The Market Story
You start gaining your prospective client’s trust by demonstrating your knowledge of their property and story. You gain their respect by demonstrating your knowledge of the surrounding market.
While certain types of market data are standard fare for client presentations, the way in which you show them is not. The strategy and aesthetics behind the display of information can set you apart from your competition. And setting the stage early (pre-proposal) positions you as an expert from the outset.
But first, make sure you know these common data elements and their benefits.
Demographics can be applied to all property types, but they're most important when dealing in retail, hospitality, multifamily and office. You need data to determine if there is sufficient population to support a store, or to analyze the specific makeup of that population to see if they fit your target profile. In office, hospitality and multifamily, surrounding demographics can also be used to determine what types of rents or prices you can demand.
You wouldn’t put a brand new LEED Platinum office building in a neighborhood that would detract from it’s appeal, thereby failing to maintain the rents necessary to achieve the target NOI. Nor would you put a check cashing/payday advance store on Rodeo Drive. However, there are circumstances where shifting demographics in an area could give you an opportunity to help your client benefit from lower rents, lower price per square foot or price per acre.
You’re trying to determine if the market exists, if there’s one forming or if you need to alter your approach and reset client expectations. Regardless, you have the opportunity to add value by thinking through the demographics in a way that exhausts the approaches you might suggest your client take.
This is standard fare as well, and includes market trends like pricing, rental rates, vacancy rates, interest rates, etc. The key is to use relevant macro-level statistics and micro statistics that offer insight beyond what your client can read online or in the newspaper.
Many brokers are fortunate to have research, marketing and support staff that maintains, analyzes and prepares this information for pitches and proposals—but this is also standard. Try taking a novel approach by adding personal insight to the data. Doing your research and taking ownership of information can help you navigate your prospective client through commercial real estate complexities.
Did you know you have a great source for personal market insights right at your fingertips in Apto? You do if you’ve been tracking on-market listings and comps, that is. Top performers are using Apto to build a robust listing and market database—and reaping the rewards when they’re able to offer unique information to prospective clients.
How a submarket is currently used, and how it’s use is changing, can have a very lasting impact on the overall reception or perception your client has on a property. Understanding the market’s land use and overall market make-up helps you highlight both strength and weaknesses.
Here’s how your knowledge translates to important insight for your client.
- The building mix in a building helps you communicate property demographics
- The ratio of residents to businesses helps you communicate opportunity
- The amount of open space in the area helps you communicate recreation and natural beauty
- The area destinations help you communicate remote demand
- The total square footage of retail space in the area helps you communicate the exchange of money and the opportunity to capitalize on it
- New developments help you communicate change and adaption
There are negative effects as well, though they aren’t as fun to talk about. Nearly all of the things above could also have a negative impact on your client’s overall goal. And guess what? It’s okay to communicate that—you’re an advisor, not a used car salesman. Tell your client the negative impact now and they’ll likely reward you later.
Apto can help you develop statistics about land use. If you are building a property database in Apto, you can easily pull numbers that give your client insight and establish you as a credible expert in their desired submarkets.
There are other types of data that can help you convey the market to your prospective client, too. Think traffic counts, drive times, infrastructure changes such as mass transit or major roadways, environmental factors, zoning and zoning overlays, tax zones, enterprise zones, and even psychographics, which are like demographics but have to do with people’s tendencies, habits and mindsets.
All of these details can bring a tremendous amount of insight to your client. You can include them in speech, but better still, include them visually to create a deeper understanding. The best way to do that? Maps.
Most brokers know how to gather the data above. The opportunity to distinguish yourself can be found in the display of that data.
Just like graphs are the best way to communicate bi-laterally correlated data sets such as price and time, maps are the best way to communicate spatial phenomenon. When your client asks “where” or “how far” questions, a simple answer like “next to Millennium Park” or “two miles away” may suffice, but suffice is to provide just what’s needed. To win a prospect’s business, you need to do more.
Consider these examples in the following illustrations:
Where is the office location?
"Right next to Millennium Park" ...or....
What are the nearby restaurant or entertainment options?
"You're two miles from the downtown hub" ...or...
The two examples above don't just give a nice visual, they give your client a vision for what those words actually mean. To see the carefully placed trees the landscape architects planned, Cloud Gate (The Bean) and the Pritzker Pavillion with Frank Gehry's cornucopia-like stage evokes emotion and nuance that words can't.
Similarly, clients get more context than "two miles" in the second example. They can see that they are a simple car or bike ride away from downtown Pearl Street. They can see that they pass through a large regional shopping center, which while full of retail and restaurant options, is likely also full of traffic during peak hours.