There is a tremendous amount of competition in the real estate market when it comes to leasing and management assignments.
“Most large institutional investors feel compelled to hire a large national management and leasing company to oversee their expensive assets, as they often equate size with capability,” says Gary Dahse, senior vice president of New Business Development at Moody Rambin Interests.
“When the larger real estate firms do not deliver the creative high-powered marketing results they promised, it can position your local company to slide in and solve the occupancy problems the ‘second’ time around.”
According to Dahse, being first is not always best. When a real estate company is competing for major leasing and management assignments from large national and international real estate investors, it’s sometimes better to come in “second.”
Therefore, he says, if a real estate firm can provide unique and creative approaches to solving marketing problems, they will be able to reap the benefits and outpace the larger national firms. Then, not only will they be able to lease the toughest assignments in the city when other larger firms miss the mark, they will also be given an opportunity to turn around any problem property suffering from low occupancy, regardless if it’s the largest building in the city or an abandoned shopping mall.
Smart Business spoke with Dahse about occupancy problems, unique solutions to those problems, and how a Houston-based real estate firm can turn “second” chances into first-place endeavors.
What occupancy problems are real estate companies currently facing?
For one, banks and other lending institutions are tightening their lending standards, causing a scale back in debt exposure and financing. This has made it difficult to buy and sell commercial real estate due to a lack of debt financing. Also, rental rates have fallen and vacancies have increased. A troubled economy, decreasing oil prices and a global recession have also caused occupancy problems for owners of all real estate types.
Lenders are now valuing properties by looking at current earnings, as opposed to before when they looked at market appreciation and future rents.
What are some unique ways to combat occupancy problems?
One fairly simple way is to create more distinctive leasing signs for properties. Often, when you drive by a building, you don’t have the time to read an entire leasing sign. If you’re lucky, you’ll capture the phone number to call for leasing information. To combat this, create a leasing sign that you can read in your rearview mirror just as easily as looking straight at it from the front in other words, the lettering is reversed, like when you look at an ambulance in your rearview mirror. This will ensure that passers-by have every opportunity to read your sign, which is important, since no matter how visible the property is, it’s not going to lease unless people know it’s for lease.
Another way to make people aware of properties is to host cocktail or dinner events at the site. If you have a great property or a converted location filled with phenomenal interior improvements, make sure the city’s top tenant rep brokers are aware of the property and the improvements the investor has made. Invite the brokers to a cocktail party at the location, or better yet, invite them to a local hotel or venue, then escort them in limousines to the property for an unannounced, impromptu party. This will bring the brokers to the location, enticing them to sell it. You could also offer incentives to the brokers, for example, they could win a car by bringing a two-floor tenant to the building.
It’s also a good idea to partner with local dignitaries, forming relationships that enhance your brand on both national and international levels. For instance, you could team with local professors or economists to produce a newsletter that discusses timely economic issues.
How can you prove to prospective clients that working with a trusted real estate professional is the best route to take?
When companies work hand-in-hand with local real estate professionals, they get the experience, market knowledge and core competencies of those professionals. Also, real estate professionals have access to research, benchmarking trends, specialized advice and local support.
Real estate professionals have to position their company as a team of trusted advisers that will identify industry trends and find custom fit solutions that will meet any client’s specific needs. If they take the time to understand their clients’ businesses, strategies and goals, they’ll gain trust in the marketplace and will be in position to lease or sell any property, anywhere.
Gary Dahse is the senior vice president of New Business Development at Moody Rambin Interests. Reach him at (713) 773-5596 or email@example.com.