Preparing for Tomorrow’s Sales Today

In the world of commercial real estate, there is a significant amount of work to be done before seeing a return on your investment.  With that in mind, it’s easy to see the importance of prospecting for commercial real estate agents.  It may seem difficult when you are deeply involved in one project to take time away in order to plan for future commercial real estate endeavors but the wise commercial agent knows to always keep one eye aimed towards the future.

In general, it takes at least three months time between scouting out properties and being able to list them.  Taking the time to prospect for new business today will ensure that you are still in business next quarter.  Not only that prospecting is a way of keep your face out in the local business community.  Networking is an essential aspect of commercial development.  You don’t want your contacts to forget about you while you are immersed in another project.

Just because the people that you are talking with are not interested in investing in a property today doesn’t mean that they will not be interested in the future, and because you put yourself out there to discuss potential investments with them they will come and find you when they are ready.  Making a habit of getting out and touching base with the same people every 90 days or so will let them know that you are interested in working with them and that you have the professionalism and the tenacity to get the job done.

Talking with business owners will put you on the inside track for potential opportunities in the area.  People in business tend to notice things about their neighbors and competition that will be valuable to you as a realtor.  On the same token, if you see a property has a sign up from one of your competitors don’t be afraid to approach their neighboring properties.  One person’s motivation to sell their property often prompts a chain reaction among the surrounding properties and they typically look for competing agents to sell for them.

Commercial real estate is a huge investment. How can you be sure that you are picking a good location for your business?

A Beginners Guide to Commercial Real Estate

Developing commercial real estate is an intense, time consuming endeavor.  In order to ensure that you are making a smart investment you should have a vision for the types of business you want to house, and a basic idea of the sort of building you want to be in, whether it be an office park, a warehouse or a retail center.  It may be helpful to take a class on property management before you begin so that you will have a firm grasp on all of the options available to you.

Once you have made these determinations the next step is to investigate areas where you could potentially build.  There are trade journals and real estate professionals that will give you a basic idea of which areas are in demand.  But before investing any money in any location it would be to your advantage to visit the area and speak to the people that frequent the area and those that are already conducting business there.  These people will give you the most accurate appraisal of an area and will have the insight to comment on areas of business that you might not think to ask about such as accessibility, troubles with the power grid, upcoming construction projects and things of this nature.

Once you have found a location that you feel comfortable with and have assured that it’s zoned for the kind of commercial activity your business requires its time to secure financing.  Typically financing comes from one of two areas, either a business loan or through investors.  It’s not uncommon to finance your business through a combination of the two.

Once the land is purchased you can begin working with an architect and start locating a contractor to carry out the plans.  It will be to your advantage to request in advance weekly and monthly progress reports so that you are kept in the loop as to how the project is going.  Once the building is complete and approved by a building inspector you can begin meeting with potential tenants looking to set up shop in your development.

Commercial Real Estate Tips for Newbies

Commercial real estate is a tough business, and knowing the pitfalls from the onset can save you both time and money on the front end.  As the market is leveling off and many cities are still reeling from the economic crisis that hit our country a few years ago, it has become increasingly important to know what you’re doing before you dive into the commercial real estate market.  

1.       Be patient

There’s a reason this tip is number 1.  Being patient and taking your time to do the research needed on a particular property will mean the difference between your success or failure as a real estate broker.  Commercial properties are different than residential properties in many ways, including the time it takes for these properties to be purchased, renovated, or sold.  Getting impatient will likely result in a bad deal. 

2.       Spend a lot of time on the front end

Commercial properties will take a lot of time to screen and work out deals on.  Of course there is a learning curve and you will get better at it over time, but it is extremely important that you take a lot of time on the front end to do your due diligence in research.  Research everything: the area, the history, future planning/zoning, demographics, etc.  

3.       Build the right relationships

As with residential real estate, building a network within commercial real estate is crucial if you want to get the best deals on the best properties.  This network that you build for yourself will make all the difference.  Many properties aren’t listed before they are sold, so if you put the word out in your network about exactly what you’re looking for, chances are that someone will fill you in on property details that you wouldn’t have found through traditional methods. 

Commercial real estate is a tough business. What tips can you give to new Commercial Real Estate agents?

The Top Cities Showing Commercial Real Estate Growth

The Emerging Trends in Real Estate report released in 2012 by PwC US and the Urban Land Institute (ULI) showed that the best growth that can be expected to occur this year in commercial real estate will be largely confined the urban areas that are “24-hour” cities, with multiple transportation hubs and global access from these hubs.   

The continuing economic slump and the slowed job growth rate continues to bog the real estate markets down, and consumer spending is keeping retailers conservative in their leasing and purchasing.  According to Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC, “Job creation is clearly the critical ingredient for a sustained recovery in commercial real estate and the market participants we surveyed uniformly struggled to identify new employment engines. As a result, businesses are focused on squeezing profitability out of productivity gains, and families forced into belt-tightening are using less square footage, which follows ‘The Era of Less’ sentiment we forecasted last year.” He continues to explain, “In 2012, investors expect pricing to level off in the top markets – and overall ‘buy’ sentiment will subside, selling appetites will increase, and more owners will hold until the economy untracks. This is part of 'the new normal' as investors are coming to grips that they may not be selling for more than they paid.”

What this means is that there will likely be an increase in properties for sale in most areas across the nation, but buyer demand will slow in many of them due to continued economic uncertainty until the market levels off.  The report, however, did list 10 cities to watch as the Top 10 for expected growth in the commercial real estate sector.  These include Washington, D.C.; Austin, TX; San Francisco, CA; New York City, NY; Boston, MA; Seattle, WA; San Jose, CA; Houston, TX; Los Angeles, CA; and San Diego, CA. 

Why You Should Have A Commercial Real Estate Broker?

In addition to saving you money and helping you find the property that is the best fit for you, a commercial real estate broker will provide several benefits that you simply wouldn’t have otherwise.  Below is a list of some of the top benefits to having a commercial real estate broker in your corner before signing a lease.

They know the area and key people within it.  A commercial real estate broker not only knows the area extensively, but is usually “networked in” to have access to some of the best deals first. 

They will work for you – not the owner.  When you go through the owner or seller’s representative or agent, that person will make every attempt to steer you toward their employer’s property, since that is what they are paid to do and that is where their commission lies.  When you hire a commercial real estate broker, he or she will be focused on matching you with a property that best fits your needs.  

They can disclose information to you that other agents can't.  When you go through the seller's or owner's agent, that agent might be instructed not to disclose certain information such as prior transaction data.  

They can help you avoid a conflict of interest.  Although a listing agent might agree to show you properties other than the ones they have listed, they would have a strong ulterior motive for steering you away from those properties because they wouldn’t get as large of a commission.

They can make the entire process less stressful.  Finding the right commercial real estate property is a stressful situation, especially considering the amount of time it takes to locate and view the properties that are available.  When you hire a commercial real estate broker, he or she will not only have experience and an established network within the industry – your broker will also be looking out for your best interest.