Some commercial real estate clients require real understanding when it comes to property choices and investment. You know the local property market, but they know their preferences when it comes to properties locally. Matching their property ‘ideas’ to the ‘reality’ of the property market in your town or city is so important to getting anywhere in the industry. (NB – you can get plenty of client service ideas in Commercial Real Estate Brokerage in our ‘Snapshot’ program – it’s free)
So, some good questions are required of the clients that you work with and or would like to attract to your brokerage business. Seek to understand your clients as you find the alternatives that best suit their ‘challenges’ in local property.
Know the Client Facts for Property Locally
Here is a list of criteria to explore with your prospects and clients as you match your services and listings into their requirements:
- Portfolio balance – Find out what they own now by way of property; ask about location and property types. Existing properties can more put pressure or opportunity on the investor as they seek to make the next ‘move’ in their investments. At any time through the year, some property types can be more or less attractive for investment, particularly due to economic changes and pressures for a location. So, you need to understand those pressures in your location. Know what businesses and investors are thinking locally. Look at supply and demand factors for your region. What are local people purchasing and why is that so? These facts help you react to and service property opportunities.
- The diversity of investment – When you look at creating some diversity for a client, you can consider factors such as capital gain, property type, tenant mix, vacancy factors, and income generation. The factors of ‘diversity’ are considerably different between industrial, office, and retail property. Look for the differences for your clients.
- Property types – Some clients prefer certain property types, given that they can understand the investment strategies for the asset class. At the basic end of the property scale, you have the ‘industrial’ category of investment. ‘Office’ property is generally more complex, and then ‘retail shopping centers’ are at the top of the list when it comes to complexity. Categorise your clients based on property types and the preferences related to that.
- Income stability – When you consider a tenant mix and property, you will see that some tenants are better than others when it comes to paying rent, occupying premises, using the improvements in the property, and complying with the rules of the building. Set some analysis in place for the existing tenants so you can understand the income stability and growth factors that could apply. Tell the client what you are seeing and hearing regarding that.
- Risk minimisation – Some tenants are ‘volatile’ from an occupancy perspective. They have business pressures involving trade, sales, relocation, expansion, or contraction. They are the risk factors that you must watch for and work with for your clients. Stay close to your tenants in all the buildings owned by the landlords that you serve. Ask questions and take plenty of notes for the times that change could disrupt the asset or the client’s cash flow. Look for the pressures so you can provide real property solutions.
- Preferred location – What parts of the town or city do they prefer to invest in? Do they currently have existing properties now that require help or change? Get to know the precincts that your client prefers and invests in.
When you look at these things for a client or prospect you can soon establish the alternatives and the ideas that can help them with property ownership or change. Set the targets that apply to value or price range, return expectations, and growth bias from their perspective.