Wednesday, December 31, 2014

Commercial Real Estate Agents - A Direct Approach to the Opportunity in Investment Property Sales

City view of high rise office buildings.
Commercial Investment Sales is a special segment of the property market for agents and brokers.

Commercial property investment sales will provide a good commission based income for agents if they understand the mechanics of the property market in their location, and if that awareness translates into lead generation and listing conversion.  Commission only comes to those agents that work for it.  Systems and processes will help grow results in investment sales.

Here are some ideas from our recent Agent Bulletin.

Why focus on this segment of the market?  Well, it is a known fact that investors are repeat buyers and sellers of quality properties.  On that basis you can get to know a number of local investors that are active in particular property types.  That being said these investors know what they require when it comes to rental income, tenant types, lease strategies and property selection.  They are discerning and selective.

Established property investors are on the lookout for better properties to complement existing property portfolios.  Knowing who those investors are and how to contact them is the key to market growth and consolidation for any agent or broker.

Top agents know how to find and service investors.  Local market knowledge is a valuable commodity to be offered by any agent to a property investor.

Here are some ideas to help you get this process underway.

  1. Who are they? - Look for Property Investors in your area or city.  They will want to move properties and acquire more from time to time.  If you are the agent with all of the quality listings then it stands to reason that investors will speak to you when something of interest is listed.
  2. What do they want? - Understand what investors are looking for by way of property, cash flow and location.  There will be differences across your city with rents, prices, and growth.  Some investors hold property for certain periods of time and look to structure investment improvement during that time.  The question is will the property offer capital gain and income or rental improvement.  Look for the key performance indicators that can show you the trends.
  3. Property Watch? - Track new and existing property opportunity.  Things can change locally with property zonings, roads, building approvals, and planning changes.  Keep a close eye on the activities of the planning approvals board at your local municipal council.  Watch for the regional changes that can impact property use or ownership.
  4. Marketing Choices? - Choose the best methods of sale and marketing.  Results are everything in investment property activity.  Some methods of sale and marketing will work better than others.  Determine what strategies work for different property types and build your marketing campaigns to suit.
  5. Conditioning Clients? - Condition your clients to the prevailing market conditions.  You know your property market (or should do) and your clients will have their opinion of what the market is doing.  Keep up to date on current market conditions so you can put ‘comparables’ together as part of conditioning your clients to today’s prices and rents.  Don’t take on a listing unless you truly believe that you can convert a successful transaction for the client at somewhere near their expectations.

Confidence and knowledge are the keys to results in commercial investment sales.  It is hard for any client or prospect to debate or refute existing market facts.  Ask better questions of your clients and prospects and show them why you are the best choice of agent to help them.

Need some more help with Commercial Real Estate Brokerage?  Join our online community here.