Someone in your commercial real estate database is ready to do a transaction right now. But who is it? There’s a certain degree of predictability to the leasing business, since landlord and tenant relationships have fixed lengths. As long as you have access to the rent roll, you should have a good idea of who will need you and when, but the situation is different if you are looking to identify potential sales clients. You can, however, use data that is readily available in the market to identify likely commercial real estate prospects.

[Tweet “You can use data that is readily available in the market to identify likely prospects.”]

4 market trends you can use to identify CRE prospects:

  • Dramatic shifts in occupancy levels.

    When a property has a meaningful shift in its occupancy for the better or for the worse, it frequently leads to a sale. When buildings fill up, many owners try to monetize their good fortune and sell the building at its new, higher value. On the other hand, buildings that empty out force owner that cannot afford the diminished cash flow to put them up for sale.

  • Loan balloons.

    While some owners constantly refinance their buildings, holding them forever, others look at their periodic balloons as opportunities to sell and exchange into newer, larger buildings. Although loan terms are not public record, you can usually estimate when they will roll by assuming a five to seven year life for local bank financing and a ten year life for life insurance or conduit debt.

  • New planned construction.

    New competing buildings coming to a market generate a healthy reason for owners to sell before their tenants move out. To fully capitalize on this information, you will need to be well ahead of the actual commencement of construction. After all, buyers may be wary of taking on existing buildings once new construction is underway.

  • Recent sales in the area.

    When a building in a given area sells, there are two reasons that other owners may be more willing to put properties on the market. If the existing sale is at a particularly good price, it may motivate them to take advantage of a hot market. The other motivation comes from the fact that there may be buyers that are interested in the area but did not win the opportunity to buy the other building. When offers circulate, sellers tend to listen.

[Tweet “Use these 4 market trends to help you identify likely #cre prospects”]

While all of these events can motivate clients to sell, the list is far from exhaustive. When you review the market, try to think like a commercial real estate owner. Remember that many owners are motivated by either fear or desire. When something bad happens or could happen, it triggers their fear motivation. When something good happens, it can trigger their desire to cash in on it. If you look at your database this way, identifying probable transactions becomes easier.

Recent Posts

RECon 2018 Review – 3 Glaring Negatives

This week I made my annual trek to Las Vegas for the greatest commercial real estate show on earth. ICSC’s RECon 2018 had all the pomp and circumstance as the last 7 years (my consecutive attendance streak), including: the big booths, extravagant parties (shout out to...

The 5 Pillars to Grow a Great CRE Business

When I was running my own commercial real estate firm, I was busy. I would characterize most days as chaotic. Even when I did have a plan for the day, distractions, interruptions, and opportunities would appear from nowhere and knock me off course. I had bought into...

A Simple Yet Powerful CRE Marketing Tool

The following blog post is from HBS Resources President and Massimo Group coach, Blaine Strickland. I am thrilled to share that Blaine has just launched his first book, Thrive: Ten Prescriptions for Exceptional Performance as a Commercial Real Estate Agent. In today’s...

How to Find Your Specialty with 3 Questions

I am continually surprised by Commercial Real Estate brokers who lack a specialty. All top performers in CRE have a specialty. Yet, those mired in mediocrity refuse to hone in on what they can be awesome at doing. In fact, business owners of all kinds often have this...

4 Ways To Make Telephone Prospecting Easy

I once worked with a commercial real estate brokerage manager who said there were two types of people in the world – those that didn’t like to cold call, and those that lie about liking cold calling. He might have overstated his point a bit, but he does have a point....

Here’s My Weekly Plan for Maximum Results

With our coaching clients, we implement a productivity program - appropriately termed I.P.A.I.D.™. This process allows them to look back at every day and answer “yes” to the question: “Was I paid today?” I also use this approach in planning for my week. Every Sunday...