EXECUTIVE SUMMARY
At its simplest, adding value in Commercial Real Estate, CRE, means positioning a property such that a private, corporate, or institutional investor or trader can achieve their goals for maximized returns with limited risk. That goes for both sellers and buyers.
The commercial real estate broker/agent who can deliver on this premise commits to a series of steps that result in the best transaction for their client. For instance, a commercial real estate brokerage representing the seller will prepare a property so it has the best chance of garnering the highest sales price relative to comparable properties on the market at the time. The CREM Group represents commercial real estate investors in Southern California’s Los Angeles and Orange Counties in the pre-sale environment, but also in the all-important post-sale timeframe with their commercial real estate services.
NINE STEPS TO ADDING VALUE
In any sales cycle for any product, the most critical skill is good communication, upon which many long-term sales relationships rely. However, an often-overlooked value-add in commercial real estate comes from post-sales services. While post-sales activities don’t “pencil” for some companies, this single differentiation may mean the difference between a good commercial real estate sales experience and a great one. The CREM Group believes pre- and post-sales actions add value for their clients.
Each step for enhancing value is significant.
Step 1. Discovering What the Client Needs. Before anything else happens, the first step is finding out exactly what the investor needs. What kind(s) of property are they looking to buy or sell? What are their cash flow requirements? How long do they want to hold the property? How quickly must they discharge their undeveloped parcel, shopping mall, or apartment building? Is this their first or their fiftieth commercial real estate transaction? It’s not safe to make assumptions.
Step 2. Understanding What Investors Want in a CRE Broker. Asking specific questions frames the relationship at the front end. What will help the investor the most? Do they need help in marketing? Do they require a broker with deep experience in the geography, or is the industry more important? Retail or apartment buildings? Industrial manufacturing or storage and distribution? Do they need a broker with lots of “connections”?
Step 3. Doing Market Research. Both parties are accountable here. Has the commercial real estate agent done theirs? Are the clients professional investors, and have they done their investigation? Even so, do they need help in a new geographical location or an untried industry they’re looking to penetrate and add to their portfolio? The Los Angeles commercial real estate market differs not only from the rest of the country but also from Northern California. A commercial real estate brokerage like The CREM Group with a long history in the marketplace is invaluable. What was true last year can be untrue today. Knowing trends and understanding both the local and world forces at play helps ensure accuracy as the commercial real estate brokerage seeks to value properties for sales or purchases correctly.
Step 4. Shaping a Focused Marketing Strategy. Agents and marketers decide where the property should be promoted by corresponding research findings to market and client needs. Online? Yes, but exactly where? In trade journals? Which ones? Given the huge variety and massive dollars involved in many commercial real estate transactions, marketing for buyers and sellers must be carefully crafted. The choices include but are not limited to direct mail campaigns, print and electronic advertising, and in-person networking across the CRE global and local marketplaces, depending on the property and the countries and industries involved.
Step 5. Gleaning USPs from Market Analysis. The Unique Selling Proposition adds value to the business deal, increased by characteristics such as location and amenities, but also upon such items as redevelopment potential, operational income-generating opportunities, or simple resale possibilities.
Step 6. Crunching the Numbers, Assessing the Risks. There’s no substitute for that CRE firm that blasts through data with scary-good analytical chops. Providing multiple scenarios and sending detailed financial analyses and projections adds value, especially if the firm’s track record supports the extra time it takes to do ROIs, cash flows, and risk analysis. Knowing what is happening in the financial markets and finding elegant solutions to inelegant problems adds value on the front end. Being creative and open to pushing the envelope to close a mutually- pleasing deal is a superpower that increases value and trust.
STEP 7. Wearing a Tie. Not a real tie. Just a figurative tie that shows seriousness, respect, and commitment to the industry and everyone in it. The Commercial Real Estate industry in the United States has been under pressure ever since the pandemic. Interest rates have risen (see our blog on the effect of high interest rates on Commercial Real Estate), and CEOs around the world question the stability of their markets and the soundness of their decisions. The CREM Group insists on QUALITY & TRUST in all their dealings—including Commercial Real Estate.
Step 8. Positioning Property Properly. It’s like wearing a tie for the property. Well groomed. Clean. Everything is operating correctly an makes the property look appealing, i.e., lighting, landscaping, staging, plowing, fixing fences, painting, etc. It is being aware that (first) impressions matter.
Step 9. Offering Post-Sale Support: Everyone is in a hurry these days. With The CREM Group, their services do not end with a purchase or sale. Some of their services post-sale include landlord representation and professional management services.
CONCLUSION
Adding value in commercial real estate, whether in Orange and Los Angeles Counties in the Western U.S. or on the other side of the world—best practices revolve around sound communication, a commitment to excellence, and hard work. The post-pandemic economy is not the only worry for CEOs in this industry. Cyber security and world trade interruptions leave investors unsettled for numerous reasons. Finding an exceptional, dependable CRE brokerage like The CREM Group mitigates anxiety.
For information about the company, visit their website and see their recent posts on LinkedIn.
What is the best practice for adding value if you’re looking for a Los Angeles commercial real estate broker or an Orange County commercial real estate broker in Southern California? Consider The CREM Group for an excellent first stop. Here are some of their recent commercial real estate transactions.
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