Property Lifecycle and Agent Opportunity
Commercial real estate agents know that there is opportunity to be had in the lifecycle of property. Every stage of the lifecycle will provide factors of change and churn. To work with that it is a matter of knowing what the property investor wants to do with the property and when.
Here is a simple list of the stages of the ‘lifecycle’:
- Property Zoning changes
- Supply and demand within property types
- New property developments
- Growth of the asset in income, and occupation
- Maturity in property performance (rent and property values)
- Property decline due to deterioration or reduced demand
- Re-evaluation of asset use and performance
- Highest and best use assessment for the property asset
- Renovation of the property to maintain occupancy and use
- Redevelopment of the land and or property
All of these stages require the services of a good agent that understands the property type and the market. Sales, Leasing, and Property Management services all have a place to fill in each of the stages.
To help you work with these ‘opportunities’, here are some investigations you can make and factors you can track in your town or city:
- The local planning office will control zoning changes and development activities. They will regularly release updates detailing new property use or construction applications under consideration; that will include applications approved, and intended changes to the planning and property use rules in the area. From those things you can find new listing stock and clients to serve. Some newer property projects can take time to move through the construction phase, but in many cases the property developer or property owner will want help with marketing and leasing or sale.
- Some properties will be struggling with tenant mix or occupancy levels; that could be because the property is getting older, vacancies are rising, or the property in need of renovation and refurbishment. To maintain reasonable levels of occupancy and market rent, the property owner should be taking the property through an upgrade; the timing of the upgrade will usually be based on lease expiries, vacancy changes, and tenant movement. That is where a good agent can help with both strategy and in locating new tenants.
- Vacant land can move to the development phase when the zoning is right to do so and the local property market is showing sufficient growth and business movement. Track those factors so you know when and where the next property development should be made and on what basis.
To work with the opportunity in the lifecycle of local property, look for the pressures and the changes. Get close to the property owners that need your help. Provide the solutions that maintain the momentum in the property investment.
