The Things I Have Learnt About Commercial Real Estate Investors

city at sunrise

In commercial real estate brokerage, you can and should work with a good number of property investors in your local area, to help them with property pressures and changes.  Constant contact and local property awareness will help you find those opportunities. (NB – you can get our commercial real estate course right here)

So what are the signs of pressure in commercial property?  Try some of these:

  • Existing vacancies in investment properties
  • Tenants that are struggling in business viability and rental payments
  • Changes to market rentals and tenant inquiries for leasing
  • Incentive pressures in lease negotiation
  • New property developments coming into the market
  • Stale and continuing vacancies in properties
  • A shift in property portfolio performance

The list is not finite, but it will give you some good ideas as to how you can move into helping more investors.  Some investors will be more valuable than others from a client perspective.  Do undertake an assessment of every investor based on property size, type, location, and asset value; you do this so you know exactly what they have now and what they want from a property perspective.  It is also likely that some investors will have multiple assets as part of a portfolio, so the broader concepts of cash flow will be important.

VIP Clients

The best investors should be your VIP clients for the long term.  Look at the many different ways that you can help them. Communicate with them regularly and specifically for the location and within a number of property categories. Provide the information targeted at investment performance, rental opportunities, property values, and future supply.  The quality of the information that you provide will help brand you as the agent of specialization for the location and property type.

Here are the facts that I have observed about property investors and having them as clients in commercial real estate:

  1. Local information is valuable so use it – Your information about the local area, the prices, the rents, and the recent transactions will be very useful as you connect with more local people. The investors like to know about trends, indicators and outcomes.  Use your deals and listings as points of leverage as you connect with new people.  Establish the links so you can connect into the future.
  2. Specialized services are required – Choose just one or two property segments to specialize in. You can then cover all the brokerage tends in prices, rents, supply, inquiry, and demand.  You have a few different segments to look at such as office, industrial, and retail; but then you can go deeper into locations and property sizes.  Build some stories around assets and client situations where you have been the catalyst of change or the main solution provider.
  3. Timing is everything – You never really know when a client will need help, comment, or service. The triggers are usually finance pressures, vacancy factors, rent or income generation, and asset performance.  Given that investment finance is usually based on five year cycles, you have a good idea of when you can help your clients as they move through asset performance and refinancing.
  4. Look for asset changes and income weaknesses – Investment is all about income growth and stability. A property with many tenants in occupancy is a constant opportunity for brokers as the owners and investors move through rental and lease issues.  What services can you provide specifically in those segments?
  5. Decisions are mostly logic based – If something needs to be done, then it is simply a process of putting some logic to it for the investor. Better decisions are made from logic, information, statistics, and performance indicators.  Gather the facts from your property market and use that information in many different ways.

Looking back on these issues and the property investors that I have known, I can see that there will always be a need for professional brokers that have a solid and comprehensive coverage of the local property market in their town or city.  That is what investors really want.  Most agents and brokers are too ‘ordinary’ to make a real difference.  That is an amazing opportunity for those that can and do strive for excellence.

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