The Real Estate Expert: Organizational Hat

Continuing my series about the different attributes of a commercial real estate agent, I want to talk about the organizational aspects of a transaction. If you remember, a few weeks ago, I told you about the marketing mind of an agent. We discussed the standard of care (if you will) and additional marketing features that might help promote certain properties.

This posts is about orchestrating a transaction. Notice that I used the word orchestrate instead of organize since looking at most realtor's desk the last word that comes to mind is organized. I used the word orchestrate because at some point the agent has procured a transaction to be placed under contract or under review (lease). At that time it is very important that the agent place himself or herself as the hub of information flow. During the contract and due diligence phase of a transaction, many new professionals enter into the picture. Those include architects, lawyers, title underwriters, surveyors, contractors, and bankers to name a few. All of which are vital to the closing of a successful transaction.

During this time of fulfilling obligations set forth in the contract and testing certain properties of the site, organization is key. The agent must be knowledgeable and equipped to gather and distribute information in a timely manner to the right people. The agent is also expected to understand what is required to satisfy the contract and reach the closing table without unnecessary delay.

In addition to the normal package of items required to close that are pretty much consistant in most transactions, some deals have unique or unusual items. For instance, investment properties require subordination agreements and estopples from tenants, or new construction needs certificate of occupancy before a tenant can move in.

In summary, it is critical to be organized during the contract phase of a transaction. I timely and satisfied contract makes it MUCH easier to reach the closing table with a win/win attitude from all parties involved.

52% Hit (in the stomach), Birmingham Alabama

Birmingham area commercial sales volume down 52%! The Birmingham Business Journal reports that the total volume of closed sales in the first four months of this year are half that of the first four months of 2008. Argh! Thanks to our loyal clients and diligent agents I know of at least one deal of the "dozen or so" over $1M was generated by Coldwell Banker Commercial.

Source Article

Birmingham Politics: One Man's Defeat is Another Man's Victory

I'm sure you've heard that one man's trash is another man's treasure. Many smart businesspeople have made fortunes of turning trash to profit.

Well I'm not going to discuss trash or treasures, but rather victory and defeat. You can't have victory without someone being defeated and you can't have defeat with a victor. This week in the final sessions of the Alabama State Legslitature a bill written to renew the Jefferson County occupational tax failed to pass. The existing bill and it's proposed replacement is designed to tax the workers who are employed in Jefferson County (Birmingham).

Why this tax must have been implemented in the first place? Why tax employees when they pay sales taxes on goods and services during the work week or their employee pays business taxes on licensure and or profits? Furthermore, we all know that to keep good employees the employer within Jefferson County has to compensate for the occupational tax anyway by higher wages or footing the bill itself.

With a little common sense thought, it doesn't take long to come up with a reason for the tax. Jefferson County was loosing residents (property tax revenue) to neighboring counties like Shelby and St. Clair. Instead of fixing the problem or the reason for the flight out of Jefferson County, county leaders chose to tax those who work there. So let me catch up here... No solutions just new bills to compensate. Okay.

By the way, we know it's not the entire county that's a flop since within Jefferson County there is some of the most desirable cities in our area if not region.

So you're a commercial real estate guy where's the link you ask. For years, I have noticed commercial agents advertise their properties with the benefit of "no occupational taxes". Many of which were located just across the border of Jefferson County. If this is an advertising point, it must be a big deal to businesses looking for space and maybe a deciding factor.

Well, let me turn this one around Mr. and Mrs. County Commissioner or Employee of Jefferson County who desprately wanted the tax bill to pass, you might be eliminating one of the deterrants of new business in your district. Woah! What a tought, reduce a tax, encourage business growth, more sales and profit, more tax.

In honor of fair reporting, why might the occupational tax be reasonable. Well, Birmingham is the hub of most commercial activity. The hub serves as the driving force behind axial growth beyond the county boundarys. Therefore there are some who use the commercial benefits of the city center, but don't pay their share of tax to keep it up i.e. streets, sidewalks, sewer, and etc.

Hence, a tax on the workers in the jurisdiction would generate the needed income to keep the services up that the commercial users depend on.

So in conclusion, only time will tell, but maybe this tax reduction will help make the city center aka Birmingham stronger for it's employees or it may put Jefferson County in bankruptcy.

The Real Estate Expert: Marketing Hat

As realtors we wear many different hats to serve our clients. Sometimes we wear our analytical hat, while other times it's the organizational one. Maybe it's negotiating, planning, or managing as well as many others. Today I'm going to talk about marketing. When I'm wearing my marketing hat I am thinking about finding a prospect to fill a need of the client. I am going to speak from the agents perspective, but if you are an owner and don't use a realtor, you can still apply.

First, each project we market is different. Period. I along with our staff develop a plan that is unique to each site wheter it's for lease or sale. I goal of the plan is to do those tasks that have the highest probablity to locate the desired prospect.

To make our processes more streamlined we do have a baseline group of tasks that we do no matter what. Some of those include, internet advertising where prospect usually go for infomation, create a take away piece to leave with prospects, and signeage for most cases.

The next step is to identify those tasks that might be uniquely beneficial to a certian site. That may include:

• Gap analysis
• Broker luncheon
• Direct mail
• Postcard campaign
• Targeted business lists
• Helieum Balloons

The sky is the limit and this is where we have a little fun trying to figure out the best ideas.

So what do you think you can do will have the best opportunity to show your offering to a prospect? Also ask yourself why you think it will be effective. Have you identified a targeted group that is appropriate for your space or building?

Finally, don't be afraid to try something new. Some of the simplest ideas have been very effective. For example, we started putting flyer boxes on some of our properties. Residential realtors have been doing this for years, but few commercial agents understood the value of immediate information in the prospect's hands.

Every project big or small needs a plan and measurable objectives to be met. Once you have organized your campaign, you are on the way to a successful transaction.

Alabama Labor Employment (non-farm)

The Real Estate Expert: CAP Rate is a first year return or yield

Okay so I'm done with the housekeeping for a while, but I wanted to share with you a quick note. Today I had lunch with a buddy of mine that is also a blogger. He's recently hooked on to the tribe of followers of this site. Anyway, today he was giving me a critique of the blog. He said that he liked the blog but was confused about all the info. He said, "you sound really smart".

Well, thanks! That's one of the points. Sound smart. That way, those who read might one day need my brokerage service. Really though, the goal is not primarily to "sound smart". This blog was started to inform the community of brokers, users or real estate, and investors about trends and market events related to real property. I didn't imagine that someone not knowing the real estate lingo would find there way to the site.

That said, in addition to the figure filled market analysis and nerdy lingo, I intend to have a few "beginner" posts every now and then. Heck, even the pros need a lesson in the basics occationally.

Jonathan, thanks for the insight even if you didn't mean to!

Housekeeping

Hey ya'll all is well here in Alabama. The sun is warming up and on the border of being HOT. When it's cold, we want it to warm up, and when it's hot, we want it to cool down. The moderate seasons just seem to go by too fast.

For those of you who are new to the group, I post about commercial real estate and many times specifically about the Birmingham, Alabama market. I usually update posts once a week, but to save you time, subscribe me to your RSS feeder. I've got a link to the right here and I think it is compatable with google reader, bloglines, and many others.

Thanks for your visit.