In any sales job you must have a good prospecting model. Commercial real estate sales and leasing is no different. The prospecting model in the commercial real estate industry is however quite special to the type of property you work around and the clients that you deal with. The database that you create has to capture property investment detail such as area, property type, price range, rent levels, special property needs, and location detail. The database you use should be versatile enough to do that.
It’s worth expanding on this prospecting point so that you can construct the prospecting model that works for you. You have to have leads and lots of them to make money in commercial real estate. It’s not really the office that you work for that actually matters, although it will have some minor impact. The real results that you get in the industry come from one activity that you and only you control; it’s called prospecting.
Those people that start up in the industry do not really ‘get it’ for some time. They think that business ‘walks in the door’ of the office. Only a small amount of business will come to you in that way. In fact the more you sit in the office, the less successful you will be. I tell many new people to the industry to spend no more than 2 hours a day in the office, and the rest of your time in your market.
So what should you do ‘in your market’ each day? Here are a few main activities that are obligatory.
- Get a map of the streets that contain the property listings that you are interested in. Check out the good properties in the street and note them on the map. Any properties of note should be tracked down as to who owns them.
- Walk the streets each day, entering the businesses and asking to speak to the business owner or General Manager. Leave your business card if the right person is not available. Do at least 10 businesses per day. What you are looking to do here is introduce yourself but more particularly find out if the business is a tenant or an owner of the property. This is invaluable market intelligence.
- The golden rule of prospecting contact in commercial real estate is for you to make direct contact with the people that are qualified prospects at least every 90 days. This cycle does not stop. You should be doing at least 5 of those every day over a 90 day period. When you do your numbers this indicates that you should be working at least 300 qualified prospects.
- Suspects are the other people you contact and they are approached simply to see if they should become prospects in your group of 300.
- Send at least 5 letters a day to people that you know own the best properties in your area. Always follow up these letters with a telephone call.
- When you have made a sale or a lease in an area, make contact with the nearby owners with a letter telling them of the success. Always follow up those letters with a telephone call.
- Meet the tenants or occupiers of any neighboring properties that are adjacent to things that you have listed for sale or for lease.
- When a sign board goes up on a property through another agency, make sure you personally canvass the other properties adjacent and near to those listings. Most property owners would rather compete through another real estate agent should they want to also list their property for sale or for lease.
- Look for vacant property, as this is always a reason to contact the owner to see if they want to sell or lease the property. A vacancy is usually a landlord ‘pain’ factor that requires relief.
- Check out the local planning authority each month to see if any new developments or rezoning applications are going through. The local planning authority is most likely located at the local council and they usually have minutes that are available for public scrutiny.
- Work the investment cycle of buy, lease, and sell in your area. Property investors will usually buy a property, hold it for 5 years (on average), lease it during that period, and then position themselves for another purchase or sale. This then says that you can work out the best listing opportunities from the lists of properties in your area that were purchased about 4 to 5 years ago.
- Create a great database from your enquiries for other properties. A carefully constructed and executed property sale or leasing campaign will always leave you with many leads for other property opportunities. One good property marketing campaign will leave you with well qualified contacts that you can shape up for future opportunity.
- Make lots of calls each day. The telephone has to be your friend so get used to using it. Sure you will make lots of calls to suspects and most of them will say ‘no’ to your offering. The best way to make lots of calls in commercial real estate is simply to use the ‘Yellow Pages’ of businesses in your area. A carefully crafted telephone conversation will identify whether the business is a tenant, a property owner, or a property buyer. All of these categories offer opportunity.
- Monitor the ‘time on market’ of other agents listings. Not only will these be a source of listings later for you, but the ‘time on market’ will give you an idea of what is selling or leasing and what is not. Avoid overpriced listings at all costs unless you believe the property owner will bring their price down.
- Check out all ‘for sale by owner’ listings. They may not sell or could be a later source of listing for you when the property owner has given up trying to do the job themselves.
- Business owners will tell you a lot about the area and the neighboring properties. You just need to ask the questions. Taking to business owners every day will help you build your resources for listing opportunity.
- Strengthen relationships through constant 90 day contact with all your prospects. Create lots of qualified prospects through sifting through lists and direct telephone calls to suspects.
You may look at the list and say that it is obvious; surprisingly most commercial real estate people do very little of what is on the list. Why is that? They simply lack the personal focus and do not follow through each and every day. If you follow the rules in commercial real estate, you will become very successful. Commissions will flow toward you and you will be the agent of choice.