Commercial Agents – Top 7 Tips for a Commercial or Retail Lease Analysis Today

When it comes to working as a commercial property agent, you frequently have to read leases to understand what is going on in the property with the tenant and or the landlord. Lease interpretation and analysis will generally occur at the time of property handover in property management, preparation for a sale, or preparation for a lease.

When you are involved with a larger property with a number of tenants in the tenancy mix, the analysis of the lease or leases gets more complicated. It pays to have some form of checklist to help you analyse tenancy and lease situations. You need to know the particular factors of each or lease that have impact on the compliance of the tenant and the landlord to the current occupancy. Dates and actions will be clearly defined in the lease document.

Why is it important?

The lease between a tenant and landlord will have significant impact on property usage, pricing strategies, and lease compliance. Top agents are quite familiar with reviewing and interpreting lease documentation prior to doing a sales pitch or presentation. The process would also be undertaken prior to any actions or decisions on the property.

Here are some tips to help you focus on the key points within the property lease documentation. These tips will get you to the key factors within the lease documents quickly. At a later stage you can go back through the leases to review them in greater detail and before any final decisions are made in the management, lease, or sale.

  1. Names of the parties and addresses for contact should comply with the facts as you currently know them, and the tenant in occupation. Look for any supplementary agreements such as deeds of assignment, or arrangements of sub leasing.
  2. The description of the premises should comply with current plans and drawings of the property. The tenant in occupation and the physical premises should all cross reference correctly to the occupation and the boundaries of the property.
  3. The permitted use of the premises will be detailed in the lease. Specifically that is the use that the premises can be put to by the tenant. The current use of the premises should comply with the permitted use as detailed in the lease.
  4. Term of lease will usually be a number of years. Make sure that the lease is not close to the expiry date; if it is, you will need to take immediate action on a future lease strategy.
  5. Rent review provisions and options for renewal all involve critical dates and particular actions. Ensure that the dates have been correctly implemented by both parties to the lease. Get copies of documentation and letters to signify any agreement between the parties.
  6. Rent and other lease charges to be paid should be understood. The rental may be one of a number of charges to be paid by the tenant. Look for the differences between gross and net rental, together with the outgoings to be paid by the tenant.
  7. Clauses and conditions relative to the landlord and tenant will apply in all leases. Some of those clauses and conditions are time critical and will require specific action by certain dates. In a property with a number of leases, you should expect that each lease will be unique and different to any other. That is why you really do need to read each lease comprehensively. Look for the differences and identify the critical dates.

These simple seven points will get you to the key factors of the leases quickly. At a later stage you should go through the leases comprehensively to pick out any other concerns or factors that can have impact on occupancy.

Commercial Agents – What Is Your Plan of Attack to Dominate Market Share?

Just about every commercial real estate agent I talk to wants to build market share, listings, and commissions. Belief is one thing, but action is a different thing that is sadly lacking in the industry. There are on average only 2 in every 10 agents that I would call highly systemized in their processes and successful as a result.

Many agents and salespeople make the mistake of approaching the industry with little planning and focus. They simply go to work every day and do things on a random basis. This is where the results become haphazard and are of little consequence to the growth of market share for the agent. Just about every office principal I know has this problem; they can’t find good people with the right focus and commitment to build a results profile in the local area.

To have a great plan of action as a commercial real estate agent the following will help you:

  1. Devote a key part of your day to the new business prospecting process. This should be the same time, so you can build a habit and strengthen the process. Remarkable as it seems, this is the most neglected part of the average salespersons diary. Failure to devote the right amount of time to this process will see average results and poor performance over the long term. Staggering averages of 8 in 10 agents fall into this range.
  2. This industry is built on relationships with landlords, property investors, business owners, tenants, and property developers. They all have their own priorities and points of focus. They require a special strategic approach in each and every case. The experience and market share you can give these people will help you connect with them and dominate their business.
  3. Given that you must talk to more people each and every day, it is important that you have relevance to your conversation and connection. Most property owners and business leaders are comfortable talking about local property trends and the supply and demand of premises. They also like to know about sales prices, rents, and time on market. You can help with all of these providing you keep in touch with the aspects and trends of market performance.
  4. Every individual salesperson should have access to a comprehensive database process. Unfortunately this is also one of those neglected processes in the industry. Many salespeople do not have the discipline to update the database daily following the contacts with clients and prospects.
  5. To dominate your local property market, the number of sale signs that you have through the region will be critical to market domination. When you place a sign on a property, it is critical to understand that the sign has been correctly placed and is well maintained. Vandalism and interference with real estate agents signs are quite common problems in most real estate markets. Signs that are not well maintained send the wrong message. Keep a list of the signs that are being placed in your local area including that of your competition. You can then use the list for comparing market share.
  6. Every single listing on your books should be comprehensively marketed, and as part of that process a signboard should be placed on the property. In saying this, any exclusive listings should be the priority in your marketing efforts. Vendor paid advertising should also be part of the exclusive listing process. Any open listings are what we call uncontrolled stock, given that the client can talk to many agents at the same time. Any open listings are therefore lower priority in your marketing efforts. Clients that list with you in this way are not committing to you as the agent of choice. You should therefore not commit to them as the client of priority.

Every real estate agent and salesperson should have a definite plan of attack as part of their daily activities. In only that way can you generate new opportunity and sustain relevant contacts with the right people.

Commercial Agents – Gain Time Using Personal Assistants

In a commercial real estate agency, your time is a critical part of your day. How you use your time will impact your listings and commissions. If you waste your time you lose money.

There are limits to what you can do as an individual salesperson. If you are fortunate to be able to attract good listings, you will still have limits on what you can do individually. You will need a personal assistant (PA). Over time a good PA can do a lot for you in backup and momentum.

Let’s look at the facts:

  • A good agent can only handle about 15 to 20 exclusive listings without stretching the limits of performance and client service.
  • Your clients are going to require ongoing contact every couple of days.
  • Your exclusive listings need to be marketed in different ways to the prospects that are coming in to the agency.
  • Your telephone prospecting should be bringing in the leads and requests for information and property inspections.
  • Every day you should be inspecting properties with qualified prospects.
  • Your database should be kept up to date personally
  • Deals need to be negotiated and documented.
  • You will be on the look out for more buyers and tenants

So how much spare time do you have? ‘Not much’ is the typical answer that I hear.

In saying all of this, one thing should be noted. Good salespeople are not good when it comes to staying on task and being organised. Under pressure things get missed or delayed. The end result is a missed opportunity or an unhappy client. So I go back to the point that a top agent should be supported by a good Personal Assistant.

Here are some things for the PA to do for you:

  1. Prepare draft advertising for approval of clients
  2. Constructing the campaigns for all your exclusive listings
  3. Lodging all listing marketing with the selected media
  4. Tracking responses from marketing campaigns
  5. Doing a signboard and internet count weekly of properties listed for sale or lease in your local area
  6. Tracking time on market with your competitors listings
  7. Preparing information packets to be sent out to qualified buyers and tenants
  8. Getting your newsletters ready for weekly despatch
  9. Doing your outbound direct mail
  10. Keeping your database under control and updated
  11. Checking your emails for ordinary issues that they can attend to for you

So how can you take the ‘quantum leap’ forward with a personal assistant? It all comes down to cost.

As you build your market and commissions, you can create a ‘financial buffer’ where you can employ a full or part time PA. The alternative up until that time is to use an online ‘virtual assistant’ to get some traction on the mundane things that just have to be done by someone. A ‘virtual assistant’ is a controllable cost and doesn’t need to be a large overhead for you.

Take a serious look at your workload now and see the best ways to free up your valuable time.