It is a good idea to keep score in commercial real estate, so you understand where you’re heading when it comes to listing conversions, meetings, and transaction. In his podcast today, you can learn how to track your activities, and most importantly the activities that matter. Take the ideas in this podcast and grow your business through deliberate and direct tracking of your KPI indicators.
When you think about it, there are plenty of things that you can watch when it comes to your activities each week and each day in commercial real estate. Those indicators will include outbound calls, meetings, inspections, and negotiations. All of those things lead to commission opportunities over time.
Listen to the podcast to understand how you can improve your activities each day with the things that matter in brokerage.
In commercial real estate brokerage, there will always be plenty of new business to convert locally when it comes to upcoming and current property development approvals. Part of your prospecting model as a broker or agent should incorporate that focus on new developments, incorporating a real strategy and approach to the right people.
When you tap into a new or upcoming local property development, the business that you achieve can be ongoing and the listings can be numerous. A property development can incorporate a number of stages and premises to be marketed. That being said the ‘front end’ work to a property development can be extensive and take time, so be prepared for that ‘down time’. It is the longer term and bigger focus on the development outcome that is important; understand just how many listings and or commissions will come from the final project when it is active. Is the project for you?
As a base strategy to get this concept underway, you will need to regularly visit the local planning office to understand where current and new property developments are being considered and will be located. You can then inspect the property location and approach the property owner and or developer accordingly. Get in early on any upcoming property development.
Local Planning Office
Visit the local planning office at least once per month to review the minutes of the planning committee or planning approvals board. Understand how planning approvals are processed in your town or city, how long they take, and how the approvals documentation can lead you towards future listing opportunity.
Relevance is the key to converting leads and opportunities from and with property developers. A property developer will be inclined to use the services of the top agent who can prove that they dominate the market segment, and achieve the best results in a timely way. Is that you? How can you display that?
Here are some ideas to help. Remember the motivations behind any new property development and consider the following factors:
Time on market will be a factor of concern for any property developer. They will need to know how the time on market can be shortened whilst they are still achieving the best levels of enquiry for the new property development and or premises. Show them how you will do that.
Vacant land in the local area will always be a good source of property development opportunities providing there is a relevant demand in the local area and the zoning for the property is suitable. Merge vacant land ownerships into your prospecting model. Determine how long it takes to create a new property development, what could be involved, and how you can help the process and outcome for your investors and or developer clients.
Redundancy in local investment properties will happen at any time in any city or town. Some properties reach the end of their serviceable use, and you can work with that. Businesses tend to move away from the older properties over time, and you can work with that. Those older properties can become renovation opportunities or redevelopment sites. Tap into the redundancy issues in your location.
Change of use and zoning use will occur locally. Look for the decisions and the changes of property zoning as they apply in your town or city. A change of property zoning will usually create future property churn be it as a sale or leasing opportunity.
Business migration and change are factors that we can always tap into. Look for the segments of the business community that are under pressure and change. Pressure factors can include business growth, expansion, contraction, or relocation. Connect with the local business community to understand where those opportunities will be occurring next and what those businesses will need to do.
Property developers can be matched to local investors. You can be the creator of future of development business and property opportunity. You can find the parcel of land, the appropriate developer, and the business investor to take this project forward. Any new property development and redevelopment change will usually take two or three years to complete. You can be the catalyst of matching the three main elements to create that project opportunity. Work with the local property investors to understand where they are focusing and what they are looking for. Find investors (with the funds backing) that can work with those property developers and then locate the parcel of land to suit.
You can attract property development business in commercial real estate brokerage. Understand what is happening locally and then drill into the market segment. Talk to the right people to open up the enquiry and leads for new property projects.
Every quality listing in commercial real estate brokerage should be the subject of a comprehensive and specific marketing plan. When the elements of the property are matched to the levels of enquiry, the prevailing property market conditions, and the client, the marketing plan is likely to produce the better results from the selected target market.
Most high quality listings today are the subject of a competitive tender involving a number of brokerages and agents. You may only have a short period of time or one brief opportunity where you can present your promotional ideas and marketing strategies to your client.
Your presentation, the listing pitch and the marketing plan will need to be of exceptional quality and relevance to attract the interest of the client and convert the listing. It is very likely that the best agent will win the listing based on recommendations, commitment, and confidence.
The Best Way to Set Out Your Marketing Ideas
Here are the elements of a property marketing plan in commercial real estate brokerage. These ideas will help you prepare your professional marketing plan:
The title page – give the property and identity through the use of a title. That title should be specific to the property and where possible incorporate the history of the property. It is quite likely that the local property owners and business proprietors recognise the property in a particular way. That image or recognition can be incorporated into your marketing plan.
Use professional property photographs – the front of your proposal or marketing plan should feature a professional photograph. That strategy should continue through the document. Most clients will be drawn to the proposal that features the asset in a creative and professional way. Through your marketing submission, you can add a number of professional photographs taken at different times of day, of different parts of the property, and use photographs that enhance the strengths of the asset to the target market.
An executive summary – at the front of the document, make sure that you are using an executive summary to pull in all the features of the asset and the intended marketing campaign. The executive summary should be no more than one page in length and feature a number of dot points as part of the layout. You want the executive summary to attract the interest of the client and refer them further into the document for greater detail.
A table of contents – simplify your marketing proposal with a table of contents so that the client can refer to the correct parts of the document as part of the review.
A preference for simplicity – keep your marketing document simple and informative. Avoid bulky submissions that complicate the marketing process. Help your clients see the promotional strategy to be used with the target market. The best way to do that is through the use of a Gantt chart displaying the different marketing strategies and the timing process to be applied.
Property analysis and recommendations – show the client that you really understand the property and its position in the prevailing market conditions. Summarise the property as you see it today and provide details of comparable property market activity in the location. From that information you can make specific recommendations towards a target market, the enquiries, and the inspections.
The marketing plan – from the target market, you can specifically apply strategy to the marketing plan when it comes to the choice of the right media, the timing, and the expenditure. Help the client see exactly how you will be spending the money and why that is so. Show the client that you are in control of the property marketing process and the feedback to be encouraged.
Implementation and control – make it easy for the client to formulate a decision and move ahead with their marketing challenge. If there are any problems within the property that need resolving prior to promotion, provide specific solutions and ideas to help that occur. Make it easy for the client to see the best way forward with their property challenge based on the attributes of the asset and the local property market.
Taking all of these things into account, you can make your marketing proposal stand out as specific and special with any good quality commercial real estate listing. Make it easy for the client to select your services as the agent of choice in resolving their property challenge.
In commercial real estate agency and brokerage you need personal goals and targets. They show you the ultimate path to better clients and market share.
All of that sounds logical, and yet so many agents give ‘lip service’ to the process and never really get it going. They let the days and weeks pass without much focus. They let the business ‘happen’ rather than ‘directing’ it. Over time this then means less listings and volatile commissions.
Let’s say something very positive here from the outset. The commercial real estate industry is one of the most rewarding industries you can work in. It does however require complete focus and directed action. Those that don’t do that really do struggle. Struggle then creates stress and a downward cycle of business. You don’t need the pressure!
If you want to dominate your territory, town or city as a ‘top agent’, then goals and targets are required. You can then set action plans and implement them every day. That’s how you build market share and attract more listings your way.
Here are some goal creation considerations for agents and brokers:
Look at the growth of property activity in your local area. How has it changed? What are the predictions for the future? Are you able to tap into the growth segments? What knowledge will you need to get into those segments of the market? Positioning and targeting are critical issues in our industry.
Assess your competition when it comes to local sales, leasing, and property management appointments. How and why have they won that business? Are they dominating their market for some reason? Can you replicate their actions? Can you be better? Stand out as the better alternative in real estate agency.
What marketing systems are being used locally with new and top quality listings? Are the other agents marketing listings differently in any way? Can you create a better marketing process in sales or leasing? It is best to be different and direct when it comes to property marketing today. Every property that you take to the market today has to stand out as a quality well marketed listing. Put yourself and your listings into the process. Stand out as a top agent that gets involved. Take your exclusive listings to the market personally.
What are the growth considerations in the local business community and the population demographic? How can you work with that?
Given all of the above, take those facts and shape them into your prospecting and action model. Set the right targets with exclusive listings, commissions, inspections, and clients. You hold the keys for any success in your market. Get active. It’s a personal thing.
As part of your commercial real estate activity, you should research your property market at least quarterly and preferably monthly. On that basis you can project what sale and leasing activity is currently underway and what will occur over the coming foreseeable future. Essentially you are looking for listing opportunity, growth of commission, and new business. You are also looking to reduce any threats from industry downturn or change.
It really doesn’t matter whether you are working as an individual sales agent, or as part of a commercial real estate team. The same rules and processes apply when it comes to researching your market. You need to know what’s going on and you do need to set some specific strategies in place to help you capture the right levels of new business.
Here are some ideas to merge into your commercial real estate market research. After gathering the information, you can apply the findings to your personal business plan.
Determine the geographic zone where you will get most of your new business from. That will be an area where you can focus almost all of your marketing and prospecting. It can also be an area which allows you to survey and research current activity. This then becomes your primary area of focus that should produce 75% of your listing and commission income opportunity. The other 25% of business will come from outside of the zone, or alternatively referral and repeat business.
Given that you know where the business is now going to be coming from, determine the best customer demographics set that will apply to your prospecting model. Normally you will be focusing on local business proprietors, property investors, and industry professionals. On a street by street and property by property basis, it is necessary to research these people and make the direct contact. The direct contact will involve cold calling, door knocking, and direct mail.
Research the history of sales and leasing activity in your local area. The critical zone of activity will be over the last five years. Create a graph from the numbers that you identify. Look for the peaks and troughs when it comes to seasonal sales and leasing activity. Determine if there are any opportunities and changes on the horizon.
Review the supply and demand projections for commercial, industrial, and retail property in your target area over the coming three years. As part of that process you can visit the local planning office and regularly update yourself with changes to the development plan and or new projects coming up. Look for those changes that could impact the market. Seize on the opportunities early before other agents find them.
Do a competitor analysis throughout your region. Some agencies will be better than others when it comes to results and market share.. Some agents will be more effective than others. Look for the differences with the successful people, and then determine how they have achieved their market share and dominance. Successful agents leave clues as to process and system. This can be replicated.
Do an Internet advertising count of all the listings currently available for sale or for lease with your competitors. This should be on an agency and or salesperson basis.
Do a signboards count all the listings currently available for sale or for lease. This should again be on an agency and salesperson basis.
Assess the factors of time on market when it comes to those properties that remain outstanding, unsold, or vacant.
Look at the factors of marketing that apply to current listings in your local area. Look at the differences across all agencies in marketing when it comes to open listings and exclusive listings. Can you do anything more effectively and differently than the other agents?
Given your local property market, and property specialty, you may very well be able to add something to the list. You can now see the importance of understanding what is going on currently in your local area and how it can impact your future promotional activity.
When you work in commercial real estate agency, you should start your day strongly and with focus. Get as much done as you can before other disruptions start to take over (and they will).
It is a fact that things in commercial real estate agency will happen daily that you do not expect. That being said, there are still key things that you need to do every day to improve your market share and client connections. If you overlook these things, you will soon have less commission coming in and you will also be missing on the quality listing stock.
So to start strong every day, you need a plan and a process. Action is everything in our industry and directed action can allow you to form habits. It is the habits that will take you forward as a professional in our industry.
Here are some ideas to help you with effectiveness and focus as a commercial real estate agent.
It is easier to control the start of the day than it is to control the whole day. If you can control 1/3 your day, you can be quite successful and effective as an agent. Plan your activities so that your working day can and will be under your control from 7 am. to 11 am. Don’t let others change or modify your diary before 11 am.
Prospect every morning from 8 am to 10 am. Get your outbound cold calls done then. That one single process will be critical to your market share. It is interesting to note that most top agents do this. Struggling agents overlook the process or avoid it.
Talk to your clients from 10 am to 11 am. After 11 am the pressures of the day can take over so get to your important clients on key issues early. You can do the same thing at the end of the day and in the evening.
Look after your database yourself. Only you have the information that should go into it, and only you are going to benefit from it being correctly used. If you go into your database every day you can shape the information and use it to your advantage. Ongoing contact and trust in our industry is a really big thing.
As you move through the day and the week, track your numbers and ratios relating to calls out, meetings, presentations, listings, inspections, and deals closed. You should also track your exclusive listings as they will do more for your market share than open listings.
So you can see that the key thing here is control. When you are in control you can get more of the right things done. That is how you move up in the industry.
Many property investors are attracted to investing in industrial property because it is easy to understand. The tenant, the lease, and the property are quite straight forward from an investment perspective.
It is also worth noting that many commercial real estate agents ‘cut their teeth’ in the industry by working firstly on industrial property sales and leasing. The basic nature of the property is easy for them to grasp and negotiate on.
Some commercial agents will like the industrial property type so much that they may stay with the segment of the market and become true ‘specialists’ in an area. If that is the case they will usually rise to the higher end of industrial property sales and leasing in both size and value. There are plenty of large companies and industries looking for specialised assets for the business growth of their company.
So here are a few more observations about industrial property today:
Take care when it comes to industrial properties that are created for a specific industrial use and tenant. They will generally have a high liquidity factor and be hard to move when the property is to be sold.
Special purpose or single purpose industrial properties will be difficult to lease (or sell). As a case or example in point, large cold storage industrial properties are so specialised that an investor would (or should) want a high yield and long lease with a ‘blue chip’ tenant before the property was considered a wise purchase.
This property type is usually the first to be impacted when the national economy and business sentiment is under pressure. That being said, industrial property is usually the first to respond when the economy is improving.
The premises and buildings are easy to manage. The leases are basic and straight forward in most circumstances.
The rental structures in industrial premises are usually a type of net rent. The tenant will usually pay most if not all outgoings.
Capital expenditure in an industrial property will be impacted by property use. The property owner should get a depreciation schedule of all capital items so they can plan the larger expenditure of capital items that may arise in the future.
The zoning of the property and premises will have direct impact on use and therefore tenant occupation. Ensure that the zoning offers sufficient flexibility for property occupancy and returns.
Industrial premises are frequently a single tenant and single occupancy issue. The facts are easy to understand and tenant mix is not a problem as it would be by comparison in a retail property.
When you look at overall property performance, consider the growth potential in rental as well as the growth in capital appreciation. The two factors are not always linked and may be impacted by locational factors.