Tuesday, July 31, 2012

Commercial Realtors - Client Communication Tips

man talking on mobile phone
Connect with your commercial property clients

In commercial real estate today, we have all types of technology at our disposal to help us connect with clients and prospects.  Given all of that you will frequently find that some agents and salespeople take far too long to get back to any person that has made an inquiry.

Time Frames?

So what is the acceptable time frame for getting back to a person that has left you a message?  The general rule is a same day response.  In a very worst case scenario it could be the morning after.
How many times do you here the prospect or clients say that ‘The agent didn’t get back to me’?  Unfortunately the issue is all too common.

The client is the lifeblood of the commercial real estate business.  They have the listings and require our help.

Strategies for Client Communication

So here are some other communication strategies that we can use to great advantage in commercial real estate agency today.

  1. Have a mobile number prominently displayed on all your listing signboards.  As part of that process, frequently check your signboards for vandalism and interference.
  2. Use email both in the office and when you are out of the office.  It is a great tool for immediate communication.
  3. SMS text messaging is a good tool to use when you have inspected a property or had a meeting that the client should know about.
  4. Put a client portal on your website so good clients and those with exclusive listings can log in to the site and see the latest activity on their property.
  5. Use an auto responder email system to send out newsletters to clients on a regular basis.  The automatic part of the process can save you a lot of time and effort.
  6. Send all paper work to the client in pdf form so they do not have difficulty in opening the document from an email.
  7. Any important paperwork or verbal instructions to and from the client should be evidenced in writing or on an email.  Many times you will find this strategy getting you out of any difficulty or disagreement.  The same rule applies to buyers and tenants that may be negotiating with you on any property.

Treat the communication with the client or prospect in the same way that we would want to be treated ourselves.  Professionalism can be seen and heard across the telephone.  If the client knows that you have returned their call promptly and efficiently, they will feel that we are the better agents to work with.  Selling or leasing commercial real estate is not an experiment.

Want more tips in commercial real estate agency?  You can get them here.

Sunday, July 29, 2012

How to Negotiate Commercial Real Estate Commissions

two business men talking in street
Prepare for commission negotiations and choose the right time.

Many commercial real estate clients will try to get a commission reduction from you as the agent or realtor as part of the listing and marketing process.  In many cases you may feel that the commission reduction is the only way the client will give you the listing; your grounds for thinking this will simply and only be because the client asked for the discount.

Here are some tips from our bulletin for you.

Stop Everything!  

Stop!  If this is what you think, then stop everything before you agree to any reduction!  Consider the facts of the matter.  Do you really need to devote your precious time on a difficult listing in a tough market, and then only get paid a fraction of the normal fee?

If you are a top agent and the client knows that you are, then discounts and fee alterations will be out of the question.  Concentrate on the value that you take to the client and help them understand what that value really is in terms of results and time to them.

The fact of the matter is that a commission reduction will do nothing to help the client sell or lease their property.  On that basis you should remind the client of the priorities in their listing decision.

  • Do they want a good result, or do they want a cheap fee and potentially a less committed agent?  
  • Do they want something that could stay on the property for some time and potentially get very stale?

Here is a statement for you that will trouble many a client and help put their focus in the right perspective.

‘Mr Client, I understand your request for a fee (commission) adjustment.  That being the case I am certainly able to assist as you ask; in doing so I will need to adjust our listing and marketing approach from ‘exclusive’ to ‘open’ listing.  The time commitment in marketing a property is significantly different between the two listing methods.  Would you like to take the ‘high road’ or the ‘discount road’ in the marketing solutions for your property?’

Top Agent in Command

Show the client that you are really a top agent with a real command of the market.  When you do this correctly, they really have no choice; you are their best solution and the fee is then a secondary decision.

Comprehensively tell the client of the alternatives that you offer in:

  1. Market coverage
  2. Personal action
  3. Inspection strategies
  4. Listing timing
  5. Competition properties
  6. Competition agents
  7. Time on market

To be the best agent for the property you really do need to show it in all respects.  If the client still asks you for a commission or fee reduction you are probably not selling your skills and relevance enough.

Here are some tips from our bulletin for Agents this week.

Commercial Property Leasing Negotiation Tips

foyer of a commercial office building
Prepare for every lease negotiation the right way.

When you take a tenant through a vacant commercial property, they will ‘try you on’ when it comes to asking rent and lease terms and conditions.  When this happens you must remember just who your client is in the process and the target lease terms and conditions that the client requires.  To do otherwise will waste a lot of negotiation time.

Here are some tips from our Bulletin this week.

What's Easy is Not the Best

It is sometimes easy to take the ‘middle road’ when it comes to matters of lease offer and acceptance.  The reality of the matter is that the final lease offer should be relevant to the property and the prevailing market conditions.  Ask yourself, ‘Is it a fair offer in the existing property market?’

Top Agents 

Top agents are expert lease negotiators and are very prepared to drive a strong market relevant lease deal.  The rents and lease terms will be on par with the local area and the condition of the property.  A fair market rent is one that takes into account all the prevailing market conditions and property factors.

So here are some tips that can apply to negotiating a lease today in any property type.

  1. You should know that you are really dealing with the decision maker for the potential lease.  In the case of a company it may be necessary to get a business plan or company performance report from them as part of the qualification process.  It could also be necessary to get a company search done to ascertain where they are based and what the legal company structure is in your country.
  2. The offer that they make should be in writing and reflect the fullest terms and conditions possible that are on par with the trends of the local property market.
  3. Check the history of the tenant to make sure they are who they say they are and they have given you a real legal entity as a potential tenant.  Evidence from their solicitor or accountant may be necessary.
  4. The prevailing market in the local area will have levels of acceptable rental and lease profiles that would be applicable to the property type.  Target the best package that you can for the client that you act for.
  5. Factors of supply and demand will have impact on vacancies and levels of enquiry from tenants. Your clients should be fully briefed on those facts before you put a lease offer in front of them.
  6. Always negotiate face to face with all parties to a lease offer.  It is far too easy in a telephone conversation to decline or deny a fair and reasonable lease offer.

A successful lease negotiation is a reflection of a controlled and planned strategy from the very start to the very end.  Stay with the negotiation to the very end and be prepared to work any discussion or debate from a base of local market knowledge and fair market conditions.

If you want some more tips on leasing commercial or retail property you can get them here.

Time Management Tips for Commercial Property Managers

property manager with cables and wires
Property Manager under Stress??

If you work in commercial real estate as a property manager, the time management issues that you strike every day will be challenging.  If you cannot control them then the result will be stress and frustration.  That will lead to an unhappy time in your career and underperforming properties.

Here are some tips from our Bulletin for Property Managers this week.

It is interesting to note that the property management division in a commercial or retail agency is usually regarded as the ‘too hard’ part of the business; many agent principals overlook the essential ways to run the division and make it grow.  If they had negotiated the right fees in the first place with each management, then the situation might be a fair bit different.

Do Agency Bosses Understand?

Many office principals do not understand the complexities and opportunities that lie in the property management area.  They prefer the bigger commission hits that come from sales and leasing; whilst that is understandable, it is wrong.  It can be a long time between sales, and property management can solve that cash flow issue.

It is an established fact that a good property management division will support an agencies listings and commissions over the long term.  They take the ‘bumps’ out of the market and the dips in commissions.  They will also supply the agency with quality controlled sales and leasing stock.

When you list a property into your management section, you really do need to think ahead and handle all the fees that can come out of the appointment.

What Fees?

Those fees will include:

Leasing to sitting tenants
Leasing to new tenants
Sale of the property at the right time
Management of the financial versus the physical parts of the property
Rent collection
Arrears collection and recovery
Grow strategies for the tenant mix
Maintenance management fees
Property inspection fees
Attendance at court for disputes
Lease renegotiations with sitting tenants
Assignment negotiations (a tenant fee)
Subletting documentation (a tenant fee)
Budgeting the property annually

Have you got all of these bases covered when it comes to a new property management appointment and the fees that you require?

Some agents charge management fees that are far too low; they confuse the work load and work type of residential property against commercial or retail property.  They also try and ‘buy’ the listing on the premise of low management fees but future sale commission opportunity.  If that is the case you should share your sale commission or fee across into your property management division.

Advanced Property Management

The management practices involved in commercial and or retail property are far more advanced and complex.  You need good property managers that are well trained in the differences in that.  When you have a fair fee structure in the property management division you can build and support a group of expert property managers; over time they will attract more commercial and retail business to you.

So let’s go back to the issues of time management.  A portfolio of properties with correctly set fees will be a challenge.  Make sure that you set your management fees based on workload for each property and landlord.  Forget the percentage of rental approach when setting your fees; some landlords are intense when it comes to the reporting requirements in commercial real estate today.

On a final note, many property managers know far more about property performance than sales or leasing executives; interesting isn’t it?  Devote the right fees to these specialist people in your team and the time management pressures will diminish.

If you want some more tips for commercial or retail property managers you can get them here.

Monday, July 23, 2012

Commercial Realtors - Are You on the 'Horse' or Has It 'Bolted'?

business man talking on the phone in a frustrated way
Get back into your market and drive inquiry forward.

When you work as a commercial real estate agent or sales person, you can feel that the market is getting away from you (the horse has ‘bolted’).  That particularly happens when you have had a break away from the office on annual leave, or you have taken a longer holiday.


Reality soon kicks in and you understand that you have little or no leads coming your way and the deals are going to your competitors in the market place.  Here are some tips from our Bulletin this week.

It takes time to get back into your routine (if you have one), and on that basis every salesperson should have a system or routine that holds them to doing the right things that matter in their market.  I liken it to getting on or off the ‘horse’.

Build Your Commercial Property Routine

Every day you must get back into your routine.  Top agents live by their routine and they are continually refining it as they proceed.  On most days the top agents will do only the things that matter to them.  That will normally be:

  • Prospecting and cold calling for new business
  • Serving their existing clients and property listings
  • Promoting their listings personally to local businesses and property owners
  • Maintaining contact with people in their database
  • Inspecting properties for all types of reasons
  • Checking out the local property trends, prices, rents, and time on market.

All of this is called ‘churn’ and you only get this when you ‘get back on the horse’ and ride it into your market every day.

If you have just come back from a break from your commercial real estate job, quickly take action to get back into your career and market.  Get your systems going again as quickly as possible!

If you are new to the industry, then you will soon see just how important these things are to your future listings and commissions.

If you want some more free tips for your commercial real estate career you can get them in our bulletin.

Cold Calling is Really Tough for Some Commercial Realtors

business woman talking on telephone
Get used to Cold Calling and talking to many prospects

When you first start up as a salesperson in commercial real estate, someone will tell you that you must prospect and cold call.  That’s where the problem starts for many a salesperson.  They have to stretch out well beyond their comfort zone.  They have to do things that they do not like or have not done much before. Here are some tips from our bulletin for Commercial Real Estate Agents and Realtors.

Now self-belief is a good thing; that is the belief that you will do the calls each and every day.  Real world experience says that most salespeople (8 out of 10) do little in the way of cold calls and will avoid it at every opportunity.

So Its Tough - Get Used to It

Make no mistake here, cold calling is really tough until you get used to it.  The only way to get used to it is to make the calls.  The real issue is that you must create a habit of the process, and so many salespeople struggle with that.
So how do you create a habit of this?  Here are some tips to help you:

  1. It is not natural to make cold calls for most people.  On that basis you must shift your mindset or thinking to that of ‘making an enquiry’.   If you understand that you are simply calling a person to see if they have a need or an interest, then the calling process can take a whole new momentum.
  2. Set a time each day for the calling process.  When you do this, it helps build your momentum and that will eventually become a habit.
  3. For a short while you will need to think about what to say in the calling process and you will need to practice.  The practice will help you significantly and fast track the results that you want.
  4. It takes about 3 or 4 weeks for the prospecting and cold calling system to become a habit in your business.  Lock up time in your diary for a full 4 weeks so you can stick to the process.

If you want more listings and better commissions in commercial real estate (and who doesn’t), then take on the cold calling process and make it work for you.  Challenge yourself to improve and grow with this great new tool in business.

Need more tips for your commercial real estate business?  Get our free bulletin right here.

Marketing Plan Strategies in Commercial Real Estate

business man and woman overlooking a desk and document
Create a good marketing plan specific to the commercial property.

When you take a commercial property to the market, the alternatives of marketing are many.  Importantly you are going to make the right marketing decisions based on the property type, the local area, and the prevailing market conditions.  Here are some notes from our Bulletin for Commercial Realtors.

It is interesting to note that many a commercial real estate agent or realtor will use a generic approach to marketing.  The end result in most cases will then be little or no enquiry.  With the market as tough as it is in most cases, you really do need a solid and direct approach to marketing every property that you list.  Enquiry must be generated at the best levels possible from the start of a promotional campaign.

Marketing Plan Strategies

So here are some specific strategies in commercial real estate marketing today:

  1. Survey the local area to understand just what other properties you are up against.  The information you will need will include time on market, price or rent, improvements, property size, points of attraction, and many others.
  2. Inspect your property listing fully to define exactly what its features will be to and in the advertising campaign.  Be creative and do not just look at the typical size, location, and layout of the property.  Every ordinary agent does that; top agents go a lot further into what the property is and what it can be for the target audience.  They describe the property in a better way that attracts the enquiry.
  3. Define the target audience that is relevant to your property.  In doing that, you will need market segments, market locations, ways to connect with that audience, time factors that relate to the promotion, and the list goes on.
  4. Top agents get involved with each marketing campaign on a personal basis.  They know that a good listing is a reason to talk to many people in the local area.  The process of connecting with others will always generate leads and information that will be of some benefit now or later on.
  5. Concentrate the marketing campaign to blocks of time such as fortnightly.  In this way you can assess the progress and type of inquiry.  You can also adjust the campaign if something is working or not working.  Do not wait too long to decide that you could have done things in another way.

Get the client involved in the property promotion.  Let them make some decisions with regard to advertising features, chosen media, and timing.  When they feel part of your activities that will help you get closer to them and that will be of benefit when they want to negotiate the sale or lease of the property.  Successful property marketing and negotiation is all about the trust between the agent and the client.

You can get more tips for commercial realtors in our regular bulletin.

Sunday, July 22, 2012

Retail Leasing Agents and Realtors - Tips to Fix Vacancies in Shopping Centres

shopping cart used in supermarket
Choose the right tenants in your Retail Tenant Mix

Retail shopping centres are an important part of the local and regional economy in most towns and cities.  They are also critical to the success and growth of the regional demographic population.  Retail shopping centres support the requirements of the community with day to day consumables, and also more specific purchases associated with clothing, lifestyle, family, and the household.  That is why the design of tenancy mix and leasing within a shopping centre is so important.  Here are some tips from our Bulletin for Retail Leasing Agents this week.

Retail Property Leasing is Special

That being said, the leasing strategy required for retail properties and retail shopping centres is quite specific and specialised.  Only some real estate agents will have the required expertise and knowledge to successfully manage and lease the medium to large or shopping centres.

A good shopping centre will serve the customers within its demographic completely and successfully.  Vacancies within the property will be minimised, and tenants will be encouraged to generate more sales in serving the customers.

Fine Line Between Tenants and Landlord

There is a fine balance in a retail property between the landlord, tenants, customers, and property manager.  A retail shopping centre should be built and around the requirements of the consumer.  Any decisions regarding property performance or tenancy mix should be made on the basis of the total property and not just the single location.

Here are some of the key tips to apply to the marketing process with vacancies in any retail property.

  1. Monitor the activities of other shopping centres nearby.  They will have pressures of occupancy, and tenancy mix.  They will also have the tenants that may require relocation or adjustment to another property.
  2. The anchor tenants in any other retail properties locally should be monitored for movement and change.  The shift of an anchor tenant away from a retail property can create significant disruption in property performance and tenancy mix.  You can monitor the other anchor tenants simply by walking through their premises and observing the levels of stock, layout, presentation, and customer trade.  It is very easy to see weaknesses in a retail tenancy.
  3. Keep in close contact with your existing tenants and tenancy mix.  It is very common for other agents to be approaching your tenants for relocation.  A close working relationship with your tenants will usually preclude the involvement and threat from other agencies.  Your tenants should feel comfortable in approaching you with their business challenges and needs as they apply to their lease.
  4. Address the vacancies before they arise by monitoring lease expiry dates.  Every lease will have some expiry date or some date associated with a lease option.  Any dates of this nature inside of the next 12 months should be worked on as a current issue.  There is nothing wrong with negotiating a lease renewal or a new lease early.
  5. Rent reviews in a retail property can create friction between tenants and landlord.  This is particularly the case when it comes to market rent reviews.  Understanding the pressures of supply and demand in local retail property will help both parties come to a sensible outcome with a market rent review.
  6. Allow the tenants to expand, contract, or relocate at the end of lease term as their business needs may require.  Successful tenants invariably look for other space in which to relocate or improve their profile.  Your retail property should be adjusted to support appropriate levels of presentation and customer sales.  In this way your good tenants will stay at the end of lease.  Understand the other changes in lease occupancy adjacent to your good tenants.  Some upcoming expiring leases could be offered to existing successful tenancies adjacent.  Importantly, the tenants within your tenancy mix should support the needs of the customer and the growth of the property.  In this way the market rental will be underpinned and escalated.
  7. Directly approach all the relative businesses in your local area for potential relocation.  Successful retail businesses in all other locations should be identified and found.  Arrange direct meetings with the proprietors of those businesses.  Discuss them with them the requirements of future occupancy, relocation, and change.
  8. Work with the franchise groups locally and regionally that may require alternative space for tenant occupation.  Franchise groups are fast becoming a critical component of a successful retail shopping centre.  These groups will usually have key components of occupancy that must be satisfied.  The leasing manager or property manager for a retail property should take the time to understand the requirements of each retail franchise group.  When a vacancy is known to be coming up, a direct approach can then occur to the appropriate franchise groups.  It is also the case that a franchise group will likely have a standard lease structure and policy.  Within reason these can be negotiated to satisfactory terms and conditions for your landlord.
  9. Ensure that the vacant space is correctly marketed and presented.  Some shopping centre managers will share their vacancy needs and tenant requirements with the other retail agencies nearby or in the local area.  There is nothing wrong with a conjunction arrangement when it comes to leasing retail premises.  Many specialist retail real estate agents will work together when it comes to the leasing of major shopping centres and any complex tenancy mix.
  10. When it comes to any lease negotiation, never let the tenants have the keys until the lease is correctly signed, all monies have been paid, and the guarantees are in place.  The same process also applies to the commencement of any fitout works.

A successful retail property is a reflection of good tenant management and vacancy minimisation.  This is a process for specialists that understand retail property.

Need more tips on Retail Leasing or Shopping Centre Management?  You can get that in our regular bulletin for Retail Property Specialists.

Commercial Realtors - Get the Price Right Before You Proceed

commercial agents in boardroom looking at computer
Commercial Realtors - Get your price and market facts together. 

When a commercial real estate client approaches you to sell or lease their property they will have a predetermined idea of price or rental as the case may be.  They will however test you to see if your price or rental expectations match theirs.  They will also want to apply their ideas in the sale or lease process with regards to marketing and negotiating.  Here are some tips from our Newsletter this week.

So the entire listing process is actually a negotiation; that negotiation allows you to get a listing that is correctly formulated for marketing, inspections, and closure.  If the listing is incorrectly structured, it can be a very big time wasting exercise for the agent.  A confident approach to the listing of any property is required.

Price Hurdles

In most instances, the price or rental required by the client or property owner will usually be at the high end of the existing market evidence.  In some cases the price or rental that they require could be almost unachievable and well beyond any comparable evidence.  The question will be whether you want to take on the property as a listing and market it under those conditions.

Some agents will take on anything, believing that they can condition the client into the correct price range or method of sale or lease.  That is a strategic decision that can be made individually however make the right decision based on what you see and know about the client.  On a personal basis, I would not waste time with property owners that show little flexibility to prevailing market conditions.

Don't Waste Your Time

Some property owners can be a total waste of time as clients due to some or all of the following:

  • Unrealistic expectations with price or rental
  • Reluctance to commit to paying marketing funds as part of promoting their property
  • Failure to be fully open and trusting with the agent working on their behalf
  • Lack of flexibility when it comes to the method of sale or the method of lease
  • A tendency to work with many agents in an open listing situation
  • Lack of motivation when it comes to a property decision or negotiation

So we can take one of the most important issues here and review it has to strategy and approach.  It is the factor of price.  A property that is too highly priced is likely to stay on the market for a very long time.  Within approximately 90 days the listing will become stale and old news.  This does nothing for the image of the agent as a professional and expert in the local area.

To support your estimate of price range with the client, the following strategy is useful:

  1. Visit other properties in the local area currently available for sale or lease.  Take the necessary photographs and get details of the asking price or rental.  Also seek details of the existing time on market as it applies to each listing.  The improvements in each property should be relatively similar to the existing listing.
  2. Put together a history of other properties that have been sold or leased in the local area over the last 12 months.  In commercial property this can be a challenge due to the unique nature of property improvements and location.  If this is the case, you will need to break the price analysis back to a factor of yield or return on investment.
  3. Go through your database to see if you have some qualified prospects waiting for a property of this type.  They may be suitable for an early inspection in the property marketing process.  They can also give you feedback relative to the existing property price or rental.

The best property listings today are taken on an exclusive basis for a lengthy period of time.  That allows the agency and the relative salesperson to formulate and activate the correct marketing strategy.
The marketing of commercial and retail property today is not an experiment; it is a specialised process requiring careful strategy.  Protect your time as a professional in the industry by listing appropriately to the existing market conditions.

Need more tips for commercial real estate agency?  Get our bulletin right here.

Commercial Realtors - Tips for Keeping Yourself Out of Trouble

business man thinking
Watch what you do and say as a Commercial Realtor.

Any a commercial real estate transaction involving sales, leasing, or property management is likely to be complex and protracted.  On that basis there is a real requirement to be detailed and accurate in your dealings with all people.  Many a salesperson has come 'unstuck' through poor documentation and the recall of key events.  Here are some tips from our Newsletter this week.

Watch Out for the Legal Process!

It is a known fact that people like to sue the real estate agents that they are involved with when something goes wrong.  Certainly the legal process is there to protect parties that experience error, negligence, or damage.  That being said, many a solicitor will suitably prime their client to pursue the agent and the professional Indemnity Insurance that the agent will normally have available in times of dispute.

Set Some Rules

So here are some rules that will help your business processes as you work as a commercial real estate agent.

  1. The results of any critical conversation or negotiation should be noted into written form and placed on file.  It is remarkable how important these notes become when people enter into dispute and legal activity.
  2. If any party or person issues you with verbal instructions it is essential that you acknowledge those instructions in writing or via email prior to taking action.
  3. Do not take any action if it is in breach of any local laws or legislation.  When it comes to property and particularly commercial property, there are laws that specifically apply to the sales and leasing process.  Your awareness of those laws should be maintained and updated as required.
  4. When listing a property take the time to fully investigate the factors that relate to property ownership and property function.  Many property owners will deliberately withhold information that they believe could negatively impact the sale or lease.  That will in turn impact the negotiation on the property when the time comes.
  5. Remember who your client is in the transaction.  It is very easy to closely relate to the other third party in the transaction and hence neglect the client agent relationship that you have under the legal listing documentation.  The client pays your commission and requires your commitment to total service whilst adhering to the instructions outlined in the listing documentation.
  6. When it comes to selling and leasing commercial property is very easy to say something that is incorrect or not thoroughly researched.  The golden rule should be that comments are not made until information is correct or verified.  When in doubt, seek more information before response.

The longer you spend in the industry the more likely it is that you will be the subject of or involved in a dispute and disagreement between parties.  The only thing that can support you will be the documentation you made at the time of the events.

Need some more ideas to help your career in commercial real estate?  Sign up for our Newsletter here.

Wednesday, July 18, 2012

Tenant Fitout Checklist in Commercial Property Today

commercial property foyer and entrance way
Every fit out is different and special.

When you lease a property or premises within a property to a commercial or retail tenant, one of the things that will soon lift its head, is the discussion regards the fit out and what it needs to be for ongoing occupancy.

Here are some fitout tips from our recent bulletin for commercial and retail property managers.

Tenant Control

Controlling the tenant in the fit out process is really important as they are likely to do things that the landlord would not want or the building cannot take.

So let’s go back to some basic rules here:

  1. The tenant should submit fit out drawings and specifications to the landlord of the property so they can be reviewed for potential approval.  Depending on the complexity of the building or the tenancy those plans may need to be submitted to the landlords building engineer or consultant.  Those consultants would be looking for anything that threatens the integrity of the property in any way.
  2. The intended fit out should comply with the permitted use as detailed in the lease document.  The permitted use in the lease document should comply with the zoning and planning regulations that apply to the building and the location.
  3. The lease document should have a make good clause that protects the landlord at the end of the lease from any costs associated with the removal of the fit out.  Normally those costs will be the responsibility of the tenant.
  4. The landlord should review the plans and drawings and then set the time frames and constraints for the works to be done.  In this way the landlord can keep the tenant away from other tenants in the property and potentially disrupting many other people.
  5. As work proceeds the tenant’s contractors should work to some guidelines of time and access.  They can access the property through areas that would not disrupt others visiting the property.
  6. Visual barriers should be placed to prevent any other people seeing the disruptions and construction work going on inside the premises.
  7. When the works have been done the tenant and the landlord should inspect the premises together to ensure that the works comply with the approved plans and drawings.
  8. The contractor for the tenant should not be allowed on site unless they provide necessary insurance cover to the landlord for the works that they are to do on the property.

Property Manager System

A good tenant fitout is a product of the controlled interaction between the tenant and the landlord for the property.  The property manager is the facilitator of the landlord’s guidelines and approval processes.

If you want some more tips for commercial or retail property leasing and fitout controls you can get them right here.

How to Lease Commercial Property and Get the Fitout Right

commercial office reception fitout
Fitout needs vary from tenant to tenant

When it comes to leasing a commercial or retail property, the successful fit out required by the tenant will be a process of good design, approval and implementation.  The landlord, property manager, and tenant work together in this process.

Here are some tips from our newsletter.

Depending on the type of property to be occupied, the cost of construction works within the premises may be very large.  Retail property and food type tenants have the most expensive and complex fit out arrangements; hence the costs of installation and construction will be high.


From a landlords perspective the important issues are to make sure that the fit out is complying with the building codes and function of the premises, and that the quality reflects in the property image. 

There is no point letting a tenant into a property with a low level of fit out quality that can detract from the other tenants in the same premises.  In a retail property this is really important.  The landlord is well within their rights to ask questions about things such as:

  • Design
  • Finishes
  • Make good at end of lease
  • Compliance to building codes
  • Layout
  • Staff levels and workspace layout
  • Customer access to the premises
  • Services and amenities to be used in the overall property
  • Construction times and access for builders
  • Air conditioning
  • Lighting
  • Electrical
  • Plumbing, etc

So the list goes on.  If you manage properties and many of them it pays to have some form of checklist to take you through the key issues that are of concern in the particular property.  The focus of the property manager and the landlord in working with the tenant is to ensure that all works are checked and understood before they are approved.

Fitout Design

Here are some other factors that could be useful in the fit out considerations for a property and a new tenancy fit out.

  1. Determine that the tenant has given you all the plans and drawings for the works intended.  They would normally include electrical, mechanical, structural, air conditioning, hydraulic, and plumbing.  All of the tenant’s works should correctly connect with the services and amenities in the property.  As part of that process, the tenant should comply with certain minimum standards when it comes to specifications of finishes and design; you do not want the new premises to detract from the other design issues in the property.
  2. Get the landlords engineering consultants to oversee any matters of concern that could impact the property function or operation.
  3. If the landlord approves the plans and drawings then the tenant must get the approval from the local building authority to the property changes and the fit out.  That would normally be a tenant cost.
  4. Identify the works to be done in the property and then set some constraints on when and how those works are to be done.  You do not want to disrupt other tenants in the property.
  5. The tenant’s contractor has to be approved by the building owner before they start work.  Of major concern will be the appropriate levels of insurance to protect the landlord from any events.

You can add to this list based on property type and location.  Importantly the right controls are exercised by the landlord or property manager on the tenant.  The end result can then be a great fitout.

Visit our website for more tips on commercial real estate leasing and fitout approval processes.

Commercial Property Managers - Keep Your Tenants Under Control

woman with cables in knots.
Tenants can tie you up in knots

When a new tenant is introduced to a commercial or retail property, it is important that the entire process is well managed and professionally staged.  It is advisable that the property manager gets closely involved with the new tenant for at least the first four weeks of occupancy.  So here are some tips from our bulletin this week.

A lease between a landlord and tenant goes for a number of years, and on that basis should be correctly established through professional property management processes.  Good relationships between the landlord, the property manager, and the tenant set the scene for a successful lease cash flow within the property.

Consider some of the following issues as part of that lease establishment process:

  1. The tenant needs to understand the property layout, design and operation.  That will involve some form of property briefing prior to occupation.  It is the job of the property manager or landlord to integrate the new tenant into the new premises.  Understanding that a new lease is actually a new business relationship, a few extra hours spent in this process will greatly benefit the relationship between all parties.
  2. The tenant should not be given the keys to the premises until the appropriate lease documentation has been correctly signed and completely satisfied.  As part of that process there will be the necessary payments of rental, deposits, lease guarantees, and the provision of any other associated documentation.  Many a property manager or landlord has mistakenly or innocently passed over the keys to a tenant prior to these issues being satisfied.  All good intentions between the parties can lead to a future disagreement, delay, and poor communication.  When tenants get their hands on the keys, their motivation to complete any outstanding matters falls away very fast.  Key retention is a very powerful tool in a lease negotiation and tenant occupancy.  Hold on to the keys until all lease issues are implemented and satisfied.
  3. The tenant needs to be briefed regards access to the premises, the operation of the property, and the people that they can contact when they need information.  The first few weeks of occupancy are always the most confusing and disruptive.  If the tenant is entering a property where there are many other tenants, it is important that the property manager stays close to the new tenant to minimising any confusion or disruption across the tenancy mix.  This is a very relative issue when it comes to retail property.
  4. In the early stages of occupancy, the tenant will have some requests regards maintenance, security, property access, services, and amenities.  Given the advances and availability of technology, the tenant should be given some simple method of communication to the right people and e-mail addresses for general matters verses emergency matters.
  5. When it comes to a totally new tenancy in a new building, there are likely to be other issues of fitout construction and design.  This also has added layer of complexity to the interaction between landlord, property manager, and tenant.  The fit out design and approval processes should be carefully controlled; that is the job of the property manager working with the landlord in overseeing the requirements of the tenant with their fit out.

It is notable that many commercial and retail property managers in the industry are overloaded with far too many properties and tenants.  This problem generally comes about for two distinct reasons.  Firstly the fee charged for managing the property is too low and therefore the property manager has to manage more properties.  Secondly the office principal fails to recognize the complexity of the work required in commercial and retail property management.

There is a lot more work involved in the management of commercial and retail property.  When it comes to the negotiation and establishment of the new property management listing, work load factors and reasonable fees need to be carefully considered.

An overworked or overloaded property manager will soon destroy the performance of an existing property portfolio.  Exercise care in the selection of the right person and or the distribution of workload.

You can get more free tips for commercial and retail property managers at our website.

Tuesday, July 17, 2012

Commercial Agents - Looking for More Commercial Property Management Clients

commercial office building skyline
Target quality commercial property managements

In commercial real estate today, many an office principal will know the high value of having a rent roll.  The income from the rent roll each month is stable and usually growing.  That helps smooth off the pressures of peaks and troughs in sales and leasing commissions.  Here are some tips from our Newsletter this week.

In commercial real estate the rent roll is specialised and uniquely run; you need special people to do that.  Unfortunately many property managers are put into the position with little or no training.  They have no idea of what they are doing or where to go to get help.  Graduating from residential property to commercial property is a major shift in tasks and work styles.

Major Differences

So there are major differences between residential property management and commercial property management.  Those differences are all to do with the way in which the property has to be run and optimised.  In addition to that there are many more things to do such as:

  • Lease management including rent reviews, rental options, negotiations relating to existing tenants and leases, and many other terms and conditions of the current leases.
  • Helping the landlords work towards and property plan and target
  • Maintaining the property so the tenants and the customers are able to use the property well
  • Connecting with contractors so that the maintenance in the property is correct and compliant to building codes and property usage.
  • Manage the tenant mix so the property is functioning correctly in keeping with building codes and compliance
  • Manage the expenses for the property so that the net income is as the client requires throughout the year.
  • Budget the cash flow for the property before the start of a financial year.

To get a fair fee in commercial property management, the service has to be there.  Landlords deserve property managers that can give the property some direction and control.

What Fee Should You Charge?

As to what fee you should charge to manage commercial property today, the fee should be appropriate to the work load.  A commercial or retail property with lots of tenants takes real strategy and work on a daily basis.  That being said, the property manager should not manage too many properties with too many tenants.

An overworked property manager can destroy the stability and performance of a commercial or retail property.  It should also be noted that a retail property is a lot more work to manage than a commercial property; on that basis the fees to manage retail property and shopping centres are generally higher to reflect the required work.

If you need more tips for commercial property management please check out our website.

Top Commercial Real Estate Prospects to Network

businessman meeting woman
Prospect to a plan

When it comes to commercial real estate sales and leasing, there are various categories of prospects that will provide different levels of opportunity.  Importantly, you should get to know the categories that are successful and active in your local area.

Here are some tips from our Newsletter this week.

The following categories are the most active in most areas.  They just require specific contact and ongoing relationship building.

  1. Property investors will always be on the lookout for quality properties.  If you focus on and list quality properties in the local area you will find the property investors will make themselves known to you.  Even in the times of tougher property markets, some property investors have held their portfolio for many years and are under no pressure.  They are sufficiently cashed up to purchase other quality properties at distressed prices.  In other words they are looking for a bargain.
  2. The activities of property developers come and go from the market based on the supply and demand of new premises, and the expected returns from the property development.  It does pay you to keep in touch with property developers for the times that they require land for a new project.  The margins and costs associated with every project will change based on land acquisition cost and construction costs for the development.  Get in touch with the local property developers to understand their priorities and processes when it comes to potential new opportunities.
  3. Look for properties that are going through change.  They can be redundant properties or those that are largely vacant.  Change can be a number of things including refurbishment, leasing programs, redevelopment, and rezoning.  Top agents tend to look at the opportunities that change presents and put together many deals off market and away from the prying eyes of other agents.
  4. Business proprietors throughout your region will be a significant opportunity when it comes to property change and occupation.  Business proprietors tend to look at change on average about every 5 to 7 years.  They could be leasing new premises, expanding or contracting premises, selling premises, or looking to purchase.  On that basis the business community and the business leaders should be networked on a regular basis.  Most of them will need market information and market help at some stage in the future.  Establish a 90 day contact program with all business leaders in the local area.

Look around your local property market and understand the segments that are active.  Also look for the weaknesses and the elements of change that are currently producing volatility.  Assess the supply and demand of future property and also look at the vacancy factors that apply to business premises locally.

Top agents are those that look for the factors of change and then tap into the available opportunities.

If you need more prospecting ideas you can get those at our website http://www.commercial-realestate-training.com/

Top Commercial Agent - Vacant Land Brings Opportunity

business man holding paper and pen
Understand the opportunity in Vacant Land

When you work as a commercial real estate agent, do not overlook the opportunities that the vacant land in your area provides.  I have seen many a local agent build their market share from a base of vacant land listings and redundant property.  Here are some tips from our Newsletter this week.

When you start your career in commercial real estate, you have to start somewhere with your market share.  Initially the whole process of prospecting can be daunting and challenging.  That is not to say that you do not prospect, but there are things to do and improve on as you prospect.  You need a system of prospecting and vacant land can be part of that.

Prospecting Systems
You can break your prospecting processes up into particular categories so you reach segments of the market.  Here is a typical breakdown you can apply to your system:

  • Owners of vacant land
  • Owners of redundant property
  • Business owners and proprietors
  • Tenants in buildings and in quality properties
  • Property developers
  • Property investors
  • Solicitors
  • Accountants

So this simple list gives focus to your prospecting model.  You have categories to work with and grow your market share from.  Vacant land is an easy place to start.

The Facts
The vacant land in your local area will one day be ripe for property development.  As the supply and demand for property changes in your area, the property developers will be on the lookout for new land to build on.

It should be said that the economics of a new property development depend on a number of things, but the raw material to start from is always the vacant land.  If you have a group of listings that capture all of the local vacant property then the enquiry will come your way.

What does vacant land give you?
Vacant land as a source of listing stock has particular attributes that fit very well into a market growth model for commercial salespeople and agents.  Here are the main advantages:

  1. Vacant land will give you sign dominance as an agent in the area.  For whatever reason many other agents overlook vacant land and the opportunities available.  Perhaps the listing is too hard to shift or the market is not right to sell the land right now; it really does not matter as you can get a signboard on the property and build your market presence.
  2. New developments need land as a base.  The lead time to a new development is longer, but if you have a large parcel of land as a listing, the complexity of the listings and the deals out of one parcel of land can be significant.
  3. Property developers look for land and will notice your dominance of all the quality parcels of land.  The links to property developers can be very productive and continue for the longer term.
  4. Supply and demand for business premises will change every year and seasonally.  As the economy strengthens, the agent with the vacant land listings will be well placed to capture the newer property developments as developers take action again.

If you need to build your market share as a local commercial real estate agent, use vacant land as a point of commencement, then work your way into the other segments surrounding the vacant land.

If you want some more prospecting tips to help your commercial real estate career, you can get them at our parent website.

Monday, July 16, 2012

Top Agents - Tell Some Failure Stories to Win the Listing

business man talking to woman
Have some stories to tell your client!

It is interesting just how some commercial real estate clients relate to a story or two in the marketing and presentation process.  They then know that they are not alone in the property marketing process.

Commercial or retail real estate is something that can be a complex property type and any sale or lease solution will be similarly complex.  That is why clients need us; we are the specialist agents to take the property forward.

Top agents are the specialists; invariably they have great stories to tell and feed into their sales pitch and presentations.

So what stories can you tell? You can tell some good stories and also some failure stories.  Both are worthwhile in the right circumstances.

Stories of failure have a use and can be built on the following rules:

  1. Do not give names or places that would let your current client think that you will talk about them later.  Preserve your professionalism at all costs.  Top agents do not gossip.
  2. The failure story should be a failure based on another client not taking the right action or the right path in marketing their property.
  3. Feed into the story your market knowledge and observations so the client knows that you really do know how to beat the problem and attract the inquiry.
  4. A story of another property owner’s failure will build your credibility, providing you offer alternative and strong solutions.  Your client can see the clear path that should have been taken.
  5. Do not tell failure stories that indicate that the market is ‘dead’ or ‘a basket case’.  Always look to the positive solutions that are available.  Any tough property in a tough market will have positive points that can be built on.

Become a great story teller, and your property listings will thrive.  The story connections that you make with the client will help them see solutions.  Common sense and market knowledge will take you forward and through well selected stories.  Most clients do not want to be ‘experiments’ in local property activity.

Need more tips on commercial real estate for your agency business?  You can get them right here.

Commercial Property Managers - Maintenance Management Tips

commercial property manager tied up in cables
Get control of maintenance

When it comes to the services provided by commercial and retail property agents, a specialist maintenance management program forms part of the property management services for clients.

The maintenance management program can become a significant point of difference in servicing property management properties of all types.  The program does however need to recognize the differences between industrial, office, and retail properties.  Checklists and systems can be specifically designed for each property type and general location.

These are the key objectives of the maintenance management program in a commercial property management agency:

  • Adherence to the instructions of the landlord client in implementing property maintenance.
  • The provision of timely responses to normal property failure and break down
  • The establishment of a workable tenant communication process to report and control maintenance failures
  • The management of costs associated with maintenance of all types
  • The provision of emergency responses in times of urgent property failure or breakdown
  • The provision of immediate maintenance response where the potential of personal injury or tenant injury is likely or possible

Given that most commercial and retail properties are complex, the property managers chosen for the task of interacting with tenants and landlord clients should not only be experienced, but also committed to a high level of response and service.  Property management is a unique service provided by commercial agents.

Here are some strategies to incorporate into a maintenance management program in your agency or real estate office:

  1. The instructions of the landlord should be fully understood when it comes to their particular property.  They will require a certain levels of communication and controls when it comes to maintenance, leases, tenants, and property responses.
  2. The maintenance associated with each property should be broken down into items of general maintenance verses major maintenance.  Costs should be established or estimated in each case for the purposes of the building budget.
  3. Items of major and minor plant and equipment in each property should be identified and logged.  Talk to the contractor's responsible for plant maintenance to identify any threats to property performance and plant operation.  A major plant failure can impact the occupancy and rent for a property.  In older properties, the plant and equipment should be carefully maintained to prevent that very problem.  Brief the landlord on any challenges that exist.
  4. Talk to the contractors in the building to establish that the plant and equipment is being maintained to current mechanical and building codes applicable to the property.  Non compliance could force property closure and removal of the property occupancy certificate.
  5. A budget for the property can be established to integrate timed and planned maintenance into the cash flow coming from the property and the tenant mix.

These are some of the key factors to incorporate into a property maintenance management program.  The agency can develop a comprehensive program that becomes part of a highly professional property management service.  Over time this can help you grow your management portfolio and your potential fees from established clients.

Need help with commercial property management or retail centre management ideas?  You can get our bulletin right here.

Commercial Agents - Resolutions to Consider in Your Proposals and Pitches

Top Agents ask questions.

Proposals to sell or lease commercial property are a common fact of life for the average salesperson when you work with corporate or more experienced clients.  That being said, beware of the client can waste so much of your time in the submission of a proposal.

If the client wants a fully written proposal and presentation, ask them why!  You and I both know that the document will take a great amount of time to collate and submit.  Imagine what your diary would be like if you had 10 proposals to do this week.  If the client wants a proposal, ask them to explain the key issues for the request before you agree to do it.  Get them to drill down on the real facts of the request.

If you are dealing with the decision maker, then a request for a proposal is a side-step away from you.  If you had done a great job in connecting with the client or prospect, you should have won the job.  Beware of prospective clients that can waste your time.

Top Agents and Proposals

Top agents rarely do a comprehensive proposal.  They will usually have won the job before the paperwork is even discussed.  Work on your relationship with the client and not the proposal submission.
In your meeting with the client let them see that you are really the best solution to marketing their property.  If they ask you for a proposal, the likelihood is that you have not sold yourself sufficiently to move on the listing.

In most cases a client that is looking for a proposal, is really looking for you to give them a reason to dump your services.  They have already made their decision to move ahead with another agent!
The dreaded proposal is all too often a time killer and a great disappointment for all agents.  Work on relationships and not proposals!  Create more relationships and less proposals.

If you are working with a client on a potential listing you can use these strategies to position your solutions favorably:

  1. Walk through the property with the client before you do a proposal.  This process will help build the personal connection with the client.
  2. Plant some questions in the client’s mind on key property issues that will derail the competitors that you are up against.
  3. Tell stories of other property clients that you have helped and how you resolved the property challenge.  It is remarkable just how stories are remembered and connected with in any property presentation.
  4. Give the client a good idea of just how you will move ahead in today’s market.  Let the client feel that you really do have a specific solution that they need to promote their property.
  5. Local market knowledge will always help the client understand what has happened in the property market and what the target buyers and sellers are looking for.  Every property promotion is a definite process; it’s not an experiment.

Get control of your client and your proposal submissions.  See them for what they are and react appropriately.

You can get more free tips right here from our regular bulletin for Commercial Real Estate Agents.

Saturday, July 14, 2012

How to do a Great Proposal in Commercial Real Estate Today

business man giving thumbs up signal
Top agents need top proposals

Many potential clients or prospects will ask you for a proposal to sell or lease their property and then compare the document that you submit to all other proposals that they get from other agents.

Here are some tips from our bulletin for Commercial Real Estate Agents.

Regrettably, a lot of commercial agents and salespeople jump at the proposal request and spend far too much time on the creation of the document.  Invariably the proposal then turns out to be something like the following:

  • A large document talking about the strengths and abilities of the commercial real estate agency
  • A complex document with far too many words that are unlikely to be read
  • Something that lacks strategy and timely solutions given the pressures that are applying to the client and their property
  • A complete mismatch to the requirements of the client
  • Little market commentary that can give the client key solutions to move ahead in a competitive market

If a client wants a proposal, ask them why that is the case (as you can answer all of their questions right now); if you still choose to proceed in the proposal then ask them to tell you of the most important things they would like addressed in it.  Tell them that a proposal is a very specific document that has to match the client and the property; before you start the process you would like to fully understand the client’s priorities and pressures.
In other words a request for a proposal to sell or lease a property is not a moment in time to get excited about; keep your control on the request and ask questions before you say ‘yes’.  Far too many agents jump at the request to do a proposal only to find that they were never in the ‘running’ and that another agent was on the scene ready to go.  Your proposal was used as a reason for the client to choose the other agent!

Here are a few things that typically happen with the commercial real estate proposal documentation that you create today.

  1. The client will use the proposal document to justify the choice they have already made.
  2. The client will go to the price strategy, marketing strategy, and commission as part of the assessment process.
  3. You will be given a short time with the client to go through the proposal and talk about the solutions you can provide.

The big problem here is that the client is in control.  They are in control from the moment they ask you for a proposal.  Your eagerness to comply with their requests can be your greatest weakness.  Invariably the client will use your proposal as a base of negotiation across a number of different agencies to achieve a discounted commission and a low cost solution in selling or leasing the property.

Do you really need to work with clients that come from a base of discounting and cost savings?  Do you really need to help them with a competitive proposal that they will compare to every other agency in the local area?  Shouldn't you really work with clients that respect the strategy you provide and the initiatives that you can move the property through as part of the marketing process?

Some ‘top agents’ will not do proposals; they win the business from a base of experience and relationships.  Most ‘top agents’ will not do a proposal because they know what the client is going to do with it (use it as a comparison tool).

So here are some strategies that are worth considering if you choose to submit a proposal to the client as part of a competitive process.

  1. Do not discount your fees or commissions in any way.  It sends the wrong signal to the client and shows them that you are prepared to comply with their requests simply get a listing.
  2. Your proposal should be short and to the point.  As a general rule, the document should be no more than ten pages in length.  At least 90 per cent of the document should talk to the property marketing strategy and the client’s needs.  It should be a document with a timeline of strategies that are easily identifiable for the client.
  3. Put a time limit on your proposal so the client has to make a decision in a timely way.  Seven days is sufficient time for the client to make a decision.  Give the client some solid marketing solutions to move ahead.
  4. Tell the client that your strategies and solutions are part of your office marketing strategy for the coming week.  When the proposal expires you will move on to other properties that are coming into your office and agency.  
  5. Tell them of a short list of prospects that you have already identified in your database and who will be approached as soon as the property is listed.
  6. Give them a legally binding listing appointment and ask them to sign it at the time of your proposal.
  7. Use graphics and images in your proposal so the client’s interest is maintained in reviewing it.

Proposals for listing a commercial property are largely won and lost on just a few things; they are the knowledge and confidence of the individual, and the strategy or solution provided.  The proposal is only a small part of the equation.  Build relationships at every opportunity; that will win you more business than anything else.

You can get more free tips for commercial real estate agents at our website right here.

Commercial Agents - Mistakes to Avoid in Listing Commercial Property Today

agent stress commercial real estate
Avoid mistakes in listing

Some agents list a commercial property without due care and focus.  They take the listing without full investigation and review of property details.  What later happens is that the client raises a problem when you are negotiating, and the hurdle is so difficult at the time of contract or lease that the negotiation could fall through.

Here are some tips from our bulletin for commercial property agents.

So the message here is to check the property fully before you take it into a marketing campaign.  Here is a short list of issues that can be looked at.  You can add to the list yourself given your local property knowledge and the particular property type.

  • Property title and full description
  • Property ownership and motivations of the owners
  • Why do the owners of the property want to take action today?
  • Why did they buy the property in the first place?
  • When is the right time for them to sell?
  • Do you need to fix up some lease or vacancy issues before you take the property to the market today?
  • Details of the improvements in the property will always require review and full inspection
  • Relationships of the property to any adjacent properties and boundary issues
  • Property legal use and zoning permissions should be checked.  Make sure that the property is legally correct for its current use.
  • Development opportunities given local planning regulations.
  • Any orders or notices that may be hurdles in the sale or lease
  • Details of property running costs and outgoings currently that have an impact on property net income.
  • Lease and tenancy mix details that underpin the property income and tenant profile.
  • Up to date cash flow issues coming from the rent reviews, leases, vacancies, and tenant mix.
  • Any lease expires that can detract from the marketing of the property
  • Sale or lease requirements of timing and price or rent (as the case may be)

So even in this short list there are many things to consider.  A checklist will always help you with the process of review and the collation of information.

Get All The Facts

When it comes to listing a property it is better to take time in the process and get all the facts.  Many of those facts will detract from or impact the price or rent.  You do not want to be caught later with a ‘deal breaking’ problem that slows the transaction or takes the property off the market.  It is well known that many a property owner will not willingly give you all the facts about the property; you will need to delve into the facts yourself and ask the right questions.

You can get more information about this at our website right here.