“Choosing” The Right Clientele In Commercial Real Estate

 By Jerry Anderson, CCIM, Executive Managing Director, SVN Florida

A common fear of agents new to commercial real estate, especially those focused on investment sales, is that they will not be able to find clients qualified to buy investment real estate. A newly trained agent (advisor) comes to his manager and asks: “What can I do to get face to face with a client? Emails and postcards to owners seem to generate occasional interest from a few investors, but how do I know they are serious and qualified?” I believe the key lies in truly being an advisor to clients and not just an agent trying to “make a match or close a deal for a commission.”

Numerous opportunities are available to the active advisor to contact clients if you think, breathe, eat, sleep and study commercial investment real estate. Buyers of investment real estate are usually not nor should they be encountered on a one-time basis. (I like to call it “one & done” versus “doing more business with fewer clients.”)

The key is to be in constant contact with people who are already involved in commercial real estate and to provide them with “something” of value. Something valuable could be market intel beyond the generic reports they most likely have seen. We are bombarded with information these days from many directions but the interpretation of “what this could mean to your building” is what makes YOU valuable as an advisor. I like the “statement of fact and what it means” format. As an example:

The U.S. economy created 211,000 jobs in April, dropping the unemployment rate to 4.4%. This is the lowest unemployment rate since mid-2007.

What I believe this means – the two-month average for March and April was about 140,000 new jobs. That’s not great, but not terrible.  As we know, job growth drives commercial real estate. The biggest gains were professional business services, along with leisure and healthcare, which is good for our local office market (currently at a 14% vacancy factor).

Deciding Who To Work With

Image of confident businessmen handshaking at meeting

Once a potential client has been found, the advisor must decide if the client has the necessary capital, attitude and motivation to invest. If the client lacks any of these, an advisor may find he or she is educating the client about investment real estate for free. Provide service, certainly, but only if the client is qualified and capable of decisive action. There are a number of questions that need to be answered before you can identify a client capable of action.

  1. Will the client come to your office (or at least your local Starbucks) to meet with you? If possible, have the client come to your office where you can have their complete attention. A professional atmosphere with prominently displayed photos of past transactions can subtly convince the client you are an active, successful commercial real estate advisor. If you go to his or her office, look for pictures of buildings on the wall to talk about or take some photos of what the client owns so he or she can “tell you the story.” Every building has “a story,” either about how the client came to acquire it or what the plans are for the asset.
  1. Is the client cooperative during the interview process? Does the client understand that the more you know about the situation, the easier it will be for you to help? Probe for objectives, expectations, and goals by gathering facts. The client should understand that simply looking at property is like a doctor starting surgery without first asking the patient: “Where does it hurt?”
  1. Will the client disclose the amount of cash he or she has to invest? Avoid the words “cash” or, “How much money do you have?” Concentrate on talking about “initial investment” or “capital to invest, the source of capital or altering your investment portfolio.” Make sure you know how much is available and the source of the income. Many deals fall out of escrow because the buyer was not properly qualified. I advise sellers to “chose” the buyer who has a track record of performance closing deals, not a buyer who will pay you a couple of dollars more and then needs to spend months in due diligence. Many times, long diligence periods are nothing more than a ruse to raise the capital needed to close.
  1. Is the client’s expectation of the market realistic? An investor who has been away from market activity for a while may not understand the comparables, prices, terms or financing vehicles of the present market. Avoid working with unrealistic buyers and sellers at all costs!
  1. Is the client prepared to inspect properties that appear to satisfy his or her needs? If the commercial real estate investor delays the decision process, you might consider asking a few more questions about the client’s capital resources. Many times, clients will be embarrassed to tell you their true abilities and needs. Never stop asking or, as I like to say, “Let me make sure I understand your objectives as they relate to (fill in the blank)?” Of course, do it sincerely, not in a challenging or offensive way.
  1. After inspecting a number of commercial real estate properties, does the client make an offer? A properly qualified and sincerely motivated client will probably, at least, express an interest in negotiating prices or terms of a property that appear to meet his or her needs. If no activity is generated, it might be time to ask the client if objectives have changed since your initial interview. Possibly, you have misinterpreted the client’s commercial real estate needs and realignment is in order.
  1. After writing an offer, does the client stay interested if a counteroffer is presented? Human nature usually dictates that some negotiating must take place in real estate transactions. Price is not always the object of compromise. Terms or conditions are often more important than the overall prices. A client who states, “My first offer is my last offer,” may not be as motivated to buy as the client might have us believe.


If I can be of assistance in your decision making even if only as a sounding board, contact me for a confidential conversation. I may not have the answer for you but you can tap into 35-plus years of experience in consulting and leadership in the CRE brokerage industry. Jerry Anderson, CCIMSVN Florida Commercial Real Estate Advisors

Contact: Email:  jerry.anderson@svn.com Phone: 386-547-4968

Want To Be A Part Of SVN Florida?

Jerry Anderson is the Regional Developer for SVN International Commercial Real Estate Advisors in Florida and is always on the lookout for 1) independent firms that want to be part of one of the top companies in the industry WITHOUT giving up their independence and 2) CRE advisors that want to be part of company that has a culture of collaboration and “doing what is right”.


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