There is no doubt in my mind that investment sales as a segment of the commercial real estate market is or can be very lucrative for most brokers and agents. That being said, it requires total respect and specialisation if results are to be established and improved. It is a special part of the property industry.
The typical investment clients buy and sell multiple properties and consolidate portfolios of assets. A good client can bring to you a good number of transactions each year across sales, leasing, and property management.
Why is that the case? You are working with a special category of client from either a sale or purchasing perspective, and the client needs to be understood in a comprehensive way. Specialise services can be offered to the right client at the right time. Top agents know the value of working with investment clients.
What do clients want?
So consider the client and what they are looking to achieve with their assets or their investments. That client will be focused on income and value improvement, so there will be some extra brokerage involvement in an ongoing way with leasing, and property management. They will also be factors of portfolio change and upgrade to help with property improvement. Are you up to the challenge?
The investment facts?
The investment property has to allow one or more of the following:
- Improve property valuation over time
- Have opportunities for growth of income (rent)
- Have the potential for expansion and redevelopment
- Attract good tenants and retain those tenants for the long term
- Minimise and resolve vacancy risks well ahead of any lease expiry
- Hold its value and strengthen investment results
- Match controllable expenditure within industry averages
- Improve net income through more efficient expenditure controls
- Establish efficiencies with property consumable such as energy, water, and gas
How can you help with all of these things? Develop your professional commercial real estate services in ways that can help with resolving these problems and improving property performance. Here are some ideas to help:
- LOCAL FOCUS: Stay in touch with all of the local businesses in your area from a tenancy and movement perspective. They may soon require alternative space to occupy or expanded space for successful business operations.
- DOCUMENTATION: Understand the variations that apply to lease documentation and negotiation. There are a number of different strategies that you can use in any lease negotiation to improve the investment outcome. Specific leases can be negotiated for investment properties and the landlords in each case. The quality of lease documentation in any property will always impact investment outcomes and buyer sentiment at the time of sale.
- SUPPLY AND DEMAND: Track the factors of supply and demand applying to local property types and precincts. Understand the levels of future supply that could have an impact on rental outcomes and vacancy factors.
- NEW DEVELOPMENTS: Look for the new property developments under consideration and planning. They could very well shift and change lease incentives and market rentals for nearby and adjacent properties.
So there are some good things that you can do when working with investment properties and investment clients. Develop a specific set of services to help your clients with the challenges of today’s property market.