3 Independent brokers share strategies for competing in todayâ€™s market.
By Stephanie Bell |
Working solo was the right career move for Benedict J. Frederick III, CCIM. “I love what I do. Work is not work. I just get to have fun all day long,” says the founder of Ben Frederick Realty in Baltimore. Working independently also requires Frederick and other solo practitioners to narrow their focus and maintain manageable workloads, which may mean passing up transactions beyond their areas of expertise. But for most, the independence is worth the trade-off.
To be competitive, solo brokers must employ strategies that multiply their talents and expand their reach. From mastering today’s technology to using flexibility as an advantage, these CCIMs have taken three important steps to make their independent companies successful.
1. Pick a Niche
While trying to be a jack-of-all-trades is admirable, focusing energy in one sector can help commercial real estate professionals concentrate their skills. “I dominate my market niche, consistently selling between 25 percent and 60 percent of the apartment units in the five target neighborhoods where I work,” Frederick says.
Frederick specializes in apartment buildings and investment properties in historic Baltimore neighborhoods. The properties are smaller than the transactions most large companies handle, but too large and complex for residential brokers. To compete, Frederick “sticks with his niche and avoids the temptation to deviate and be all things to all people,” he says. As a result of focusing on one sector, Frederick generally sells between 19 percent and 22 percent of the multifamily properties in his market whereas other full-service brokers average about 5 percent, based on his own analysis.
Working within a particular niche also has been a wise strategy for Thomas F. Campenni, CCIM, owner of Thomas F. Campenni Co., in Stuart, Fla., who specializes in family-owned real estate holdings. “I offer my clients property analysis, real estate brokerage, full-service property management, and other consulting services,” he explains. Campenni also has created a strong network of local related-service providers that includes attorneys, accountants, and bankers. When his clients need advice and guidance in these areas, he refers them directly to colleagues he knows and trusts.
Mahnaz Khazen, CCIM, president and chief executive officer of Commercial Bay Real Estate Investment Services in San Jose, Calif., says that focusing on small to midsize investors was the right niche for her company. “Small commercial brokerages can provide flexibility to work with investors’ specific needs. In many cases, I am able to find the right size and type of property for a small to midsize investor that a large company wouldn’t know about,” she says. Khazen finds that small investors also need education and consulting, and large companies often don’t devote adequate time to assisting them.
2. Build Client Relationships
Providing top-notch service to build strong client relationships is another important key to creating a successful solo brokerage. “[Clients] don’t care how much you know, unless they know how much you care,” Frederick says. “My experience allows me to work with clients and truly get into their heads to understand their needs,” he says.
Anita D. Risberg, CCIM, principal of A.D. Risberg Commercial in Salem, Ore., agrees that clients like it when their relationship is with the individual broker and not the company or assistant. To maintain strong relationships with her clients, Risberg takes extra steps to ensure they benefit from her expertise.
For example, Risberg recently had a client who wanted to sell an 11,000-square-foot retail store at a busy intersection in Florence, Ore. Even though it was a small property listed at a high price, Risberg found a developer who was willing to pay the $1.5 million asking price, which isn’t usually the case, she says. Tapping into her well-developed network, Risberg knew the right people to contact so that both sides of the transaction were able to benefit from the outcome.
When looking for properties for clients, Risberg goes beyond local listings. In fact, 75 percent to 85 percent of her transactions are off-market deals, she says. Risberg often works with a title company to find a property’s true market value and seeks out the right fit for her clients. For one client, she searched for a suitable 1031 replacement property and found six options that weren’t even listed. “My clients prefer that I do this because there is no competition from anyone else. Plus, this way, I make sure that the deal is fair,” she says.
Communication is another critical part of Risberg’s approach. She lets her clients know exactly what she is working on and when the task will get done. “I don’t like to leave clients hanging,” she says. Therefore, she recommends always following up and keeping clients informed.
For Susan H. Lawrence, CCIM, vice president/marketing of Real Estate Strategies in Orlando, Fla., making sure her properties look good and seeking additional ways to add value are important client-service tenets. “If selling an improved property, I will have it pressure cleaned as well as the landscaping, signage, and general cosmetics improved,” she says. Lawrence also thoroughly reviews properties to find non-leasing income streams such as antennas, kiosks, and nighttime parking rental. She also creates a comparison of leases to the current market for clients.
Campenni devotes similar attention to his clients, providing personalized service that is rare in today’s technology-based environment. “A unique feature of being one of my clients is that when you call the office you will speak to me personally, instead of staff who aren’t authorized to make decisions or take action,” he says.
3. Use Your Network and Education
Solo brokers also can leverage strong professional networks and industry education to build their businesses. Terry L. Conley, CCIM, president of The Location Connection in Cassville, Ga., draws clients in and differentiates himself from the competition by stressing his education and expertise. “My background includes reading hundreds of leases, managing hundreds of retail locations, reviewing thousands of sites, and working in most of the major markets,” he says. Because of his diverse experience, Conley markets his knowledge when consulting with corporations that are looking to locate in a specific market or at a particular site.
Michael Madden, CCIM, owner of Gulf CoastLand.com LLC in Gulfport, Miss., who has been a solo practitioner for 10 years, finds that not all clients and colleagues are comfortable using an independent broker because of the misperception that affiliation with a large company equals more experience. However, solo brokers can use their in-depth knowledge and education to their advantage.
For example, Madden recently made several attempts to reach an agent at a national brokerage, but kept getting an assistant each time he called. It wasn’t until he mentioned that he was a CCIM that he got anywhere. “As soon as you say you are a CCIM, the gates are always opened with a flood of information,” he explains.
Madden also finds that teaming up with other CCIMs increases business and visibility in his market as well as other markets in the area. “CCIMs working at the big chains are a huge asset to me as they’ll break through brick walls to do deals with other CCIMs,” he says. This has led to CCIMs calling when they need information about Gulfport’s land and apartment markets, his areas of expertise.
Lawrence also finds partnering with other brokerages to be a lucrative strategy. About 50 percent of the time she works with other companies that represent the buyer or seller in a transaction. When she takes on listings outside her areas of expertise, “[I] co-list or refer if I happen to have a lot of confidence in the person assigned to handle the referral,” she says. “Some firms contact me routinely looking for these situations, as they know I don’t get involved in one-off transactions. This allows me to make on-the-spot deals with other brokerage firms,” she explains.
Wayne D’Amico, CCIM, president of Property Politics in Essex, Conn., also recently co-listed with another CCIM. Since he is independent, D’Amico was able to create a mutually beneficial business relationship, without the concern that “I wasn’t part of their national or franchise brand,” he says. “In the end, clients win because they get the right team for the job, not just the team that happens to work for the company they initially called.”
These three strategies can help solo practitioners find the right path to success, but like anything, independence has its drawbacks. “Being a solo practitioner is a double-edged sword,” Risberg says, explaining that it provides a lot of freedom, but also requires maintaining balance among the day-to-day business activities.
Ultimately, the rewards far outweigh the challenges for most independent practitioners. “The advantage of remaining solo is that I can capitalize on whatever opportunity arises on my own terms,” D’Amico says. Other solo CCIMs enjoy ample amounts of freedom, not having to report to a hierarchy of bosses, low overhead costs, and as Frederick explains, “It’s a big ego boost to have my own name on the front door.”