The situational analysis will help you understand the strengths and weaknesses of your commercial real estate business and brokerage function as it applies in the local area.
When you undertake an analysis of this type, you can understand how your business can move forward and with the best focus that is matched to the property marketplace.
Know Your Location Comprehensively
In every town or city there will be different challenges to address when it comes to the property market, the clients, and the people working in the industry. Your review of the location and the market situation will help you plan for the future. It will help you greatly in focusing your efforts on the things that really matter.
So here are some of the main factors to merge into your situational analysis and market review:
- LOCAL AREA: Assess the location geographically within defined areas and precincts. Some locations will be busier than others when it comes to property enquiry, listing opportunity, and future development opportunity. Split your geographical area into primary and secondary zones of opportunity. You will soon understand where the new business will be coming from and how that business will be generated. As part of the area or location assessment, do an analysis of supply and demand within your priority segments of property type and location. Where will the business come from? What will be the priorities for new business opportunity over the next 5 to 10 years?
- KNOW YOUR PEOPLE: Given the people within your brokerage business, look at the strengths and weaknesses of each individual. Some people will have some real advantages and skill sets to be used in your property operations. Any weaknesses within the team will need to be addressed through training and knowledge improvement.
- PROXIMITY: Ideally your office location should be in close proximity to the market that you serve. Understand the logistics requirements for the office as well as the access for staff, customers, and prospects.
- MARKETING STRATEGIES: Review the challenges of marketing through your location. Marketing strategies will be varied and ongoing; there will be costs associated with all of your marketing activities. Mix and match your promotional activities both online and offline so that you are attracting the right audience to your real estate business. Understand the marketing solutions that you will need to apply to promote your business and the individual people within it.
- COMPETITION PRESSURE: Check out the competition in the local area and undertake a swot analysis in each case. Look for the strengths and weaknesses in your business and compare those factors to your competitors. What will be your competitive advantage as a real estate brokerage? How will you resolve your weaknesses given the existence of other active and high profile agents locally? Your business and your activities will need to stand out with some real form of advantage locally.
- TOP QUALITY SERVICES: Determine the services that you should offer to the real estate community. Generally you should be working across office, industrial, and retail property. You should be providing specific services of sales, leasing, and property management. That being said, you will require special people for some of those tasks. Understand the special nature of the industry and employ the right people to work around you.
- LOCAL DEMOGRAPHICS AND PROJECTIONS: Do some projections associated with the local business community and the population changes expected over the next five years. A good commercial real estate business requires growth and opportunity evolving from the local population and the thriving business segments.
- SELECT YOUR BUSINESS CLIENTS: Understand the best business segments to work within and the company types to service. Local businesses will require property change for expansion, relocation, and development. You can be the agent of choice to service those requirements. Your marketing strategies should be focused and based accordingly.
- COMMISSION CALCULATIONS: Review the commission alternatives for the property type and the services to be offered. There may be certain regulations that apply to the charging of commission within each of the services offered.
- COMPARISONS OF FEES: Compare your commissions to that of your competitors. Understand where most of the commissions should come from both by location and service type. Focus your people and your business resources into the primary sources of commission opportunity. You may need a specific marketing plan and a business plan to support that process.
Review all of the resources at your disposal given these factors mentioned. If you are part of a larger real estate brand or franchise structure, then there will be certain resources at your disposal to be matched to the opportunities and the strengths of the market. Integrate those resources across your market segments and business territory. Focus all of your efforts as a brokerage and as a team.