November 23, 2020
Did you know there’s over two hundred thousand real estate agents and 95,000 brokers in California? But all of them are not successful. Success in commercial real estate is not so easy and not so hard.
I am very fortunate to have worked with one of the most active commercial real estate teams in the U.S. for the past two years, the Newmark Private Capital Group, also known as Data to Deals.
This experience has given me access to professionals who go about their days differently and who each possess attributes that make them uniquely great.
To professionals considering a career in commercial real estate, the three rules discussed here in are ones that will allow you to separate yourself amongst the competition and not only survive, but thrive in a profession where most people leave the industry within a year.
With so many brokers trying to meet expectations and grow their business, naturally some will do or say anything to get a deal done.
The best brokers always speak on the market to the best of their ability while being transparent, and share both the upside and the downside in a transaction.
Rarely is a deal a complete home run and without maintaining honesty, clients will immediately disqualify you.
Another aspect of honesty is how a great broker underwrites a deal. A great broker will always depict the history, the current expenses, and the future outlook of a property in its truest form without hiding information.
This includes everything from forecasting lease rates, operating expenses, and upcoming capital improvements that ultimately determine the future yield of a deal.
They may underwrite and forecast the best outcome for an investor who acquires a property, but they’ll never forecast an unrealistic scenario.
In a tight market where twenty-five basis points can mean all the difference to an investor, brokers are often tempted to falsely represent how the property is truly performing.
If you are one of these brokers, you will get caught, investors that $25mm properties are incredibly smart.
Whether you’re working on one deal at a time, or fifty, staying organized is a critical piece of getting deals across the finish line, generating new business, and ensuring that no part of a transaction is overlooked.
One of the great ways our team stays organized is by having bi-weekly pipeline meetings. Every Monday our team sits down and discusses imperative tasks that each of us must accomplish for the week.
Then we discuss ways to promote our team, how we are generating new business, and assess our individual goals. By having a set time where all of our teams are gathered in a meeting, we ensure that the week gets off to the correct start and that our time is equally proportioned across all of our tasks.
Another aspect of organization is goal setting. Writing down your goals weekly is a great way to prioritize your tasks and to ensure that you’re growing.
I write my goals down every day, as soon as I get into the office, to ensure that I’m not wasting time on tasks that are not going to contribute to the overall success of the team or ultimately lead to a transaction.
From this point on, start your day by writing down the top three tasks that you must accomplish by day’s end, in order to move a transaction forward or to generate a new lead.
It has been proven that you are one and a half times more likely to accomplish your goals if you write them down as opposed to using an app, your phone,or an e-calendar.
My goals look as simple as reminding myself to email a client or as granular as reading a 50-page lease, cover to cover and abstracting the key points and terms.
Quite possibly the number one thing that determines your success as a broker is whether or not you’re willing to take action.
One of the simplest ways you can take action is by making cold calls to generate new business. I break cold calls down into two categories – informative cold calls and inquisitive cold calls.
Here are a few examples of informative cold calls that I like to make.
Calling one of your clients to tell them about a deal that fits their acquisition criteria, informing them of a new lease or a tenant in the market, or a recent sale that may affect the value of their property.
More broadly, if you just wanted to make an introduction, you can simply inform the client of what your team specializes in. If I’m making an introduction phone call to promote Data to Deals, it would sound something like this:
“Hey, this is Ryan Tetreault with Newmark, our team specializes in investment sales under $30mmdollars across the Western U.S. I wanted to make an introduction because I know you’re actively purchasing product within this criteria.”
Depending on the homework I do before making this call, I may alter the script, but you get the overall picture, it’s straight to the point. On the flip-side here’s a few examples of inquisitive cold calls.
Calling a property owner to see if they would entertain an offer on their building. Yes, this is very direct! Inquiring if they’re an active investor and what their buying criteria looks like, or inquiring about which markets and deal profiles they like. Are they a value-add, core, or distressed investor?
If I wanted to do a little more homework, I may inquire about a recently signed lease, or a loan that is coming due on the property. Both scenarios that typically lead to a potential sale.
We hear time and time again, but making cold calls is undeniably a great way to stay in touch with your clients and to generate new leads.
I personally aim for at least a quarter of my day to be dedicated to cold calling and property level research.
Stop asking for new business and start seeing how much value you can provide in your cold calls. By promoting yourself as a specialist as opposed to a salesperson, you immediately qualify yourself as a resource and a source of information to property owners who can trust you.
Honesty, organization and taking action are three areas where a broker must excel in order to generate new business and maintain their current pipeline.
Brokerage is the ultimate test of being an entrepreneur, and you must be well rounded in order to maintain longevity and to separate yourself amongst other professionals.
I hope that my three rules will help to propel your career in this ultra-competitive industry to new heights.
I must also thank my team that I work with on a daily basis, as many of the practices I have mentioned stem directly from their best habits.
I wish all of you tremendous success in your journey and look forward to finding out what’s going to take you to the top of commercial real estate.
Newmark Private Capital Group, also known as Data to Deals, is a Los Angeles-based commercial real estate team that specializes in $5to $25 million investment sales across the Western U.S.