by Bob McComb
With the economy in “muddle through” mode and uncertainty in the residential real estate market, the following comment may surprise you:
This may be the best time to expand your business.
If that statement resonates with you and you’re looking for new opportunities, the best move you can make right now just might be to enter the world of commercial real estate.
Opportunities Exist … Even in Tough Times
It’s true that there’s no shortage of dire predictions about real estate from leading pundits, including several who expect further declines. That could mean agents will work harder under more-difficult circumstances. It’s also true that commercial investments have suffered as well, resulting in a significant commercial broker shakeout.
As with all boom/bust business cycles, as the frenzy of the upswing approached the market top, new players jumped in. They made some money and then were the first people to jump out on the downturn. Other seasoned commercial real estate agents decided that the abrupt halt in commercial transactions in 2007 was a good reason to retire.
Although there may be fewer commercial real estate agents, there are no fewer commercial properties to list, lease, or sell. Even in this challenging economy, growth is still positive and many businesses are in solid cash positions. Additionally, America is rich in intellectual and financial capital, a combination that fosters startups and entrepreneurial enterprises, opening the door to commercial real estate transactions.
Knowledge and Tools are No Longer Out of Reach
In the past, larger commercial real estate brokerages closely guarded industry knowledge, inventory information, and comparable market data. The ability to create top-quality marketing packages and economic analysis was only in the purview of mainstream commercial real estate agents.
Today, though, most barriers to entry into commercial real estate are gone. A number of Web sites make inventory accessible and available for marketing. You also have the capacity to quickly create property Web sites on par with any in the market. Commercial forms and contracts are available to you as well. In fact, all the infrastructure you need to be a commercial broker is now affordable and available.
Where to start
The three keys to getting started in commercial real estate are: 1) a combination of knowledge and skill, 2) the right tools, and 3) access to the clientele.
The knowledge is readily available to anyone willing to learn. Granted, there is much to study about commercial property types and the numbers used to assess properties and make decisions, so concentrated effort and commitment is required.
As with other types of real estate, commercial brokerage is a needs-fulfillment business. Therefore, you must have the aptitude to ask the right questions, know how the answers will affect transactions, and possess the skill to articulate action plans for your clients. Commercial brokers also must possess the market knowledge to serve their clients’ needs. This knowledge forms the basis of a commercial agent’s value proposition.
The tools needed for success in commercial real estate are affordable and easy to use. For example, economic analysis—previously performed with sophisticated handheld financial calculators that required tedious classes to master—can now be obtained by keying accurate information and assumptions into the right software, a skill anyone can develop. The same goes for creating sophisticated marketing packages.
More importantly, prospective clients are also available. Most homebuyers either work for a local business or own their own business. Many already own commercial property or would like to get started with commercial property investments. Given that involvement and interest in commercial real estate, your existing and past clients provide you a promising collection of prospects.
How to Find Clients
A key step to obtaining clientele is to ask your existing and previous residential real estate clients these questions:
• Do you own commercial property?
• Are you interested in commercial-property investments?
• Do you work for a company that owns or leases commercial property?
• Are you involved in the decision-making process for the business?
• Do you own a business? If yes, are you interested in new or additional locations?
These conversation starters will help you find people who may need your representation in a commercial transaction.
By making a commitment to learn the necessary skills and developing local market knowledge, you can use available tools to expand your business into the commercial arena. It may not be for everyone but with a little dedication and focus, the rewards are there and the opportune time is now.
Bob McComb, co-creator of the Top Dogs commercial real estate training programs (TDogs.com), is a Signature Series speaker for NAR Commercial and the author of several books on commercial real estate. You can reach him at firstname.lastname@example.org.
Marketing & Analytical Tools
google search for your local inventory