Some commercial real estate / CRE dealmakers just seem to have all the luck. It feels like these professionals consistently do the major leasing deals or sales deals in the industry.
Deals seem to come to them, they play with larger transactions or larger numbers, move faster than everyone else, are tapped into market intel, and have a hand in most deals. And they always have time on their hands for more deals…
Meanwhile for those industry’s professionals who put in 100% hours on a daily basis. They somehow, frustratingly, can’t break in to the elite level.
Why?
This post aims to unpack why this happens. Who these deal makers are. And, if you are a deal maker who is almost there, how you can you level up.
The image above unpacks the 4 skills required for deal-making success in CRE (data, experience, relationships and efficiency). The premier deal makers live in the center – that is, they have all 4 skills in their toolbox. Further, they know how to use them.
To clarify, we break down 4 other types of deal makers in CRE. These 4 clusters of professional, on the cusp of making it big, are each missing only 1 of the 4 major skills.
“Good farmers, no land”
A. The Braniacs
Commonly made up of previously support personnel / back office workers. You know the industry and have been part of other’s successes. But you haven’t had direct access to customers. You are ambitious and looking to access the bucks that come with working in the front office.
The good: These professionals have the warchest to be devastating. Many exceptional deal makers today followed this journey to where they are now. They are good learners, hard-working, disciplined and determined, and highly equipped to upskill.
The bad: But they don’t yet have relationships or networks. So they can’t access the major deals.
The solution
- Short term: team up with those who are strong with relationships or who are good hunters. Meanwhile, proactively engage with customers (by doing on-risk work for free, educating them what the bar of excellent service feels like). Relationships will grow. Clients need you because you have skills they don’t have. Your reputation will come with time and positive customer interactions.
- Long term: grow your deal-making reputation, slowly get referral business.
The missing skill – relationships
Relationships can be defined as the state of being connected. The cornerstone of relationships is two parties being able to exchange value – whether it is a meaning or emotional support or meaningful friendship or help. Relationships in CRE are built (over time) on the ability to deliver value, do what you say will do, exceed expectations, and do this pleasantly and with the best interests of the other party at heart. Consequently this deepens the relationship foundations of trust, respect and affection.
“Valuable, with flags”
B. The Plodders
You are an experienced, well-known and respected industry player. Boasting a long history of deal-making and client service. You’ve probably been burnt by tech before – and are slightly mistrustful to or fearful of change. As a result: low use of efficiency tools.
The good: These professionals do deals. They do good deals for their clients. They are trusted and regarded as honest and dependable.
The bad: However turnarounds are slow. Customers may feel frustration with slow timing in the CRE industry.
The ugly: Slow pace and slower deal cycles may shift time-pressure on to customers. With hard deadlines, time analysis time customer side is unintentionally compressed. Therefore forcing customers into sometimes rash decisions.
The solution
- Embrace and learn to use commercial property efficiency tools.
- Alternatively, team up with other deal-makers on commission splits, or hire in, train and manage the efficiency competencies you are missing.
The missing skill – efficiency
Efficiency can be defined as doing less, but achieving more. For instance, it’s measured by speed of task completion, timings of turnaround. Consequently, the higher the ratio of results out to inputs (cost or time in), the higher your efficiency. Technology combined with great processes is the ultimate unlocker of efficiency.
Relevant example of tech-fueled efficiency: if you go back that far, think about how painful bank queues were before internet banking!
“Dangerous deal makers”
C. The Cowboys
You have been in the game for a long time, and are well known and begrudgingly respected by your competitors. As a hyper-efficient deal-maker, boasting impressive deal tombstones, you are trusted by clients. Customers are loyal to you. Until they are not.
The good: These guys are a pleasure for customers to work with. To customers they are fast, responsive, seemingly on the ball. And they do deals.
The ugly: But these professionals only sit with some of the data. Because these professionals don’t have access to complete data, there is the gnawing risk of unintentionally misadvising customers. Certainly not on purpose, and by sheer bad luck optimal deals are not presented to customers, optimal opportunities overlooked, deals can be lost by more data heavy competitors.
Most times these professionals can get customers the perfect deal. But other times there is a risk they can bomb – with customers ending up over-paying and resentful.
The solutions
One or a combination of the following:
- Outsource and automate data management, or
- Share revenues and co-venture with specialists who have the data, or
- Improve your organisation’s existing skills through one or more of hiring, or training, or more hands on management.
The missing skill – data
Data can be defined as facts, forming the basis of reasoning or calculation. For leasing brokers, data represents all possible vacancies (combined with information like properties, property locations, property attributes and images), and the ability to access those fast and flawlessly. For sales brokers, it represents access to all properties (in the general market and private), in a well-structured, analysis-friendly format.
“Weapons of mass destruction”
D. The Rookies
Generally newer industry entrants. In some parts you are resented by the old guard, other parts you are supported by those who like the entry of new blood and want to see you succeeding. You can talk the talk to customers. But to customers something just doesn’t feel right.
The good: Fast-moving, efficient, generally bright operators. Best-intentioned, popular with customers, they are ambitious, personable and are doing deals.
The bad: On the other hand the guys haven’t paid their school fees – they “don’t know what they don’t know”. And the customers don’t know enough about CRE to know this. As with insufficient data, there is a risk of bad decisions and lack-of-experience errors – which can unintentionally hurt customers and burn reputation.
The solution
- Short term: Team up with highly respected “greybeards”, sharing deal economics for the comfort of reduced risk to your customers. These “greybeards” have made the mistakes before, so you don’t have to. In return, if you are receptive, you get the enduring benefit of knowledge transmission.
- Long term: “Time is the healer”
The missing skill – experience
“Good judgment comes from experience, and experience comes from bad judgment” Rita Mae Brown
Experience can be defined as knowledge or skill (intellectual property) that you get from doing. In other words: “time in the saddle”. This intellectual property is acquired in many ways. If you do leasing deals, experience involves the process of building up your canvassed database of lease expiries, and tenants in buildings. If you are a sales broker – the best deals are never in the general market. Therefore you want to be actively growing your database of properties. One controllable way to accelerate your experience, accelerate your data gathering.
Something else that communicates experience: doing the hard work up front by asking tenants the right questions. If you be prepared and provide a landlord with a clear requirements brief, you’re already positioning yourself at a different level.
The good news: every successful deal maker today, when they started their careers, was short on experience.
Housekeeping
This point cannot be overstated. We have assumed everyone is working at the same intensity and same level of hours. However, when comparing two professionals with the same toolbox: that person who works 2 hours more a day, every day, will always beat their competitor. In simple terms, all things being equal, those who work hard will always outperform others. And, yes, in age of efficiency tools and data, this sounds “old school”. But it’s a reality.
Further, we have ignored leads as a determinant of success. The best deal makers are not “farmers” of an incoming pipeline of passively-generated leads, but rather highly effective “hunters” of new business. The big deals come from relationships, value demonstration, and successful deals, which in turn drive both referrals and repeat business.
For simplicity’s sake
Likewise, we have:
- Firstly, ignored those professionals who have mastered 2 or less of the 4 skills required. For example: someone has relationships and experience, but doesn’t have the data or efficiency skills. In all of these instances, the risk of ugly is higher, and the opportunity for good lower.
- Secondly, assumed the skill level is either mastered level or cold start. To clarify, no in-between grey areas.
- Finally, assumed that all professionals are operating with integrity and compliant to a professional code of conduct.
Thank you to Stef Contardo and others for their valued contributions to this post. We all hope this both assists and inspires those readers who are deal makers in CRE to greater success
