In commercial real estate brokerage, the investment sales part of the industry is quite special in many different ways. Typically as an agent you would be working with investors of all types looking to improve portfolio and property performance through sales, disposals, redevelopments, and acquisitions. It stands to reason that the number of investors that you know will directly correlate to the size of your database, and the potential opportunities you can create with future and current sales.
There are always plenty of investors looking to buy and sell. They are motivated by different property types and opportunities. Finding those investors can be a challenge given that they are likely to own their properties within a company structure or a property trust. It is easy to identify the properties owned by investors, however it is a lot harder to identify the actual decision makers in each case.
If you focus mainly on listing and marketing prime properties in good locations, other investors are likely to connect with you as part of making a property enquiry. With any property that could be suitable for investment, ensure that you have structured a successful and direct marketing campaign using vendor paid marketing funds. Spread the message comprehensively regards your quality listing through direct marketing and personal contact. In talking to many other people, you will find those property investors that are looking to expand or change portfolio activity.
Here are some tips to help you as the agent or broker to find more local investors to serve as part of providing your commercial investment property services:
- Look for properties that can be redeveloped or improved. To understand those factors, review the local development plans for your town or city and talk to the local planning officers about changes to the development plans. Look for situations where the zonings of property allow for upgrade or change in property use. Make direct contact with property owners impacted by those changes and opportunities. Some of those owners may want to upgrade or change property ownership.
- Every property will have a ‘highest and best use’. That use will provide the better level of market rental and tenant enquiry. Those factors strengthen the performance of a property for investment over time. Look at each property with a view to identifying factors of improvement in tenant mix, market rent, and occupiable space.
- When reviewing a property, look at the tenant mix and the levels of existing or potential market rental. Bring into that analysis the outgoings for the property so you can assess the current net income and yield (capitalization rates). How do those rates compare to other properties locally? Can improvements be made?
From these things you can assess the investment potential of a commercial property. Understand the property variables in each case and look for a property that can be improved for your clients.