the local area. There are successful businesses out there; get to know their property requirements and build a strong relationship for the times that they will need to change property location or property type.
A successful top agent in this market will focus on the relationships that they have with the business community and successful property owners. Getting to know the local businesses and all of the decision makers behind them will help with any future lease opportunities and lease placements. This is where your database as an agent becomes so important to the future listings and commissions that you generate.
So the message here is that the existing property market has opportunities for those real estate agents that look creatively into the issues and challenges. Get to know the local business proprietors and their requirements when it comes to property occupancy, property purchase or sale, and any relocation requirements.
The commercial property market doesn’t disappear, it just changes. As real estate agents, we can adjust to those challenges and adopt our services to improve situations for business leaders and property owners.
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