Final Expert Article
The Ups & Downs of Commercial Real Estate Brokerage
Unlocking Value
As a 21-year-old college student, I believe that I have been able to become an expert in a very complex component of the real estate world. More specifically, commercial real estate brokerage. Of all the hobbies, jobs, and extracurricular activities I have spent time on in my life. I believe that this is one that I seem to have grasped a lot better than the others.
As a young kid, I watched my father handle phone calls at the most inconvenient times just to satisfy a client's needs. I would go to his office, stamp his letters for his mailer campaigns, staple broker opinions of values, and see how hard you have to work. in the business. Since then, the brokerage world has changed, from AI implementations, to social media, to more access to specific data for brokers.
A way to think about the brokerage world for me is with two different sides. The buy/tenant side is the one in which you represent a buyer or tenant. or the sell/lease side. There are a variety of different ways to add value to either of these situations, but two of which are entirely different and require skill in order to succeed, and as always, it is extremely key to abide by what Bob Knakal, New York's biggest real estate broker since 200, says in the book Brokers Who Dominate. "Become a specialist in one particular area... Love the business and find a niche", is what his biggest suggestion is to all junior brokers.
The Seller/Lease Side:
In order to succeed on the sale and lease side, I have noticed that you need to be proactive in every possible aspect of the brokerage world, whether that is prospecting, knowing what other deals are trading for, or consistently maintaining and nurturing leads. In order to be a prospecting maestro, there needs to be three practices you consistently do to stay in front of your audience. Cold-calling, door-knocking, and letter mail campaigns or virtual marketing campaigns. Even though the world is evolving to live vicariously through anything social media. I choose to do mailer campaigns instead of marketing campaigns due to the audience that I am targeting. Almost all landlords or owners are not truly active on social media which is why I think it would be more valuable to send in person physical pieces of paper to an owners house letting them know about either updates or deals that we have done in the area. Cold-calling is my main source of generating business, I usually do a minimum of two hours of calls a day which is lower compared to some of my peers in the industry, but I am also busy balancing school work and classes with calling and working. Lastly, Door knocking or canvassing is what I use the least, but I have found that it may be the most effective with owner occupied prospects.
The key to all of these practices is to add value, from updating owners about the latest sale or lease to letting them know a general idea of where the market is at, to pointing them in the right direction as far as which vendor to use for a certain job or inconvenience. Any way to add value is a good approach to allow the prospect to receive info or services without directly signing a listing contract with them. So when that time comes for them to actually transact, they think of you and remember how you provided them with value. The process takes time for prospects to have an actual need to transact but it is worth it because they know you are coming from a place of help.
Pain points are a key thing to understand as well when it comes to landlords. Why would someone want to sell or list their property if they bought it 40 years ago and are paying a property tax on a $250,000 assessed value? Just like Caleb Richer says in the Forbes article, How Agents Can Add True Value To Commercial Real Estate Deals he says, "As a commercial real estate agent, it's not just your job, it's your duty to help your clients learn this difference". My job is to figure out what their triggers are and to help advise what the best path for their ownership would be at times. Some key triggers that I have grasped and dealt with immediately with some prospects are family troubles, legal troubles, financial help, or tenant and management inconveniences. All of these are what trigger a seller or owner to make a decision to list their property for lease or sale, which is why it is so essential to understand what your prospect's issues are and solve them accordingly.
Solving the problem is the final step in obtaining an exclusive listing agreement between the owner and yourself most of the time. Having a great offering memorandum to present to prospective buyers and their agents and an extensive marketing package with top-notch photography and in-depth analysis of the property itself and its location. This is just one part of doing your job to service your client. Once negotiations begin, it is key to filter out any prospective buyer or tenants to ensure the client has an adequate financial standing to fulfill his portion of the deal.
The Buy/Tenant Side
Even though this portion of the brokerage world is how I have sourced some of my deals, this is my less preferred side. I love to help out buyers or tenants, but being on this side of the transaction means you are competing with other buyers or tenants with more capital or standing in the field. As a buyer or tenant agent, the way you prospect would be the same triangle of prospecting methods, but how you provide value completely changes. John Highman, a fellow commercial real estate agent, said, "Get a prospecting model underway so you are finding at least 5 new people every day that you have never spoken to before". Ever since I read that, I genuinely believed there is no way to be successful in the business without consistently prospecting and being proactive like he suggested.
Clear To Close
This value could range anywhere from letting a buyer know you have something off-market and making sure they know that you are thinking about them and specific opportunities to letting prospective buyers know how much knowledge you have in the current market with rents and new developments. In the Forbes article, Three Essential Ways Realtors Provide Value in Today's Market, Joshua Cooley Says, "They know the area inside and out, and they’ve developed close relationships with a large network of vendors and lenders." As a buyer or tenant agent, most of the time you represent them, you lead them to the next step in their business or journey, which will help them evolve. If the buyer or tenant benefited from purchasing or moving into the property, they will likely be repeat clients since they correlate success with working with you.
These are some of the best practices that helped me once I started. Results do take time in the field, but it is all worth it once you close your first deal and everything else starts evolving into what will become your career in the brokerage world.
Santomassimo, Rod. “Bob Knakal.” Brokers Who Dominate, 2011, pp. 199–207.
Richter, Caleb. “Council Post: How Agents Can Add True Value to Commercial Real Estate Deals.” Forbes, Forbes Magazine, 13 Aug. 2024, www.forbes.com/councils/forbesbusinesscouncil/2023/09/07/how-agents-can-add-true-value-to-commercial-real-estate-deals/.
Aaron, I like the way you approached your draft. As a reader, it is easy to follow your detailed descriptions of real estate and gain your strong passion on the topic through your writing. But I also enjoyed that you can see the way your brain is processing working on your draft and being able to see the moving parts through your comments/highlights that you want to come back and make changes. Great job!
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