For any commercial real estate broker, sourcing and closing new listing opportunities remain integral to success. It’s an ongoing process that never ends. With the rise in digital, brokers are increasing in divergence in how they source listing opportunities.
Here, we’ll cover how you can leverage different tools as a broker to find opportunities. Specifically, we’ll look at how to find seller leads and then how to turn these leads into listings.
If you are still considering where to list your properties, read our comprehensive guide to choosing commercial real estate listing platforms.
Part A: How to find Seller Leads
The first step is to generate a list of leads that have the highest probability of selling or, seller leads. Commercial brokers from leading firms like Colliers, Cushman & Wakefield and Marcus & Millichap use Reonomy for this exact purpose.
Reonomy’s database consists of 50+ million commercial assets with ownership information.
Our filters ensure that you can navigate to find seller leads or owners most likely to sell that are relevant to you. Once you have completed your search and have your results you will have generated a lead list of highly targeted potential sellers. You can export this information into a CSV (Excel) file and use for marketing purposes that we describe in part B. With Reonomy’s filters and best in class ownership information, you’re making sure your marketing campaigns have the best chance of success. First though, let’s walk through the different filters you can apply to make sure your leads list is highly relevant.
The most likely indicator of an owner’s willingness to sell is how long they have held the property. In other words, the longer someone has held the property the more likely they are to sell. With Reonomy, you are able to run search filters to search for properties that haven’t sold over a certain period of time. The average holding period of commercial property is roughly 10 years, as a result, most brokers start their search by filtering for properties that haven’t sold for at least 10 years.
Following this, there are several additional layers of filters you can add to ensure you are finding the targets most relevant to you. Additional sales history filters for refinement are often the first layer of filters added. These filters include;
- The value of the most recent sale by value range
- The most recent price per square foot by range
- Whether there was a sale between a date range
- Whether there was no sale between a date range
- Whether the most recent sale was a multi-parcel sale
The next filter layer is searching by geography. If you work a certain locality or area you can really narrow down on your focus. Within Reonomy, you can filter for state, county, city, zip code and street. You can also draw on our interactive map to only show results in that area. If you like many brokers, feel you know the area you work like the back of your hand then you could do that.
Equally important to geographic filters are asset class filters. If you focus on a specific property type or several property types you can select and deselect to have them as part of your search. Alongside the major categories of asset classes – industrial, multifamily, office etc. – there is additional specificity within each umbrella class. Such classifications include dental buildings, duplex and even parking lots!
Finally, consideration of building level characteristics should be given. The following can all be applied for further refinement;
- Year Built
- Year Renovated
- Building Area
- Lot Size
- Total Units
You can explore all of these filters, plus the unmentioned debt and ownership filters with a free trial.
Having applied all the relevant filters – you’re now ready to export your highly relevant lead list. For each property that matches, Reonomy goes beyond the LLC to provide you with the owner’s name, phone number, mailing address and email. This information will kick-start your marketing campaigns to convert leads into listings.
Ultimately, lead lists serve as systematic tools for making contact with prospects. If you convert two percent of all prospects, a list of two hundred leads would set you up for four new deal closings. The more specific and relevant the lead lists the higher your conversion rate is likely to be. By leveraging the filters listed above, you’re saving time at the point of making contact.
Part B: Leads to Listings
With the leads on hand, there are three main marketing channels you can use to convert them into listings – calling, email and mailers.
Cold Calling Campaigns
The debate around cold calling and its success are oft debated. We previously outlined both sides of the debate on commercial real estate cold calling. The degree of success in cold calling really comes down to how relevant of a prospect you are calling in the first place.
A successful campaign is influenced by a range of other factors and techniques. Things to consider include;
- Structuring your calling time
Broker John Highman argues that you should have a distinction in the time spent on building lists and making calls. He also argues that it takes close to 20 minutes to warm-up into any cold calling so it’s important to have a strong list that allows you to carry momentum once in your calling routine and flow. Build structures around your cold calling schedule.
- Do you use a calling script?
Using a calling script comes down to personal preference. Contrast the scripts of two brokers – Bo Barron and James Kim to see how a difference in preference can exist. As you use tools like Reonomy, and call more relevant prospects a calling script becomes less relevant. You are equipped with a wealth of information on the call recipient and their properties to make the call relevant. Opening questions could include;
“When you purchased this property in 2002, what were your thoughts about how long you would keep it?”
“Your property is in [zoning X], there are a number of developers interested in doing [type of development] in this zone, have you thought about testing that interest in your property?”
- When to call? How many times to call?
Generally, it is considered that the average caller makes too few attempts to reach their end prospect. In 2007 it took an average of 3.68 cold call attempts to reach a prospect and in 2013 it took 8 attempts.
When to call attracts a range of viewpoints and opinions. One Keller Williams study suggested that the best time of day was to call between 10 a.m. and 2 p.m. and the least effective time was 5 p.m.
Email marketing has the potential for a very high ROI. For businesses in the U.S., there is an average of email marketing has an ROI of 3800% according to the DMA. According to Campaign Monitor for every $1 spent on email marketing $44 is made in return.
When performing email marketing campaigns the first point is to determine what type of campaign structure you want to use. If your lead list is narrow, then highly tailored, personal emails might make sense. Alternatively, a drip campaign with several emails or a newsletter campaign might make more sense with larger lists. When cold emailing, consider the following important points;
- A powerful and intelligent headline will grab attention instantly, and make your content stand out. With open rates between 20-30%, making sure someone opens your mail is the first challenge. In a flooded inbox, articulating relevancy and value proposition are key.
- Build credibility or trust for your personal brand. You’re cold contacting this person, they have no knowledge of reputation – overcoming that is crucial for them to continue to engage. Include recent properties sold, testimonials or awards.
- Provide value through content. Don’t go for the quick sale, but use quality content as another means to build credibility. Include market reports, guides (like this one!) or thought-leadership blogs.
- Finally, use a call to action to motivate a decision in your readers to get more information or contact you directly. People are bombarded with 1000s of marketing messages a day. If you do not challenge someone to take an action, they simply won’t.
Direct Mail Campaigns
Direct mail has remained a staple of the real estate industry for some time. With an average response rate of 4.4%, the unit economics of direct mail can make sense. While it may seem a completely different channel to email – many of the same considerations and principles apply.
Like email, the first thing you need to consider is the format. Direct mail can be delivered as flyers, postcards, letters or even packages. The choice here will most likely come down to the size of your mailer list and what makes sense financially. Following that, decisions around design and messaging are also looking to achieve the same outcome as email – showing value and building credibility. With less space for words than email, the importance of design rises. Again, testimonials, awards and recently sold properties could each be included. Finally, again, having a succinct call to action is crucial. Whether it is encouraging the recipient to call you, go to your website or read more somewhere, directing action is a must. You can read more about mailers in our guide to success in direct mail.
The final point to be made is that none of these marketing channels need to be taken in isolation. A print campaign combined with an email campaign enables you to have double the impressions on a lead. With greater impressions, the probability of them taking actions increase. On the other hand, some leads might not be able to be reached by a certain channel. By being multi-channel you are setting yourself up to reach the most leads as possible. Regardless of your choice of channel, your success is set up in the quality of your lead list. Reonomy as your prospecting tool will help you achieve this quality.