Climate Change: Adjust your business strategies to succeed in the shifting market

August 20, 2012 

Today’s economic climate for commercial real estate in San Diego is a lot like the weather: somewhat predictable patterns punctuated by terrifying, seemingly random chaos. The acceleration of change due to technology and globalization has altered the foundation of business — the flow of information, goods, services, and capital — just as global weather patterns have altered local forecasts in cities around the world.

 

And like the weather, the new business patterns will never revert back to previous “good” times. For now, the U.S. economic engine continues to sputter along.  

The trick is to figure out how to keep your business from merely sputtering along — how to put it on the track to positive growth. 

The answer is to look at what you’re currently doing — and change. You must adapt and focus on the things you can change — strategies within your business model — instead of the things you can’t — like the weather. 

These tips from CCIMs and business experts will help to re-invigorate your approach. 

Think Like an Entrepreneur

“Tomorrow’s real estate firms are start-ups, not legacy re-dos. Ideas are today’s capital that become realized in the hands of insightful leaders and motivated talent,” says Christopher Lee, president and chief executive officer of national real estate consulting firm CEL & Associates. In other words: Forget the past regarding commercial real estate in San Diego and focus on today’s opportunities, which are the ones right in front of you.

 For example, Daniel G. Zelonker, CCIM, broker with Mizarch Realty in Miami, has had success with South and Central American buyers who are flooding the Miami condo market. “Four of the last five contracts have been with South Americans,” he says. He has started traveling to other countries to find new clients. “Recently I picked up a Chinese grocery group,” he says. To help further his prospects with international clients, he’s using Rosetta Stone to learn new languages. 

Zelonker is also working on bank-owned assets through a relationship with community banks. Other CCIMs report success working with real estate-owned properties and bank notes. “We’re growing, even adding administrative staff,” says Mathew K. Marshall, CCIM, principal in Landbridge Commercial Properties in Tyler, Texas. “We’re putting together equity and buying REO developments and buildings.” 

An entrepreneurial attitude requires moving beyond your comfort zone, in order to assess current and future opportunities in San Diego commercial real estate leasing. “Our company was created with an easier, faster, cheaper, and better-results mentality from the beginning,” says Gregory Fitzgerald, CCIM, president of Tri-Oak Consulting Group in Canton, Ga. “This is how 21st-century companies are surviving and thriving.” 

Determine What Drives New Business

“New clients come from other brokers or current and former clients who are satisfied with our service,” says Jody Jedele, CCIM, broker/owner of Touchstone International Properties/Tierra Bella Realty in Charlotte, N.C. “So really, good service is what grows the business.” 

But what defines good service today? The only way to find out is to ask your clients. What did you do right? What set you apart from your competitors? What could you do better? Track, compile, and discuss this information with your staff. 

Finding out what you could do better may lead to a new service offering. For example, do deals falter because clients can’t get financing? Consider establishing a strong alliance or partnership with a capital provider that may facilitate deals for your clients. 

What sets you apart from the competition is most likely your company’s story, your brand, or your value proposition — and it may have changed in the past few years. For example, Fitzgerald redefined his top three target markets, “based on the profile of clients who have transacted with us in the past 24 months.” 

And don’t overlook the changes your clients also have made in the recent years. Many once-aggressive property investors are now seeking value-add acquisitions. Tenants, such as a large law firm formerly wedded to class A space, now may be leaner and meaner and looking for trendier loft digs to impress younger clients. Recognize that other business cultures have changed; capitalize on that change to thrive in an uncertain market in commercial real estate in San Diego.

Expand Relationships

“We’re not the only ones spooked by an uncertain future,” says Ron L. Opfer, CCIM, CIPS, with Coldwell Banker Premier Realty in Henderson, Nev. Many clients and investors have been in a free fall for the past few years, not knowing what direction to turn. 

“All of our strategies today involve person-to-person relationship building with clients: reassuring them that we are knowledgeable, experienced, and the absolute best option,” he says. “In some cases, we have dropped the PowerPoint presentations and gone back to old-school flip charts,” he says, pointing out the value of customizing your approach to your clients’ needs. 

Opfer also takes his whole team to meet with clients. “We take the time to demonstrate strength in numbers to clients.” Opfer and Jedele both recommend holding more face-to-face internal team meetings to strategize as well. “Spending the time to actually talk with other brokers and staff also saves time. Technology can help, but the personal attention to important matters also is needed,” Jedele says. 

The increasing reliance on technology for communication makes the need for personal interaction even greater. A recent Cisco study revealed that 82 percent of business leaders felt they were better understood after in-person meetings, and that in-person meetings were critical for building relationships, resolving major problems more efficiently, and creating an opportunity quickly. While email, Web conferencing, and Skype conversations save time and money, certain aspects of communication just don’t cross the tech divide: body language, tone of voice, and the total attention of participants. 

Industry-wide, the shift is toward a more relationship-based approach to commercial real estate, Lee says. “Real estate firms … will define themselves by the quality of advice given and the relationships formed instead of the number of deals done, properties developed, or square feet managed,” he writes in Transformational Leadership in the New Age of Real Estate. 

In such an environment in San Diego commercial real estate leasing, face-to-face skills are paramount. Does your company know how to communicate in person with your clients? Can team members who have grown up with cell phones and text messages reach across generations? Are all clients treated like clients or do staff members differentiate among different types of clients? The needs of a lender with REO properties may be quite different than those of a private investor or an institutional client. The more you know and understand about your clients, the stronger relationships you can build. 

Aim for What Is Achievable

Regular planning and assessing is how organizations stay flexible and prepared for opportunities. Fitzgerald’s company maps out both 10-year and two-year strategic objectives, and then “defines, measures, and reviews both tangible and intangible indicators of progress on a quarterly basis.” 

Lee recommends 100-day action plans, which is a quarterly roadmap that can be measured and fine-tuned for each succeeding quarter. While long-term strategic plans are useful, he says, 51 percent never survive the first year and 26 percent never make it through year two, according to a CEL & Associates survey. 

David H. Johnson, CCIM, managing principal of Mohr Partners, a tenant representation firm in Denver, says his company forecasts out about 18 months to 24 months, as a result of the clients and projects they are working with. Client prospecting and selection is very strategic: “Each client and assignment should validate our agreed-upon focused approach to client development,” he explains. 

“How do we ultimately earn more money in the same amount of working hours? That’s the fundamental question,” Johnson says. As a result, “We are a very flat organization filled with professionals comfortable with multitasking. We focus on clients, workflow, and improved client deliverables. Everyone is accountable for client generation and execution, and we keep it fun — not life and death.” 

Both Opfer and Jedele strategize to be ready for opportunity. While Opfer’s company has been representing banks in REO deals since 2008, “our attention is now shifting toward tenant representation, owner/user ground-up projects, and new businesses coming to Las Vegas. We see things moving from a recession-based investment/growth strategies to recovery-based investment/growth strategies. We want to have the relationships in place when things shift.” 

But identifying opportunity is not enough, Jedele adds. Earmarking what internal changes are needed to handle potential new business in commercial real estate in San Diego is also essential. This might mean adding software or staff to handle a new service line. 

Use Technology Where It Counts

“Our time is best spent in the field with clients,” Opfer says. “Nevertheless, we need information to get the job done.” Having the information while with clients is what counts for many CCIMs today, which is why many companies are utilizing cloud-based services, such DropBox and Google Docs to store and transfer documents. Such third-party options allow users to access documents from any computer or mobile device such as a smartphone or iPad. “Internet-based software allows access from multiple locations by multiple team members,” says Jedele. But along with technology, “you need procedures in place, so everyone knows what to do, reducing time spent duplicating efforts.” 

Other ways to make technology work include mandating a customer relationship management program for the entire office, instead of each person using their own system or program, which is what Mohr Partners has done. “We’ve agreed to go through some short-term implementation pains to achieve more revenue and process improvement,” Johnson says. 

Create Business Rituals

“The best way to ensure you’ll take on difficult tasks is to build rituals — specific, inviolable times at which you do them,” says Harvard Business Review contributor Tony Schwartz, author of Be Excellent at Anything. People never forget to brush their teeth, because they don’t have to think about it, he says. 

Put a process in place for San Diego commercial real estate leasing and use it religiously, as Mark D. Bratton, CCIM, vice president of Colliers Monroe Friedlander in Honolulu, has done: “Before dinner, I organize for the next day and that allows me to be on the phone prospecting for business every morning. In the afternoons I do my administrative work. Then, I start over again.” 

Source: CCIM

 

DISCLAIMER: This blog has been curated from an alternate source and is designed for informational purposes to highlight the commercial real estate market. It solely represents the opinion of the specific blogger and does not necessarily represent the opinion of Pacific Coast Commercial.