Perhaps one of the greatest mysteries in real estate is how a broker effectively markets various types of commercial properties. Is there a perfect, one-stop, marketing program? Nope. Are there methods of marketing these properties that ensure information is getting buyers or investors? Maybe.
So, why is it a broker’s specific marketing methods remain unknown to the public? Probably because there are so many different types of marketing systems that go along with the various types of real estate. Two different properties in different commercial categories won’t be marketed the same way even if both are listed with the same broker.
Let’s say John Doe with ABC Realty has listed for sale a 2-acre parcel of vacant commercial land on an attractive retail corner. In addition, Doe has listed a 20-unit apartment building in a nearby bedroom community. Both properties are included in the local and regional multiple listing service systems and a national commercial website. Each property also could have an easy-to-read broker advertising sign placed on it. At this point, though, the marketing program for each property will begin to differ.
The 2-acre retail corner will be listed in places searched regularly by retail and shopping center brokers and developers that typically belong and participate in the International Council of Shopping Centers. The trade organization represents nearly all retail stores, developers and investors worldwide.
Target marketing will probably occur as the listing broker submits aerial photos — perhaps taken with a drone — as well as traffic and roadway information and demographics specific to the property to selected retail brokers representing clients whom the broker believes will fit the site well. Each retail entity — be it Starbucks, McDonald’s or Wal-Mart — is usually represented regionally by one brokerage that’s signed a representation agreement with the parent company. It could be any one of hundreds of retail brokerages, but they control access to that particular company.
In addition, the listing broker will submit information to such national commercial websites as CityFeet, CommercialSource, CoStar, LoopNet and the brokerage’s own national website.
Doe will treat his listing of the 20-unit apartment building differently. Buyers for residential income properties are more prevalent than retail developers.
Following their contract acceptance for the purchase, they will usually perform significant due diligence on the units with in-depth inspections that include electric systems, exterior siding, laundry facilities, kitchen appliances, roofing and structural adequacy. These buyers require profit and loss statements for the previous two or three years. They typically also perform a financial analysis to check the accuracy of the seller’s or broker’s operating income expectations.
In the case of the apartment building, marketing must be performed that gets the word out to the sites most often used by investors looking for such properties. This could include the local MLS systems for Realtors, CoStar/Loopnet sites featuring investment properties for sale and broker’s own national website. Most brokers of income properties like the apartment building, have a list of qualified investors looking for similar properties. In fact, the broker network could be the best source of buyers for that property.
It is the specific tools in the commercial broker’s marketing toolbox and broker’s ability to use those tools that separate a successful marketing campaign from a poor one. Ask for a specific plan of action from your commercial broker and be sure your broker has all the financial information needed to prepare proformas for prospective purchasers.