The commercial real estate market is evolving, and CRE brokers may struggle to keep up. Here’s how to adapt to the changing times.
Whether you’re just getting started in the commercial real estate world or you’re already established, you may already know this is a challenging field. This is even more true today, as we sit at an intersection of pandemic-imposed struggles and a rapidly evolving tech sector.
We previously presented you with seven challenges facing CRE brokers. But with such rapid changes to our economy as a whole, adapting will be a continuous challenge.
Additional challenges facing CRE brokers today include:
Rapidly Changing Markets
The pandemic forced many businesses to adopt a work from home mentality. Others were forced to close completely. Experts don’t expect business to return to “normal”, but a new normal is in sight.
As market expectations change, so will that of commercial real estate. The start of 2021 saw a dramatic shift in the commercial sector. The rise in online shopping means an increase in demand for distribution centers. The continued work from home trend means less of a demand for offices, but not a complete shutdown.
How to overcome it: If you’re seeing a reduced market in the type of buildings you’re used to representing, it may be time to pivot and try something new. Look at certain types of buildings and how owners intend to repurpose them. Or this could be the perfect time to buy some office space and hold on to it for a long-term investment. You may also want to consider investments in new cities or suburban areas with higher potential for growth.
People are moving out of supersize cities in favor of smaller cities, towns, and suburbs. There are a number of reasons for this: lack of affordable housing, health concerns during the current or subsequent pandemic, the work-from-home lifestyle making commuting irrelevant. If you work with commercial property in an urban area, you may see a downturn in activity as a result. What’s more, rents in some big cities are also dropping in part because of the mass exodus. With widespread shutdowns, there simply hasn’t been as much value in urban living.
How to overcome it: It’s time to branch out into other locations. 18-hour cities have a low cost of living now and show massive potential for growth, but that won’t last forever. Diversify your portfolio with some property in a new city.
With our tech-enabled practices, people are working with more data than ever before. Between sales metrics, market demographics, and emerging technologies, commercial real estate has never been so informed. But this is both a blessing and a curse. There is such a thing as too much data. While more data can be important for informed business decisions, having more data than you know what to do with can leave you overwhelmed, leading you to make the wrong business decisions—or no decisions at all.
The key here is to have enough of the right data and a plan for how to use it. This is a challenge for businesses in every sector. As a commercial real estate broker, you may not know where to start or which data you really need. This is especially true if you’re looking into new markets or flirting with new business technology.
How to overcome it: ProspectNow uses predictive analytics and machine learning to create a likely seller algorithm. This flags properties that have a strong potential for hitting the market soon, and gives you the chance to jump on them before they show up on the MLS. Using this data effectively gives you a competitive edge in a market that’s never certain.
It’s no secret that the pandemic led to economic struggle for many people. Among the hardest hit were small businesses, many of which closed for good after only a short period of shutdowns. Unemployment rates soared as businesses laid off workers. While the government provided some relief for individuals and businesses, it didn’t always make up for lost revenue. Many are still trying to recover financially from the events of 2020.
How to overcome it: This is a tricky situation as there isn’t exactly a quick fix. It may be worth it for you to hold on to some key investment properties according to the projected market changes mentioned above. Or use this as another opportunity to invest in new areas. Higher housing costs means more people will move to multi-family buildings or mobile home parks, raising the demand and creating a unique opportunity for you.
Rethinking How To Use Space
If 2020 taught us one thing, it’s the importance of social distancing. Staying six feet apart from each other helped slow the spread of this virus, but what about future outbreaks? The need for breathing room won’t go away with the end of the pandemic, and packing consumers in stores like sardines never did us any good. In many brick and mortar buildings, this may mean rethinking traffic flows to promote social distancing and avoid overcrowding situations, or the ventilation in buildings.
How to overcome it: Stickers on the floor are no longer enough. Improved regulations may be coming to your area. Find ways to implement long-term solutions in your buildings to promote breathing room and improve air quality. Go beyond the current Fire Marshal regulations and you may come out ahead of the curve.
As a hybrid real estate prospecting tool and full-featured CRM, ProspectNow has the tools you need to adapt to today’s ever-changing commercial real estate market. Its extensive property search tool shows you every property for sale in the country. It also makes use of unique data analytics to identify properties likely to sell before they hit the market, giving you an opportunity to make the first move. This is your chance to find new opportunities in other markets that may be on the rise, whether you’re looking into new property types for sale or properties in other parts of the country. ProspectNow is your tool to bridge the knowledge gap.
Once you’ve identified a property, ProspectNow makes it easy to find and contact the owner. Access owner contact information with one click, or even find the contact information for an LLC property owner. If you’re not sure what to say, ProspectNow provides templates for email, postcards, even online ad communications. Set up multiple ad campaigns and send out your messages through the platform with one click.
To see how much money you could make with ProspectNow, there is a handy ROI calculator on the website. Let it tell you how many more properties you could find and deals you could close just by using the platform. Simply enter your current location and previous sales. It will tell you how many likely sellers it’s spotted in your area, the predicted turnover, and possible commissions that could go in your pocket.
If you’re ready to close more deals and make more money, it’s time to start your ProspectNow free trial. Sign up today.