It’s obvious to all of us that commercial real estate is changing. Brokers are competing not just with each other, but also with new technology and self-service platforms. Clients aren’t just looking for partners with local or regional market knowledge—they want someone who understands the complexity of their individual needs, as well as relevant microtrends and pricing benchmarks. They want someone who can teach them something they can’t learn anywhere else.
Brokers need to define their unique value propositions more sharply, and one way to do this is to become a specialist or expert in a few carefully chosen property types that make sense for your geography and brokerage. And unless you operate in a very small market, this means going narrower than the usual idea of CRE specialization. You may already focus on office, industrial, retail, multi-family, net-lease, etc.—but there’s value in developing expertise and market positioning in more specific niches within these types.
These tips will help you choose the right area, gain the knowledge necessary to bring value to your prospects, and use this expertise to generate new business.
1. Identify the right specialties
Whether it’s a new concept like data storage centers, marijuana dispensaries or on-demand workspaces, or a growing vertical like senior housing, self-storage or healthcare, brokers are well advised to specialize in the property types that have the greatest growth potential in their markets.
When assessing potential focus areas, be sure to think long-term by factoring in demographic, legislative, and investment trends. For example, the Affordable Care Act had implications beyond just insurance. New payment structures that incentivize providers to keep patients out of the hospital for as long as possible, coupled with consumers’ increasing prioritization of convenience has caused many healthcare systems to decentralize their facilities and to open more urgent care clinics. Savvy commercial real estate brokers are capitalizing on this trend by scouting new types of spaces that can be adapted for healthcare use, and by branding themselves as experts in this field.
Additionally, think about your own interests and the makeup of your network and portfolio of closed business. Analyze your database to determine segments where you have the most relationships and comps or listings, and identify projects that have been particularly lucrative for you. When adding prospects to your database, include as much information as possible about their companies and their industries. This will help you identify patterns and sub-markets worth exploring further.
Research your competitors and their specialty areas. Try to identify under-represented submarkets. If a contingent of brokers has already built up years of knowledge and experience in a particular area, it might not be the best specialty to pursue.
2. Build your expertise and database, and put it to work for you
Becoming a trusted advisor in a specialty is all about discovering trends and insights, and then distilling them into actionable advice that helps your clients make or save money. To learn about your focus area and stay abreast of news, attend conferences, read trade publications, subscribe to newsletters, set Google Alerts to monitor the web for relevant news, and consider requesting informal meetings with thought leaders so you can better understand the market.
When it comes time to prepare a formal pitch or presentation, be sure to include the following areas:
Help your clients assess an area’s potential by providing relevant demographic information. This is particularly important when working with retail, hospitality, multifamily, and office clients who are considering a new location. Analyze data to determine if an end user market exists, or if there is evidence of a market forming.
Your clients will expect you to be the expert on such factors as pricing, rental rates, vacancy rates, and interest rates, but the key to providing real value lies in sharing insights that go beyond these numbers. Help clients draw conclusions from the research, share proprietary data whenever possible and use anecdotal evidence to personalize the pitch and showcase your experience.
You will need to show clients how a location is currently being used and how its use is changing. For example, the amount of open space in an area helps you communicate the opportunities for recreation space, and the building mix helps you demonstrate property demographics. Similarly, the total square footage of retail space helps you communicate the exchange of money and the opportunity to capitalize on it, and new developments help you define how the area is changing. Whenever possible, convey this information visually, with a custom map, for example.
Additionally, think about such factors as traffic, infrastructure changes, environmental issues, zoning and zoning overlays, and tax zones. Some of these factors will help make the case for the attractiveness of a potential opportunity, but others will work against you. Be open and candid. You are better off preemptively addressing negatives, because this shows clients that you understand their needs and position.
3. Market yourself as an expert
By identifying a focus area, you can prospect more efficiently and specifically. If you are using a CRM, try segmenting existing contacts by vertical and reaching out with a tailored message that showcases your experience. Be sure your social media presence and company bio reflect your specialties. Consider blogging about subject matters of interest to customers and prospects in your niche and offering to speak at industry events. Specialization also makes it easier to devise a plan for paid marketing, since you can focus on reaching a more precise target group.
Of course, you don’t want to miss out on other business opportunities. Specialization doesn’t have to be limiting. You can specialize in several different areas, especially if you operate in a secondary or tertiary market. The goal is to develop deep knowledge and connections that give you an advantage over other brokers.
By adding value through knowledge and data, you’ll stand out in this increasingly crowded and competitive space. You’ll also approach prospecting and marketing more effectively by focusing on target areas and customizing your approach accordingly.
About the author: Tanner McGraw serves as CEO of commercial real estate software provider Apto.
As an admirer of architecture, Canadian developer Sam Mizrahi knows that the great cities of…
It is said that with great risk comes great reward. All sorts of investments come…
Your real estate blog is one of the greatest marketing tools you have at your…