Over the years, we have had the privilege of working with countless owners and managers of commercial real estate firms. In the process of helping them discover ways to build their success (by helping their people grow their businesses), we have identified 5 key challenges that these owners and managers regularly face. More importantly, we have also discovered several approaches to overcoming these challenges.
Today, I will be outlining these 5 biggest challenges, and then over the next several weeks I will provide several options for overcoming each.
The 5 Biggest Commercial Real Estate Management Challenges:
1. Recruiting Challenges. Commercial real estate firm owners and managers know that the lifeblood of their business is their agent/associate pool. Growing that pool is a challenging and time-consuming process, which requires both a diverse skill set — as well as a clear strategy. Bringing in a fresh college graduate is a very different process from recruiting a disgruntled top producer from a competing firm. Each of these “elevator assets” needs to be handled with care.
2. Staff Challenges. Every producer is an individual, and they all need different things at different times from their manager. The best commercial real estate managers are trainers, mentors, coaches, business strategists, and (at times) psychoanalysts. An old colleague of mine, John McDermott, once accurately summarized that an associate/agent/broker only wants their manager’s attention for one or two reasons: to bitch or to boast. Likewise, the manager has to deal with the administrative and support staff — ensuring they are (not only) getting the job done, but getting the respect they deserve.
3. Business Development & Marketing Challenges. In addition to growing and managing a team, owners and managers of commercial real estate firms play a role in keeping their team busy. They have to wear two hats: that of facilitator and generator. Sometimes, managers must oversee a marketing strategy that builds brand equity and opens doors for brokers to enter. At other times, managers must go into the field and (both) close sales with their team members, and generate live leads for them.
4. Operational Challenges. In addition to managing the team and the brand, leaders of commercial firms must keep the lights on, satisfy the requirements of state licensing agencies, and otherwise keep the office running. Along with these nuts and bolts issues, managers who want to succeed also need to collect and analyze performance data to understand where they are succeeding and where they need to work harder.
5. Challenges Getting to the Next Stage. The best managers we work with keep an eye on big-picture strategic considerations regarding the future of their firms. For example, they look for other practices/offices in their market or in complementary markets that they should acquire or merge with. They also build a personal strategy regarding how they will relate to the team members in the future and how their company will continue after them. They have succession strategies. Unfortunately, many managers are so overwhelmed by the other four challenges that they fail to give these crucial issues enough consideration.
Every one of these challenges may seem daunting, but you can become a master of all of them.
In my next blog, I will expand on the first challenge: recruiting new-to-business, mid-career, and top producers – as well as the key approaches for each.
In the interim, we’d like to hear what your top challenges are as a broker/owner/manager – so we can address those in future blogs. Please take our 1 question survey by clicking here.