Even the best properties don’t get top dollar unless they are properly presented to the market.
This page describes the process of marketing and selling a commercial property with Hawkins Commercial Realty. It covers our techniques and practices as well as corporate philosophies. In addition to highlighting the numerous things we do well we note specific and substantive things that we do that no competitor does to our knowledge. Clearly labeled “UNIQUE,” these are worthy of extra attention.
The Culture
Hawkins Commercial Realty’s founder has started and developed businesses in various sectors: specialty retail; industrial services; ecommerce; internet marketing; mobile applications. With those businesses, he found himself negotiating as a principal on dozens of commercial property transactions, buying, selling, leasing, and developing commercial properties, gaining customer-side experience invaluable to this firm. He also was a top producing financial advisor, a Senior Vice-President of Investments and a Chairman’s Council member at Morgan Stanley. Then later, he was a Chairman’s Circle level commercial broker-associate at Florida’s largest independent real estate firm. What was learned from these combined experiences served to form the foundation of our five guiding principles: always be responsive; be effectively assertive; continuously develop and utilize superior competency; be sensibly creative; endeavor to add value to the process.
With everything we do, we endeavor to be client-centric in our approach, asking ourselves at every turn how we might best apply our energy, expertise, and contacts to add value for our clients. Acting as expert advisors, we strive to make things easier for our customers, smoother, less frustrating. We endeavor for our clients to be more confident in the process, and we maintain a focus on effectiveness. This involves a combination of marketing, technical expertise, and skillful negotiating.
We are intense about certain philosophies with regard to commercial real estate brokerage. We believe a property listed with us is both a privilege and a responsibility, and that owners have an expectation of, among other things, responsiveness. Consequently, we experience internal rage – can’t think of how else to refer to it – as we regularly run into other brokers that don’t return calls, emails, text messages for their listed properties. We also do not do things for the benefit of our appearance – we don’t try to be heroes with your asset – but instead simply seek to be effective. We also don’t pick at owners of our listed properties, by-a-thousand-cuts style, with every little “too expensive” comment a prospective buyer makes with a too obvious effort to get a price lower, but instead after some time consider activity and bona fide offers to discuss any strategic shifts with a listing. We seek to understand, then to help owners make the decisions we would make with the same objectives and knowing what we know.
Marketing
The vast majority of our competition will highlight their marketing. With our competitors, this concentrates solely on the “push,” i.e., getting a property in front of potential buyers. Indeed, that matters, but there also is the continued marketing to interested buyers and their advisers, what we call “pull marketing,” but more on that later.
The internet is the biggest part of what is generally referred to as marketing, i.e. the push marketing alluded to above. There are 3 main places to post a property online, to which we add a substantial fourth. We list properties in all these major platforms. At least equally importantly, we do so effectively, describing the property accurately and with appropriate detail but in a manner so as to maximize views and inquiries and thus, in turn, buyers.
LoopNet is the most well known of the bunch, to be sure. We generally list properties as premium listings. This type of listing, per LoopNet, gets six times the exposure of a standard listing. Many of our competitors do the same, though not all.
Costar, which owns the aforementioned public facing Loopnet, also offers a subscription service referred to as “Costar” that is commonly used by commercial real estate professionals. A subscriptions costs nearly $5,000 a year per subscriber, thus not everyone involved in buying and selling commercial real estate are subscribers. Nonetheless, you definitely don’t want to miss out on key exposure to those that are. We are, of course, subscribers and highly active users. Getting a property’s information and specifications correct and well presented in Costar helps a listing’s prospects of successfully selling considerably. Most of our competitors do not do this, though some do.
The Commercial MLS is also an important place to list commercial properties, particularly properties under $10 million. The fact is that many buyers in the $1.5 to $10 million mid-market price range are represented by residential agents that actively use MLS. Many commercial brokers don’t even list on MLS however, as it a somewhat expensive membership and it comes with additional regulatory burden, the biggest of which is a requirement to share commissions as published in its service. We see that last “burden” as a benefit to our listing clients as buyers’ brokers that use the commercial MLS are pleased to see a listing on this platform given that it clearly defines the co-broker fee participation at the start. We would guess that a bit over half of brokers in the mid-market price range list properties in the commercial MLS. We do.
[UNIQUE] Then, we add another, the aforementioned fourth, which is this HawkinsCRE.com site, likely the most trafficked website dedicated to Miami area commercial real estate. In one analysis we did at the end of a listing (property was sold), we found that HawkinsCRE.com had views of pages specifically for that listing that totaled 37% of the detail pageviews on LoopNet. That is extra high-quality traffic. No competitor can claim this.
[UNIQUE] We also developed a tool, 100% proprietary to Hawkins Commercial Realty, to identify and market to properties with given characteristics in proximity to a property. For listings, we generally utilize this to do by way of highly targeted mailings and email or phone marketing. Some brokers will indeed do listed near-you-mailings, but none we know of do it as targeted as we do or go to the next level of reaching out more directly to the owners other than by mail. Effectively targeting buyers for commercial property involves a lot more than proximity marketing.
Support Materials
Instrumental to effective marketing is the development and utilization of effective support materials, generally offering memorandums, flyers, and other supporting documentation. Our offering memorandums (samples) include all relevant detailed specifics of the property. These can include square footage, lot size, zoning, floor plans, properly formatted financial statements, hypothetical return calculations, maps, demographics, traffic reports, and more. What information is included is different for each property as with commercial property, each is truly unique. Offering memorandums generally run around 30 pages and are made with every effort to diligently point out features and characteristics of a property, particularly those that make it unique, appreciating that the “curb appeal” for commercial properties tends to happen when viewing the offering memorandum or other support materials.
Probably half of our competitors create reasonably nice materials for their listings. The substance within these matters considerably, however. Few of our competitors get the substance right. The vast majority of competitors’ offering memorandums do not include all the information helpful to consider a property.
[UNIQUE] In our offering memorandums we generally include a hypothetical IRR calculation. Even owner users gain comfort in seeing that the property would provide a return for a passive investor. [UNIQUE] In addition, we commonly include a comparison of renting at market rent versus buying the same property over time. Most buyers think there is a benefit, but have never actually quantified it. The real benefit, using a typical set of expectations at purchase, tends to be much more than is intuitively thought. It is to a seller’s advantage to have this more fully appreciated.
Finally, it must be mentioned that incoherent or incomplete financials – things like leaving out management costs for a building with tenants as if a building will manage itself and only including ongoing de minimus maintenance costs as if roofs, air conditioners, etc., last forever – damages the credibility of the offering materials and anyone presenting them. The vast majority of competitor financials we see have to be intuitively adjusted for these missing items. In many cases, it is even worse than that, with financials necessitating construction from a hodgepodge of forwarded cryptic “stuff.” If you’ve been on the buy side of sub-institutional commercial property, you’ve seen this. We present financials in an intelligible and credible way. We know the difference. Buyers do too.
Guiding Buyers+ Along (Pull Marketing)
We like to use the term “pull marketing” to refer to the process of diligently guiding all prospective buyers and their advisors (the “+” in the heading above) along in the buying process. This, we believe, is as important as the push marketing, but it is seldom discussed by brokers. This is a process that begins with responsiveness, being accessible, responding substantively and competently, and getting a buyer into our systems, essentially onboarding prospective buyers. Bringing a prospective buyer along continues with “servicing” these prospective buyers by way of ongoing proactive communications and continued accessibility and responsiveness. For that, we utilize proprietary lead management software [UNIQUE] that, among other things, prompts contact with prospective buyers over time until the property is sold. In 2020 more than half of contracts entered into on properties listed with our principal broker came from one of these proactive contacts months after an initial inquiry, long after other brokers would have given up. A good broker will follow up with prospective buyers, sometimes more than once, but we’re the only one we are aware of that steadily follows up until a property is sold.
Many buyers will be represented by brokers. Our philosophy is to treat these brokers as customers, helping them along the way with their process if needed. This starts with a commercial MLS listing, which, as noted above, comes with a commitment to sharing a commission. Buyer’s brokers are not always familiar with commercial transactions. Dozens of times we’ve essentially trained some buyer’s broker on how to do a commercial transaction. We do this as needed in the interest of serving our listing. Most commercial brokers are not so forgiving.
Deal Striking, the Art
All this culminates with deal making, utilizing experience and skills and tapping into resources as necessary to structure deals and get sales closed. Virtually every deal between a willing buyer and seller has some aspect that must be worked through. Doing that effectively can make the difference between getting a property sold on attractive terms or not.
No commercial deal is simple. Each one is highly dynamic, with all kinds of factors affecting it, and with parties whose objectives seldom align even on term structure, let alone price where their interests are clearly directly opposed. As you might imagine, not everyone is good at this. To be effective, one has to know when to listen, when to speak, what to say, how to say it, when to stall, and when to nudge, and perhaps most of all must be adept at coming up with solutions. Technical expertise and communication skills must combine to reach terms that work for both a buyer and seller whose only shared interest is that they desire to make a deal on a property.
We diligently work to move the process along, keeping all the parties talking until a deal is made. When a buyer is interested, we do everything we can to make the process as easy as possible for him or her. If they have a broker less accustomed to the nuances of commercial real estate, we help them along, guiding them to resources they can utilize to help their customer close on your property. Simply put, we get deals one.
Managing, Filtering, Buffering
Finally, we’ll add some more conceptual thoughts about managing, filtering, and buffering roles and functions. A broker in one sense is engaged to manage a selling process. We believe it is our job to effectively and professionally manage the process of marketing, negotiating, and closing on the sale of a property listed with us. In doing this, we believe we should endeavor to make the process less cumbersome and less stressful for an owner, not more. We believe it is our role to sensibly filter what is said by prospective buyers, particularly and principally the inevitable efforts to jawbone the price down. We’ve had clients share their frustrations with other brokers seeming near eagerness to share such jawboning comments. Our belief is that doing little more than relaying such comments to a listing client each time serves no constructive purpose. The real measure of interest in a property is inquiries and bona fide offers over some period of time. If those are the low side, general characterization of commentary can then indeed add context. Other than and prior to that, jawboning is only an anticipated strategy of most buyers. Responding to it involves the last of the aforementioned functions, buffering. To be most effective, we know that we must buffer such jawboning, listen and accept what it said, then respond in a way so as to not give up position while also being careful to not reduce a buyer’s interest. Buffering also comes into play as a negotiation becomes active as an effective broker can make a negotiation more productive by way of phrasing, timing, and contextualizing. We find some competitors to be pretty good at this, but many are frankly not.
Our organization has an entrepreneurial heart. We always seek ways to do things better, to be more effective, to develop and enhance tools to provide a better value for our customers. We are an American company, after all, and that is the American way. On this page, each item labeled “UNIQUE” is a clear example of that for this business, but for the rest in the aggregate I’d submit it is the general theme. Good enough isn’t.
The process of selling a commercial property takes time and effort, and the price at which a property will sell will be what it is, more or less. What we can do is tweak the odds in your favor, i.e. tweak the “more or less.” Sellers frequently make sure to not leave anything on the table by pricing above, sometime too far above, a likely selling price. What they commonly miss is that they instead leave money on the table a little at a time by way of not having some of the things we’ve noted above done as well as they could be, if they are done at all.
Lets go!
That is our pitch, in text form. Written form like this works well, but we generally welcome an opportunity to present our case or answer questions above it in in person, on the phone, or by video conference. Getting started with us is easy. Simply contact James Hawkins via email at james@hawkinscre.com, or reach him by phone at 786-581-7990.