3 types of prospects that should be on your call list

man-suit-tie-phone-320x256.jpgThe value of your services as a commercial real estate broker lies largely in your relationships—and by extension, the database that keeps them organized. To make meaningful connections with the important people in your market, you have to know who they are, their portfolios, their networks, their past behavior, etc. You have to be an expert on your market and all the properties and people in play.

There is so much information to track, and while there are a lot of data services out there to help you get started, they’re all imperfect. You have to gather and maintain your own data if you want to succeed.

The good news is if you’re diligent about building your database and keeping it up to date, it can pay huge dividends.

For example, there are groups of people in your market that share certain characteristics. They require a similar communication plan, and so it makes sense to approach them systematically in the same way. And when you reach out at the right time with the right information, you look like the expert you are.

Here are three of the groups you should keep track of.

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Recent transactions

A property sale in commercial real estate is like lighting a beacon. Every broker who sees it is likely to try and take advantage of the event to build their business, and for good reason. Sellers now have the proceeds from the sale and a substantial tax incentive (1031 Exchange) to redeploy that capital quickly. An organization that has decided to sell an individual asset may be undertaking a portfolio disposition effort. Similarly, a buyer in these transactions may have a larger acquisition strategy.


Principals with near-term debt maturity

With the short-term nature of commercial mortgages, property owners with debts nearing full term are in a unique position. Action at that time is not just a good idea, it’s a must.

Savvy brokers know the properties, the owners and the debt terms—and catalog them for strategic outreach at the right time. Regardless of the situation, if the owner is at the end of the term, you need to be very intentional in targeting them.

If you work for a firm with a full-service capital markets group, you have a high probability of providing a solution to such owners. If your team is investment sales only, then focusing on owners who are more likely to sell than refinance should be your top priority.


Principals with debt greater than value

Whether due to a market downturn, a decrease in occupancy and thus net operating income (NOI), unrealized appreciation, or any combination thereof, refinancing can be very difficult if not impossible. Lenders won’t go near the asset as they don’t want to overextend themselves with a loan-to-value (LTV) that pushes their risk tolerance.

Owners of such properties should be at the top of your call list.

To track property value, debt, down payments and the like, be sure to be cataloging not only your closed deals, but the markets’ as well. When logging a comp, pay close attention to all the details and be diligent in entering everything of value.

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Topics: Best Practices Efficiency