In commercial real estate brokerage, it is essential that you know where you are from a market and an industry perspective in your territory, town or city. An ongoing assessment of the property market will then allow you to refine your approach and build on your strengths as a broker or an agent. Financial goals and key performance indicators will keep you on track. It’s a simple formula to work on and watch. (NB – you can get plenty of extra tips in commercial real estate brokerage in our free course right here)
Create Your Points of Brokerage Difference
It is always good to work with commercial property in a large city or town. That being said, there are always good number of competitors within a location chasing the same listings and clients; to win the new business and the quality properties in reasonable volume, marketing points of difference and market share, are factors that need to stand out in any property presentation or listing pitch.
Most clients prefer to work with the agents that can show relevant knowledge for the property type, professional skills for the task required, together with confidence, market coverage, and strategic advantages that a property marketing campaign requires. How do you rank on those items? Can you improve your profile on those things?
A strategic approach to the property market and a good degree of business planning will help an agent or broker refine actions and outcomes. It is almost impossible to achieve reasonable results in commercial real estate brokerage without a personal plan and or a base strategy of prospecting, marketing, and negotiating. With such a plan, you can track your actions and re-actions. So, it is time to develop your plan.
Think about your personal business plan and the elements of your property market today. Where would you be positioned from a competitive perspective within the location and within certain property types? It’s an important question to consider and track. Numbers are everything when it comes to personal performance in commercial real estate.
Develop Your Approach
Here are some ideas to help you refine your approach to team and personal performance in commercial property today. Consider these numbers in your real estate business:
- LISTING STOCK: Look at the number of listings that you currently hold. Split those listings between exclusivity and open listings. Assess the time on market that applies to each listing and property type. It is better to work with a small number of exclusive listings than to have a great number of open listings. It is difficult for an agent to work with more than 15 to 20 exclusive listings at any single point in time, simply because you are too busy. If a property is correctly positioned and promoted, the conversion to a closed and completed transaction should be greater than 75%. A good degree of client conditioning goes with that. I go back to the point that exclusivity is critical to control of market share, control of the listing, and client communication.
- COMMISSIONS FROM TRANSACTIONS: Look at the commissions that you are converting per transaction within sales and within leasing. Don’t look at commissions from a total’s perspective; assess the commissions by property type and by transaction type. In that way, you will be able to see how your listing size and listing quality is improving. Based on the property averages of size, price and rental, you will generally achieve higher commissions through a commercial real estate sale than through a commercial real estate lease. Understand how you can improve the size of the transaction rather than the number of transactions. You can then set some goals when it comes to sales per week or per month. The same rule applies to leasing transactions.
- ASK FOR REFERRALS: Track the referrals that you are creating from existing business and current client contact. Your referrals should be increasing over time given the expected and typical increase in market share that applies to brokerage sales and leasing.
- YOUR ONLINE LISTINGS AND PORTAL USE: Understand the number of listings that you have online, and look at the number of priority placements or prime listing packages you have sold as part of a vendor paid marketing campaign. An increase in vendor paid marketing per campaign, and an increase in campaigns per month, will always give you a greater level of enquiry and therefore a better chance of converting enquiry to results. They shall commercial real estate business around property promotion and marketing. Position yourself as the top agent using the best and most effective marketing solutions. Prove to the local market that you have the ideal formula to attract enquiry and convert inspections toward negotiations.
- LOCAL TIME ON MARKET RATIOS TO ENQUIRY: Assess the factors of time on market that apply to your location and then compare your listings into those ratios. Look at the different methods of property promotion and marketing to achieve ever more coverage and greater target market penetration. Graph the results that you are getting with listings, time on market, and prices or rents. The clients and the prospects that you are working with will always like to see statistics and results as part of the acceptance and listing process. ‘Show and tell’ is a good strategy to use with your clients and prospects. Merge some of this visual material into your listing presentation and marketing pitch. Give the client some solid and direct reasons to accept you as the agent of choice to solve their property challenge.
So, there are many good things you can do here to track the financial goals and the key performance indicators relating to commercial real estate brokerage, be that in sales or leasing. Focus on the quality properties and the qualified clients within your location. Build your system and your strategic plan accordingly.