Posted on May 26, 2012
I am a believer in the power of simplicity.
Or, to put it another way, complicating things doesn't make them any better or more efficient.
Today I am here to tell you what we do, how we do it, and why we find most industrial real estate agents hopeless. And of course how very simple it would be for them ( and you) to be very good.
Expedio owns and leases industrial property in South Auckland.
It's not complicated . We stick to what we know and work at keeping it simple. We own multipurpose buildings because they are the most multipurpose. If you have a box of a building there are more potential tenants than if the building is purpose built for a medical centre, a childcare centre, or a coolstore.
We own buildings up to 2000 metres because bigger than that, the potential pool of tenants diminishes rapidly. And we own buildings in South Auckland because if we have a roof leak our plumber is in South Auckland. And so are all our other tradespeople.
So we keep it simple.
As a part of being an industrial landlord we also buy and sell, we refurbish and very occasionally develop. But mainly we lease.
So, where do agents come in? Agents are our sales force.They sell and lease buildings for us. They bring buildings to us to buy.
We need agents. And we love paying commissions. When we are paying commissions it means we are doing deals. No commissions, No deals. And without deals we are not making money.
In South Auckland we have about 110 agents on our mailing list. 110 agents. Spread across a whole lot of agencies.
You know the names - Colliers, Bayleys, CBRE, Barfoot & Thompson, Action, Commercial , and lot more. Yet 5 agents do 95% of the deals we do.
That means we only do 2 or 3 deals a year with agents outside of the top 5
I am very glad you asked that question.
We do 95 % of our deals with the top 5 agents because they are very good. Rather than telling you what the 95% don't do, I can tell you what the top 5 do - that makes them the top 5.
It's not complicated. It's not difficult.
In fact it's so simple that it wouldn't take much effort for any one of you to be as good as those top 5.
Keep in mind that what I am talking about here is commercial and industrial real estate. I am not talking about running a restaurant. I am not talking about driving a truck. I am not talking about selling residential real estate. Those activities are totally different.
Commercial and Industrial Real Estate is different to residential. It's a business and it's about business.
There is far less emotion involved than in residential.
And very often it is about repeat business. And a major part of business is about communication.
The 5% who know how to sell industrial real estate have several things in common.
They keep it simple. They do the basics right. It's as simple as that.
They understand the numbers
They know how to qualify
They understand the business
Let's start with LISTEN.
Any agent who comes to us, we tell him or her why we work in South Auckland. So then I know that if that agent then presents an opportunity in Rosebank, I know that they haven't listened.
As Buddha said "how you do one thing is how you do everything"
So I know that if they haven't listened to the "we work in South Auckland" part, they didn't listen to anything else.
That doesn't mean that they won't try and pitch an idea to me that is a little outside my comfort zone.
I have had agents bring me ideas well outside of what we usually do. If it is a well constructed and well thought out idea, I'll Listen. And sometimes I am convinced.
Which leads me to the second things successful agents do - they COMMUNICATE !
They tell their clients what is going on.
In this age of instant communication this task is so easy. Use email, txt, I.M. or even the phone. But keep people informed.
How simple is it to send an email saying " I took Mr X through your building. He told me he needed 500 metres but be really needs 700m, so we'll keep looking."
Takes about 30 seconds to keep your client informed.
So why do 95% of agents not do it ?
# 3 on the list of skills of competent agents : UNDERSTAND THE NUMBERS
Industrial / Commercial real estate is a business. Business is about numbers.
Some of you will have been in residential real estate in the past. Some of you may have been dentists. Or even Chefs. Very Nice.
And all about as irrelevant as each other.
A substantial portion of residential real estate is about emotion and ego.
Commercial / Industrial is about numbers - and even more so with your prime customers - professional investors.
I am not here to teach you what those numbers are. Quite frankly you shouldn't be here if you don't know.
Just make sure you know all the numbers for any property you are trying to pitch:
And the rest
What I will tell you about numbers is that the quickest way to oblivion is trying to mislead !
You will be exposed. And you won't last. So it's plain dumb to try.
The 2 lies most commonly told are :
# 4 Agents need to know HOW TO QUALIFY
We each have only a limited time on this earth. It may be a little more than the biblical 3 score years and ten. Or it may be a little less. Either way, I don't want to waste the limited time I have on fruitless endeavours.
And I see far too many agents wasting far too much time needlessly. With a little time spent qualifying, they could have saved significant time and energy.
Spend a little time finding out what your client really needs before showing them buildings.
Show and tell is for kindergarten.
What you really need is to ascertain before you start what your client really needs.
Asking a few pertinent questions will save a lot of time and fuel.
The 5th attribute superior agents have is that they UNDERSTAND THE BUSINESS. They have taken the time to understand the elements that go into decision making in commercial / industrial real estate, and the drivers for those decisions. And they will constantly be thinking about the factors that will change the industry in the future.
It's not complicated.
It's not difficult.
In fact it's pretty simple to be as good as the top 5 agents.
Most of all - you don't have to work for Colliers, or Bayleys, or any particular brand.
You just need:
You will note that I have not talked about any "old fashioned" attributes. Things like courtesy and timeliness. I take it for granted that you will possess these.