Let's face it, in the commercial real estate due diligence world, there is no shortage of contacts in a given deal. For every deal, we have a buyer, seller, lender, insurer, attorney(s), property manager, and many others. How does your firm capture and track this information? What value does this information have (or what are you missing out on if you don't collect and track it)? After the world changed in 2007/2008, many of our long term clients have found new opportunities with new firms. If your firm does 20 transactions a month and you capture 10 contacts per deal, that equates to 2,400 contacts in one year! It takes dedicated staff time to collect this information and a robust Client Relationship Management (CRM) software tool such as Salesforce or share ware like Sugar CRM. As you populate your CRM, you can use it to do email campaigns, keep notes on specific client hot buttons, and see who else they may introduce your firm's services to. One other incredible tool is LinkedIn for user groups of interest, updating your client contacts, recruiting, and recognizing who may have worked with whom. LinkedIn communicates with other software CRM tools to update records for those individuals who use LinkedIn and is a great way to keep your data set up to date. LinkedIn Personal Plus is also a fabulous way to find qualified candidates in any geographic region and learn who they may have worked with through their connections.
I have read marketing statistics which indicate the regular use of a CRM (collection, verification, and emailing) can grow revenue by 5% to 10% or more, but remember, "Garbage In. Garbage Out (GIGO)"! Good luck with building and maintaining your CRM!
not sure exactly how much it is to rent an apartment at this place. Probably not appropriate for contest, but maybe an honorable mention?
Wow! Where did that year go? I haven't blogged in almost a year, but I have an excuse! 2010 was the busiest year in our firm's 10-year history with more diversity of clients and more reasons for performing environmental and engineering due diligence and asset management. I'd like to highlight a few trends we are seeing from 2010 and building on in 2011:
We all sell services and expertise (not products) so the last bullet on hiring qualified and talented staff is paramount to position your firm for 2011 or as I refer to it......"dessert" after 2010. The "thaw" and the beginning of new opportunities in 2010 which were discoverd out of necessity from 2008/2009 will really make 2011 a good year for our industry. We are seeing CMBS come back with new players (JP Morgan is big right now), development and lending is beginning to thaw, our clients are more aware of maintaining the value of their asset through maintenance and addressing environmental issues before disposition, and firms in general have become more efficient in delivering their services. This is making me hungry.........What opportunities does your firm see in 2011? More on how to maximize these opportunities in my next blog entry. Happy New Year!
Has anyone had experience with friable ACM in ceiling texture and multi family properties regarding equity investors being wary of buying properties with this issue due to potential tenant exposures (even though they are notified about ACM in the lease and w/annual notices)?
We are all aware of the turmoil in the CRE markets for the past two years and how that has impacted all A&E firms in some manner. I would argue that there is a tremendous amount of technical talent (and business development experts) available now whether they may be currently unemployed, underemployed, or "looking" but employed (see "hiring in a down market"). We can all recall trying to hire anyone a mere 3-4 years ago and how difficult and expensive it was. I would argue that some of those hires didn't make it through these tough times because they were overpaid or unqualified for their position.
There have been many hiring managers who feel that the people that are unemployed now are not the best candidates available, however, many firms are suffering badly and those who are unemployed may have been the victim of a poorly managed firm. For those who are still employed, but "looking", rest assured the candidate will do his or her due diligence on the hiring firm as well, which is not a bad thing at all. There may be some real dialog now between a prospective candidate and the hiring firm that would likely have been absent had the economic downturn not have happened. This dialog may bode well for finding a great fit and a long term employee and potential future owner even.
Best of luck to all in 2010, but hiring the right people in a service industry like the A & E business is absolutely the key to long term success and client satisfaction. Please share your hiring strategy for 2010 if you would by indicating if you are looking to hire, and if so, what skills are you looking for first (business development, technical, manager, etc.).
Good hiring practices and successful hires are the only way to do more with less.
After reading Market Maven's blog on Nov 12, I was encouraged, yet skeptical, we are seeing a true "trend" in CRE activity. I'm almost a convert as we have seen the following activity increase in the following specific areas:
-Pre-bid due diligence for purchase of CRE at bank auction
-Stimulus impacts and legislation (pending) in Low Income Housing (LIHTC) and New Market Tax Credits
-Strong GSE volume in Fannie, Freddie and HUD/FHA
-Asset management capital improvements prior to a planned disposition
-Lenders looking at their entire portfolio and "rebalancing" reserves to reflect current deferred maintenance conditions
In aggregate, volume and revenue is still lower than 2007/2008, however there are signs that we're close to the bottom in some asset classes and that the "extend and pretend"/"delay and pray" tactics of large lending institutions is running out of steam and banks are looking to cleanse the their balance sheets in a legitimate manner.
If these trends hold and we don't experience the "typical" slowdown in transactions in January and February, I think we can all agree there is something to be Thankful for this Thanksgiving.
In these uncertain times in Commercial Real Estate, many firms must find ways to reinvent and rebrand themselves to their existing clients and new opportunities. Many of us perform Phase I Environmental Site Assessments as well as surveys for radon, lead-based paint, and asbestos; but how do we tell our clients that our firm's way is different?
I read about many firms in our business slashing their marketing budgets or cutting the marketing personnel, but this is precisely what they should NOT be doing. Firms need these services more than ever, whether it is done in house or subcontracted out to a provider of marketing services. Your clients and colleagues need to know why you are in this business and what drives you as well as why your services are different than firm XYZ. In our experience, price was not the driver in most cases, it was the understanding of the client's needs, the responsiveness, communication, and follow up that ranked as most important.
As far as cost, there are limitless "cost-free" options available to us all on social networking sites, blogs, email blasts (low cost) and electronic newsletters, we simply must make the investment in time and producing something of value each time we communicate with our network (i.e. clients, colleagues, peers, vendors). Communicating value and why we are different from one another is a true challenge and takes some adept creativity and writing skill. I would welcome the opportunity for our group to provide some examples of how they communicate and deliver value to their organization and clients.
Given the lack of deal activity, our firm took advantage of the $599 Jet Blue "all you can jet" promotion this month to visit as many clients as possible to get their thoughts on what deals make sense and when they intend to re-enter the market on the buy side. Our rationale to do this was that we could see what the 4th Q of 09 and 1st Q of 2010 may bring with a personal visit to each client for a modest price. The market data they provided was extremely helpful for our firm in terms of what deals make sense to people and what the various reasons to sit on the sideline may be during this time.
One equity investor on the multi-family side indicated that debt is still cheap if you can get it, and while a property may have flat rents and declining occupancy, the cost of the debt may make up for some of that if one anticipates high inflation over the next few years. On the debt side, investors can only place loans with Freddie Mac, Fannie Mae, and HUD/FHA due to the absence of CMBS product and traditional bank lending.
Most multi family investors are not going to market with their properties unless they have to due to liquidity issues as the pricing is too low still. In addition, value-add investors are having trouble with deals as there are no paybacks on improvements to units given the concessions given by landlords in most markets, flat rent (or declining in some), and higher vacancy rates (going from 5% to 15% in some markets).
Public multi-family REITs may be the first to become active as they have the cash to close deals, however most investors say they have to screen 300 deals to get 5 that may be worth doing, closing on maybe one out of 300 they review. Some owners are taking this time to do capital improvements/asset management with short pay back periods like boilers and windows due to the fact that they anticipate retaining the asset for a longer hold period and they actively market these improvements to existing tenants and prospective tenants as a means to retain occupancy.
The information gathered in the 15 to 20 client meetings we had over the past week validated where the activity is in the market and gave some indications as to what may make equity investors in multifamily re-enter the market, make a capital improvement, do a refinance, or alter their leasing strategies. This real-time feedback from our clients will be invaluable in year end planning and 2010 staffing levels and locations. Several clients indicated their other consultants had not been to visit them during the down time and appreciated the interest our firm showed in their business model and their own staffing challenges during this tumultious time in commercial real estate.
While technology is an invaluable and useful way to interact with your clients and get them information quickly, there is absolutely no subsitute for an in person meeting to have deeper conversations and to learn more about your clients objectives. The downside, I must say, is the red-eye return from the West Coast as I've run out of steam in JFK this am to write any more. I would love to hear your personal accounts of how face to face client meetings have elicited information that you could not collect elsewhere and helped your firm solidify your relationship with that client or introduce you to new opportunities if you can share with a comment below. Thanks for listening/reading......
How many of your clients have converted their "deal" or acquisitions team players to asset managers to ride out this storm?
Many real estate equity firms and lenders do not want to lose key personnel during this downturn in the marketplace and have openings in asset management due to the inability to shed assets and/or increase in deferred maintenance on the part of owners and borrowers alike. The advantage to these firms is to retain key members of their team and to cross train them in another area of the firm's operations. The downside is that asset management is an entirely new job and new perspective on the asset/deal, and a consultant can play a key role in advising the asset manager on the maintenance and compliance (e.g. Affordable Housing compliance) of the property for disposition/sale purposes.
See Dianne Crocker's Commonground blog entry, and you can see that our clients may act as asset managers for quite some time, and now is our opportunity as consultants to cultivate that relationship from the start. You can begin the discussion by offering to provide asset management training or a brown bag for the client and introduce your firm's services and potential custom IT solutions (such as a relational database) or off the shelf asset management tools that may be helpful in their new role. The consultant may have institutional knowledge of the portfolio from working with the acquisitions people over the years and is an invaluable resource to a new asset manager.
Consultants are uniquely positioned to view the entire real estate cycle and not just the front end, and it is this experience our clients will appreciate as they assume more asset management functions.
Our respective firms have an abundance of talent, no question, but what can we do as firm leaders to maximize their potential within the firm and for our clients? I recently read Five Minds for the Future by Howard Gardner and wondered whether our firm has people that are trained to "think" and not just "do"? All five of these "minds" are key to a successful professional development program as measured by positive outcomes.
I would encourage firm leaders to think about these "Five Minds" when they are providing professional development opportunities for their associates to determine what the potential for a successful outcome may be. Looking at professional development in this manner is a long-term view and removes "what" a person may learn, but rather "if" the person has the disposition to learn a new skill set; that is, how do they learn best?
We tend to think of only the "Disciplinary Mind" when we are planning professional development opportunities. In other words, the mastery of a technical subject. We discount, or may even not consider,the "Synthesizing Mind" (or the "big picture") which is a person who has the ability to understand and recognize inter-disciplinary relationships and communicate these relationships to a group in an effective manner (sounds like "consultant" to me?). There is also the "Creating Mind", maybe your firm has a technical person that could help in the marketing or proposal groups due to their innate creativity or abilty to think "upstream". They don't try to answer a question, they ask themselves if they even have asked the right question to begin with. We also need people that have a "Respectful Mind" and understand custom and differences between groups and varied objectives (e.g. the clients' perspective and the regulator's perspective may differ greatly). And finally, the "Ethical Mind" which is a very desirable trait in the sense that it keeps our firms out of legal trouble and ensures that conflicts are disclosed in an appropriate manner.
Gardner argues that we should surround ourselves with lifelong learners and provides valuable guidance for those charged with training and developing organizational leaders. I would argue that our firms growth is dependent on hiring people with these skill sets and we must recognize what will maximize someone's development based upon how they learn.
What criteria does your firm utilize to promote and develop individuals within your firm?