In our previous post, “3 Old School Tactics For the Arsenal of Modern CRE Tools,” we talked about characteristics of a successful agent that transcend the philosophical chasm between Millennials and Boomers. Now, let’s look at their approach to business.
At its core, brokerage is a grassroots business. We can take advantage of every high-tech tool on the market, but ultimately, commercial real estate is a business of human networking and connections. This inescapable duality of our industry means that abandoning traditional methods in a full-court press to harness Big Data and be Modern Brokers isn’t an automatic guarantee of success.
Most brokers agree, we’re looking at a paradigm shift in the industry. Technology is bringing profound changes to commercial real estate. But it doesn’t mean everything that came before is obsolete. In fact, time-tested methods, enhanced by the data-rich tools at our fingertips, have the potential to yield the best results of all.
Ultimately, success in commercial real estate comes down to what you know and how you leverage that knowledge. Veteran San Francisco broker Cal Nakanishi views it as a process, transforming intellectual property into prosperity. “This is the essential foundation of credibility in the brokerage world, whether you’re talking to prospective clients or industry colleagues,” he said.
“Brokerage is a huge business and the best way to establish yourself is to choose a single path and stick with it. Learn all the ins-and-outs. Find your niche and become an expert, don’t flounder,” he added. If you’re tired of constantly chasing deals, you need to create a business plan, build a foundation of first-hand knowledge in every aspect of your target market and actively use that knowledge to build a competitive advantage.
Agents distinguish themselves by the quality of the information and analysis they provide. “Always know more about a building than your client does. If there’s something you don’t know, be honest about it. Do the research, find the answer and deliver it to them,” Cal said. It’s easy to think you’ll have broader opportunities as a generalist, but people gravitate to expertise. Take a slice of the market and immerse yourself in it, find out everything you can about it. There’s no substitute for true expertise.
On the flip-side, there’s one important caveat to this rule, Cal notes. Never try to make yourself seem bigger than you are. “Reputations are everything in this business and they follow you everywhere,” he said. This is one area where there’s little to be gained from the Fake-it-Till-You-Make-it approach.
Once you identify your particular market segment, study every submarket in the region. Become conversant in the nuances. “You want to be able to speak to your clients confidently, even if the conversation strays beyond the scope of the transaction at hand.” Your goal is to be able to provide context and help your client see more than just what opportunities are available, but also why and how each one matters to the success of their business.
These same rules apply to the task of expanding your business. Utilize the perks of being an agent in a brokerage firm. Get comps for buildings, then cold call all the tenants. Get to know who they are and what they need. Learn everything you can about their building. Then package it all up and offer them a detailed report. They may not need your services at that moment, but keep following up. Give them a call every few months. They’ll think of you when they need representation.
BTI (Before the Internet), commercial real estate professionals worked their business the old-fashioned way, with reams of forms filled out in triplicate on an IBM Selectric and telephones wired to the office wall. (We’ll pause for a moment of silence while the Millennials roll their eyes.) Despite the lack of modern tools and technology, those brokers acquired clients, transacted business and built incredible networks that have thrived for decades. So before you dismiss them as dinosaurs, consider how well some of their old-school philosophies hold up in #CRE today.
1. Under promise. Over deliver.
It’s easy to get caught up in a moment, or misjudge the time required to complete a task, and promise a client or colleague something on a deadline you have ZERO chance of meeting. Don’t. do. it. Train yourself to take a breath, weigh the resources and requirements, and always be realistic in estimating what you can deliver and when. You’ll feel heroic saying you can turn something around in 24 hours, but if you fail, the cost is high. The loss of credibility is not always visible and inevitably weighty. On the other hand, if say you’ll get back to someone in 3 days and do it in 2, you have the potential to score a few well-earned bonus points.
2. Be 100% ethical and credible.
Don’t cut corners. Whatever short term benefit you derive will be far outweighed by the damage you do to your professional reputation. In this industry, the impression you leave with clients and colleagues spreads like wildfire. The best way to safeguard that perception is to value ethics and credibility.
In the words of TRI President Tom Martindale, a veteran industrial and office leasing agent in San Francisco’s SOMA district, “If you’re 100% ethical and credible with your clients, colleagues and competitors, you become the guy everyone wants to do a deal with,” If you’ve built a great reputation in the brokerage community, people see you as a trusted adversary, so you get better info and become more successful.”
3. Remember you’re the agent not the principal.
When you’re in the middle of negotiation, it can be difficult to know whether the agent on the other side of the table has cleared every detail with their client. Miscommunication can happen, but if a slip-up is the result of someone promoting their personal agenda over professional responsibility, then credibility and trust can be damaged. As an agent, your job is to advocate for the client. Whether you might have done things differently, it’s your job to adhere to their wishes. Remember, you’re the agent, not the principal.