4 Key Aspects to Your Marketing Plan
After winning a new listing, the first step in any CRE marketing plan is to build a commercial real estate marketing package. But if you go on Loopnet or pull up some random marketing email blasts, it’s amazing what some brokers try to get away with. Most commercial real estate marketing packages are really bad, especially considering that their purpose is to market properties worth several million dollars. To help remedy this situation, this post will discuss how to build a highly effective commercial real estate marketing package.
First of all, why does creating a great commercial real estate marketing package matter so much? There are literally dozens of reasons, but consider just a couple:
- You’ll get more offers. A high quality commercial real estate marketing package will increase your chances of actually selling your listing. Improving your offering memo and listing flyer will result in more attention and therefore more offers.
- You’ll differentiate yourself. Since the primary job of a marketing package is to generate interest in your listing, you can use the marketing package to set yourself apart from other brokers. You are being hired to market and sell property after all, and your marketing package is a direct reflection of your marketing capabilities.
Designing Your Commercial Real Estate Marketing Package
Yes, the design of your marketing package matters, but there’s no need to go overbaord. Your design needs to be professional and modern, but it doesn’t require a team of professional designers. After all, the most important part of your marketing brochure is the content, not your design skills.
With that said, don’t skimp on the design either. Invest in some good offering memo templates that you can update and modify yourself. Offering memo templates can be created in Microsoft Word or Adobe InDesign, which will allow you to use the same template over and over again without reinventing the wheel each time.
Make it Easy
Every investor has a set of deal parameters and they are looking for properties that meet their needs. Your goal should be to make it easy for investors to filter your listing through their criteria. We are all overloaded with information, but your marketing package should make it very easy to get the deal points quickly.
Tell a Story
In addition to making the high level deal points easy to find, telling a good story is the key to a great commercial real estate marketing package. Your marketing package should contain more than just a set of facts. It should persuade the reader to learn more and ultimately make an offer.
Every listing has a story and it’s up to you to tell it. How do you do this? Consider a half-leased property in a secondary market. What’s the story behind this sale and why should a potential buyer be interested? Perhaps the high vacancy is due to mismanagement and the new buyer could dramatically improve the occupancy. This story turns what looks like a problem asset into an opportunity for a saavy investor.
Create a Hook
What’s the hook? In marketing this is often called the unique value proposition or the unique selling proposition. What’s unique and desirable about the property you are selling? Does it have a diversified mix of credit tenants that provide rock-solid income? Is it the only property located at a major intersection?
Every investor has a set of criteria that they filter potential properties through. Some investors need stable income, others want a certain type of tenant, or a certain number of tenants, or sometimes it’s a particular property type or location. The point is that potential buyers already have an idea about what they are looking for. The purpose of the hook is to find people who want what you are offering, and then pull them in to learn more about the story behind the property.
Include the Right Marketing Package Elements
- Cover Page – This section of the commercial real estate marketing package should include a photo or aerial of the property and possibly some high level deal points such as cap rate, price, and the property address. A common pitfall to avoid here is to try to promote yourself too much as a broker (or your firm) on the cover page. The purpose of the package is to promote the property, not yourself, and the cover page should reflect this.
- Disclaimer – Virtually all packages now include some sort of disclaimer that deems the information reliable, but not guaranteed. It’s easy to see what kind of language other brokers are using in their packages, but as with all legal matters, consult a good attorney.
- Project Highlights – This section is where you include a series of bullet points highlighting major aspects of the property. You want to quickly convey the deal points here, but only at a high level. You’ll have plenty of time to fill in the details in the following pages.
- Aerials – It’s relatively easy to get aerials from Google Earth or similar programs today, so there’s no reason not to include them in your package. Sometimes buying aerial photos directly from an aerial company will give you higher quality and more angles, which could help you better position your property. Either way, aerial photos are a great way to show where your listing sits relative to highways, retailers, etc. To make these elements clear, you can label your aerial photos with arrows and text boxes.
- Maps – The maps section usually includes at least two maps. First, a larger map should be included that shows the location of the property relative to the rest of the city. This is more of a high level overview of the area. Second, a more detailed map with a higher zoom level should be included to show local roadways, nearby intersections, and adjacent buildings.
- Photos – Great, professional photos can really add a lot of “pop!” to the package. Going the extra mile to snap some high quality photos can do wonders for a marketing package. At the same time, there is no need to include photos of every nook and cranny. Spend some time taking a few high impact photos that entice the reader to learn more. Just remember not to go overboard. As a side note, a nice benefit of not including too many photos is that your PDF package will be smaller and therefore load faster.
- Rent Roll – Assuming your package is for an income-producing property, this section should include a full rent roll that provides accurate information for each tenant. Some of the following are important elements to include: tenant names, rentable square feet, rent per square foot, lease start date, lease end date, reimbursements, schedule of rent increases, renewal options, totals and/or averages for each section. Additionally, including notes on each lease agreement and background information on each tenant is also helpful in many cases.
- Projections – The financial section should include a full proforma showing projected net operating income over a specified holding period. This section should also include some narrative about the assumptions that went into your cash flow projection. Additionally, you can include a complete discounted cash flow analysis, financial ratios, sensitivity analysis, maximum loan analysis, and any other projections which a potential buyer may find helpful. An important part of presenting financials for a listing is to keep it simple. Whenever something might become complex, make sure to include a narrative explanation or some footnotes.
- Area Description and Market Data – This section is great for describing the advantages of the region. You can include employment trends, demographics, an economic base analysis, major employers in the area, population growth figures, as well as some data on local rent and vacancy trends.
- Broker biography – We made a note up above that the purpose of the package is to promote the property, not you as a broker or your firm. With that said, including a section for you and/or your firm at the end of the package is more than appropriate.
The above sections should give you a good starting point for the core elements of your package. Of course, depending on your specific property you may add or subtract some sections. Other common elements to include are Parcel maps, floor plans, detailed building/construction information, etc.
This post is a good starting point for creating a great commercial real estate marketing package. The good news is that the bar is pretty low, so if you incorporate just a handful of the above elements, you’ll be ahead of the curve. Have anything else to add? Let us know in the comments below!
(info from Property Metrics)