Friday, May 25, 2012

Structure your presentations for YES!

I provide location advice to owners and occupants of industrial buildings in southern California. Most in the CRE trade would agree that we present every day and consequently must structure our presentations for a YES. This could be presenting ourselves, our building alternative to an occupant, a marketing plan to an owner. What about trades that don't present? I contend that ALL of us present...every day and structuring our presentations in the following manner will help you get the YES that you seek.

The Premise:
Have you ever heard the phrase, "I don't sell for a living" so sales techniques are not important? Well I have, and I disagree! EVERYONE sells, just may not think of what you do as selling. Three quick examples..."Darling, I believe we should try that new Latin restaurant that just opened"...which could result in all of the normal objections...too expensive, too far, I don't like Latin food etc." You probably will be eating frozen pizza! "Son, how about completing your science project before we go to the Angel game this weekend?"..."Oh Dad, I have this, its not due until two weeks from now, you are old school..." You may be dashing to Office Solutions at 10:00 PM the day before the project is due. "Hey guys, what about moving our golf outing to Shady Grove this weekend?"..."too tough a course, no caddies, etc." So you get the idea. EVERYONE SELLS, EVERY DAY. The success of your "selling" is up to you!

The Presentation: The key to "making the sale" is to make the idea; your client's, spouse's, child's, etc. their idea. I have discovered that the easiest way to accomplish this is to structure your presentation to include five easy steps...summarize the situation, state the idea, explain how it works, reinforce the key benefits, and suggest an easy next step. I honed these skills schlepping shortening in the seventies! Believe me, you had to make the idea the grocers if you wanted to convince the grocer that he should lose money on your product...tough sale!

Summarize the Situation: As simple as "Darling you mentioned the other day that we should add some "spice" to our lives". To as detailed as "You mentioned that you have seen several new signs on buildings in the area. We investigated your observation and discovered that the vacancy rate on industrial buildings in North Orange County has significantly increased in the past six months. The deals that are getting made fall into two categories...class A buildings leased at class C prices, and buildings sold at 2002 pricing. Your building is Class C. If your desire is to lease, then you must realize that tenants can demand "C" pricing on "A" buildings." A concise summary can build the "ownership" of the idea.

State the Idea: As simple as "Let's try that new Latin restaurant that just opened". To as detailed as "We recommend pricing your building to move. We must compete with "A" space and the best way to do that is with aggressive pricing." Make the idea statement very direct.

Explain How it Works: As simple as "The restaurant is running a two for one special if we reserve before 6:00" We can be there and back in no time and with the money we save, maybe we can catch a movie!" To as detailed as "We have a complete list of tenants in the market that can receive information on your building today. We believe that the aggressive pricing will separate us from the masses. Additionally, we can forward the information to all of the active industrial brokers in the market. Lastly, we have established a rather aggressive Social Media marketing campaign through Postlets that will allow us to distribute the information through Facebook, LinkedIn, and Plaxo." Very important to clearly define your plan.

Reinforce the Key Benefits: As simple as "Spice you said" to as detailed as "Leasing the building one month sooner than anticipated will save you ...$.

Suggest an Easy Next Step: As simple as "Let's leave in an hour" to as detailed as "We have prepared the agreement and upon your written approval, we will begin the marketing campaign."

It really works!

Try forming your persuasion into these five easy steps and enjoy the "sales" that you make every day!

Tuesday, May 22, 2012

How to create a CRE QR code...that works!

I provide location advice to owners and occupants of industrial buildings in southern California. I recently posted about QR codes working for CRE. Today, I will walk you through the step by step process of creating a QR code that will work for you...get people to view your content. The process involves these five steps: Create the content, shorten the URL, generate the code, copy the code to a directory, use the code in your marketing.

Create the content: This is the most time consuming part of the process...or it can be. As you will recall, a QR or quick response code can be embedded with text, a vcard, an SMS, or a URL. Depending upon the type of content that I am embedding I will use two or three different code generators. The one I use for vcards is Moongate. The reason is simple, the generator has more fields than other code generators and the code is easily scannable for IPhones and dumps the info into the phone's contact database. A scan of my vcard appears below:

If you choose to embed a URL...a website, blog, video, that has a http://www address and the address exists, you can simply copy and paste the URL into the generator which I will demonstrate in a moment. If the content doesn't want to film a listing or a message that can be affixed to a must create the content. This can be easily done with an IPAD or IPhone...take the video, dump the video into YouTube and voila...your URL is created. We will start from that premise...the URL exists. We will now create a QR code of a video I shot last week of a listing we have in Santa Ana, California. 1530-1534 E. Edinger, Santa Ana, California.

Shorten the URL: This step can be skipped. The reason that I use this step is because I want to know who scans the code and how effectively it is used. If you shorten the code in a program like bitly, you create a simple analytic for your code. I believe you will have to create a free account with Once you do, the main screen looks like this:

You copy and paste the longer YouTube URL into the bitly program and the URL is shortened. The long code is and the shortened code is . By the way, if you are a Twitter user, I would recommend shortening a URL before tweeting that you can see who (if anyone) reads, re tweets your message AND fewer characters are used. We now have a code that we can enter into our generator. I like Kaywa for generating QR codes with embedded URLs...much easier to use and it is free! The landing page of the Kaywa site looks like this:

Generate the code: We are almost done as the last steps are conducted from the screen above. We have created our content, captured the URL, shortened it, and now we simply choose the URL of the "content type". Enter the URL (should be able to copy and paste). Choose what size QR code you want...S, M, or L and press generate. (I have chosen L and the large version appears).The screen below is how the program appears before you generate the code:

When you press generate, the code appears in the box to the left as so:

Copy the code: You can now copy the code by right clicking on the image and saving it. The code is saved as a PNG file and can be used in marketing brochures, postcards, blogs, websites, etc. the cool thing is that if you used the "shorten" step, you can now see who scans the code and views the video.

Use the code in your marketing: Below, you can see how we used a code in marketing another property, 28 Hammond. Go ahead and try it! It's cool.

Friday, May 18, 2012

Can prospects find your vacant building? Use these tips to make sure!

I provide location advice for owners and for occupants of industrial buildings in Southern California...buildings where companies make and/or ship things. If you own a commercial building(s), at some point the building(s) is going to be vacant. How do you insure that your building can be found by all potential prospects for tenancy or purchase? When I started my CRE practice in 1984, if an owner suffered a vacancy, the owner engaged a broker OR himself to market the vacancy. A building was found by a sign in front advertising its availability, a listing in a MLS, a brochure that a potential occupant or broker received in the mail, a prospecting call, a newspaper ad, or word of mouth...that's it! If an owner had an impending vacancy and agreed to postpone placing a sign in front of the building...a building's chances of being found were reduced dramatically! When marketing buildings today, we still rely upon these age old techniques but must insure that a building can be found "digitally" as well. You see, the way in which occupants search for buildings today has changed. Rarely will an occupant drive through an industrial area these days and jot down phone numbers from signs. More typically, an occupant will conduct a Google search of "available buildings", or a specific address, etc. If a vacancy cannot be found digitally, a vacancy may stay that way...vacant! So does your vacancy have a "digital footprint"? Try this simple exercise...conduct a search for your vacant building's address in your favorite search engine...Google, Bing, You Tube, Yahoo, etc. See what comes up on the first page. Below, I conducted a search for 500 S. State College in Fullerton, California, a building that we are actively marketing, and here are the search results:

Any occupant searching for this address will find information on Loopnet, Postlets, and a virtual tour on YouTube. The Loopnet listing costs...the others are free. Recently, I posted about social media marketing for CRE that really works. Postlets, now owned by Zillow, is a free way to create a digital foot print of your CRE listing. Make sure that your engaged agent has created a Postlet for your vacancy. The below screen shot shows the landing page of the Postlet for 500 S. State College:

A searching occupant can fully research your vacant building (including a video virtual tour) without leaving the office...OR if they are mobile...the research can be conducted on a pad or smart phone. Video is one of the BEST ways to get your vacancy noticed in the digital world. We recently accepted a listing engagement on a building in Irvine that has been on the market for several months. One of the strategies we employed was the creation of a digital footprint. I am pleased to say that after only a week, the search "results" for 28 Hammond are remarkable...largely due to the creation of a simple virtual tour on YouTube:

Some occupants insist upon driving through commercial areas to look for vacant buildings. Make sure that somewhere on site...on the banner or sign...or on the front door, your engaged agent creates a QR code with the video footage above embedded in the code. The visiting occupant (or cooperating broker) can scan the code and gain helpful insight into the vacancy. You can scan the code below and see how it works. This is one of the ways in which QR codes really work when marketing vacant buildings.

Creating a digital footprint for your vacancy may secure a tenant or buyer for your building quicker than you can Google "done deal"!

Friday, May 11, 2012

I Sold (or am selling) my what?

I provide location advice to owners and to occupants of industrial buildings in Southern California. The media today is filled with news of mergers and acquisitions...probably more so than anytime since the middle of the 2000s. This trend is witnessed by business owners big and small. So let's explore the circumstance of a sold (or soon to be) business and the disposition of the location(s) that the business occupies. As my commercial real estate practice centers around industrial properties, I will assume that the occupant is a manufacturing or distribution company. In order to frame my discussion, I will look at three scenarios of location sold, location is leased long term (more that two years); business sold, location is leased short term (fewer than two years); business sold and location owned by the business owner.

Business sold, location is leased long term: Chances are that the purchaser of your business considered the location and the remaining term of the lease. If the purchaser opts to occupy the location, generally, an assignment of the lease obligation should be requested. Any options to extend are personal and typically cannot be assigned, however. Also check and see if any personal guarantees of the lease's performance can be vacated. Generally owners of locations want as much security as possible in the performance of the lease, however, if the purchasing entity has a larger net worth, sometimes owners will vacate previous personal guarantees. If the purchaser does not intend to occupy the location, you as the occupant must deal with a term of lease that must be satisfied...without the benenfit of a business to generate income. Some owners are happy to work with an occupant that is paying a rate substantially below market. This hasn't been the case for several years as lease rates have declined. Please address the lease term (and the resposibility for it) in your letter of intent.

Business sold, location is leased short term: This can be tricky if the owner of the location believes that the occupant has such an investment (distributed power, AQMD permits, ISO 9002 permits, paint spray booths, offices, freezer/cooler space, conveyor systems, etc.) in the location that moving would be too costly. The owner may attempt to negotiate a higher than market rate assuming that a move would be too costly. Be well advised to determine the buyer's desire to stay in the location and attempt to negotiate an extension. Otherwise, your buyer may negotiate a lower price for your business based upon the uncertainty of the occupancy.

Business sold, location is owned by the business owner: Frequently in closely held businesses, owning your location can make a great deal of sense. You fix your location costs and you control the occupant (it is your company), you benefit from the location's appreciation, and there are some potential tax benefits individually. I explained in great detail the characteristics of a company that should own its location in a previous post. You can click here if you are interested in learning more about those characteristics. When you sell the business that occupies the location (even if the purchaser of your business signs a lease with you), the question you ask should be, would I want to own this location if it were vacant? Remember when you were the occupant and the owner, the dynamic is different than being the owner but not the occupant. You are now an investor who must compete with many other investors for your tenant's occupancy...are you prepared for that potential risk? As explained in a previous post, the cost of originating a new lease is staggering. If the answer is no, then there are steps that you can take to minimize the risk of owning a vacant building. First, analyze your location's monthly carrying costs...debt service, taxes, insurance, common area maintenance, miscellaneous maintenance, etc. You should maintain a 9-12 month cash reserve of this total amount. Second, determine how marketable the vacant location is. A location advisor familiar with the current market can provide this for you. How many vacant locations similar to yours exist? What is the current appetite (including market time) for such a location? What is the current vacancy rate for locations such as yours? yours specifically...not a market wide vacancy of all locations. How special purpose is my location? Third, determine what the location is worth to an arm's length investor with the new lease. This amount less any debt owed against the location and less any closing costs of sale (net of any taxes) determines the proceeds that can be deployed into an alternate investment. If you choose to deploy the funds into another real estate investment, the gain may be tax deferred if the upleg purchase meets certain criteria. You may be wondering why you would sell one piece of real estate only to buy another? The simple answer is to lessen the risk. By selling a special purpose single tenant location and investing in a general purpose multi tenant location, the management is greater but the downside is more  manageable...ala selling stock in a single company and buying a mutual fund of many companies.

Pay attention to the disposition of your location(s) and you will be glad that you did!