How to Prospect For New Commercial Real Estate Listings
PROSPECTING FOR COMMERCIAL REAL ESTATE LISTINGS
Commercial Retail and Industrial Listings
Any Real Estate Agent or Broker who wishes to have a successful career in commercial and industrial real estate must regularly obtain marketable listings. Listings are the agents “stock on the shelf” and your income now and in the future depends on the quality as well as the quantity of the listings that you obtain. The more listings that you have the more buyers and tenants you will attract. This makes the deals all that more easy for you. More listings mean that you dominate your market and lessen the impact of your competition.
In the commercial and industrial property, listings commonly may include:
- Land that is suitable for commercial, industrial or retail development
- Commercial, industrial and retail buildings that are for lease
- Businesses that occupy premises from which they serve and supply their markets
- Commercial, industrial and retail buildings that are for sale to owner occupiers or investors both large and small
Developing a Client Base
The secret of success in commercial and industrial real estate is to have your own client base. Those clients who work comfortably with you and who respond positively to your advice in relation to their real estate requirements are the clients you need to develop. As it is the clients who pay your fees, and not the tenants or buyers, they are very important people in your business life and it is essential that you represent yourself strongly to them at all times. As these people and organisations readjust their property portfolios to meet their emerging real estate requirements, they will continue to provide you with listings. In addition, if they are satisfied clients they will refer you to other business leaders, friends and family, and so provide you with more business.
Knowing the Real Estate Market
To provide effective advice to prospective clients it is essential that you know the market – commercial, industrial or retail – that you are involved in and that you have detailed knowledge of the geographical area in which you operate. To do this effectively you will need to:
- Canvass your territory constantly according to a plan and become well known to businesses and people in the area
- Know every property that is for sale or lease in your territory
- Maintain a list of property transactions that occur and have occurred in the last 3 years
- Keep an eye out for private transactions by property owners
- Involve the management of your office and other team members with what you are doing
- In addition, you should understand the factors that motivate companies in your area to move to other space, and you should be aware of the forces that encourage investors to buy and sell in your area or precinct.
WHAT MAKES A SUCCESSFUL AGENT OR BROKER?
So what makes a successful agent or broker from the client’s perspective, and someone that the client wants to do business with and through? It is an interesting question to ask from a clients perspective, but history shows that the factors which stand out as being of prime importance to clients are the agent’s knowledge of the market and the quality of the advice given. The negotiating skills of the agent and the ability to act quickly are also important and rank highly. Adherence to client instruction, property marketing skills and confidentiality were seen to be of slightly lesser importance.
It is clear from this analysis that the factors which are going to have a vital influence on the successful listing of a client’s property are knowledge of the market and the quality of advice. Owners are looking for agents and brokers who know the marketplace and have readily available records information about companies and investors that are looking to make immediate decisions on properties they require, own, or occupy. Your clients want an agent who will immediately bring a listed property to the attention of such people.
So, at the point of listing, being able to communicate effectively with the owner about the commercial and industrial market place and the prospects that are available on your database could certainly lead to a successful relationship and hopefully an ongoing one.
PROSPECTING FOR LISTINGS
Where do you find new listings and how do you go about converting them? This list may help. As you get to know your clients and the geographical area of the market in which you operate, opportunities for obtaining listings will present themselves. For example:
- Real Estate Transactions. The successful conclusion of any real estate transaction in your region implies that both buyer and seller may be looking for other options. Avail yourself of these opportunities.
- Liquidation. A failed business is a prime target for agency activity.
- Vacant Buildings. Be conscious of any buildings that become vacant or derelict as these represent business opportunities.
- Intermediaries. Maintain close association with the intermediaries of the real estate business. Intermediaries include such people as financiers, bankers, insurers, builders, architects, engineers, lawyers and accountants. Their clients will at times require the services of real estate agents and a recommendation from these people is invaluable. You, in turn, can introduce your clients to such intermediaries and sound business relationships which benefit both parties are established and maintained in this way.
- Newspaper Articles. Articles that are prepared by you or in which you are quoted, bring your name or your firm’s name to the attention of the public.
- Direct Mailing. The regular mailing of letters that canvass for properties, when sent to a suitable group of possible investors or property owners, frequently result in listings.
- Private Advertisements. These can indicate properties that are on the market and the owners may be encouraged to employ your services if initial advertisements have not been successful.
- Neighbours in immediate area
- Property Managements (Rent Roll)
- Entrepreneurial Activity
- Previous Vendors & Purchasers
When you discover a property that you feel could provide a business or listing opportunity, it is necessary to identify the owner. The following avenues can often provide this information.
- Your own office (In each agency there is substantial information from previous transactions and property ownership which can be consulted).
- Local Government Records
- Land Title Information
- Electoral Rolls
- The Telephone Directory (including the Yellow Pages in the case of businesses)
Further to this there are many other sources of information to be used when identifying owners. These are:
- Property ownership lists
- Historic Lands Sales Records
- Use other agents signboards as a reason to talk to adjacent owners in the locale
- Commercial property is transacted to a cycle of investment and history shows that it is about every 5 years. Look at the old sales records in your area for the next cycle of potential sales.
- Tenants will usually tell you the property owner if you ask
- Directory boards in buildings are a great source of leasing intelligence
- Business Telephone Lists and CEO contact names
- Stock Exchange Information and updates
- Company Searches for large businesses in your area
- Newspaper Stories & Articles
- Be willing to dare and try something new
To undertake this process you must be diligent and thorough in your activities so that you do not leave any ‘stone unturned’. Nothing is more frustrating that another agent’s sale or lease signboard appearing in your territory that you just covered last week.
The above information may seem logical; however it is commonly overlooked or not acted upon in most cases, given that many salespeople do not have the personal and sustained discipline needed for the task. The best commercial real estate agents and brokers use this model as their source of listing opportunity.
In closing we should say that this prospecting process does require a good database program to record and channel your ongoing findings. The value of a good database program is high in list of tools of a professional agent or broker working on commercial real estate. Good hunting!