It has to be the number one question you get as a commercial real estate professional, “How is the market?” Most of the time folks are asking simply to spur a conversation; however, sometimes those inquiring really want to know. If you are like the average responder, you will use one worded answers such as “OK” or “fine” or really explain the market by saying, “It could be better”. Generally, those that answer as such are either too naïve to truly understand what is going on in the market or worse, under the false impression that they can’t control any market factor.
In today’s video, I will share with you which market factors you can control. And the next time you are asked about the market, your initial answer will be “Couldn’t be better”, regardless of external market conditions.
People want to associate with people who are successful and knowledgeable. When asked how the market is, smile, straighten up a bit more, tell them you are busy and things are going well. Then start to ask them questions questions to understand what part of the “market” they are interested in. Don’t assume. They may want to know about the industrial sector when you are thinking about the retail sector. They may be thinking nationally and you are focused locally.
If you focus on selling investments, avoid quoting CAP rates but talk about the various ways investors are valuing real estate including CAP rates, Cash on Cash Returns, IRR, price per square foot and up-side/redevelopment potential. Slip into the conversation how big your investor database is and how you reach investors on an international basis.
If you focus on leasing, avoid talking about lease rates and concessions as every property has it’s own characteristics.
Most importantly, be confident, be an expert on understanding how real estate is valued and appear successful. Always look them in the eyes when talking and listen more than talk…..if possible.
Everyone assumes they can control what happens. The fact is that you cannot control everything however you can control how you respond to things. Our response to things outside our control is our power to make a difference.