Choose your own commercial real estate adventure

It is totally possible to choose your own career adventure.

Let’s identify what’s right for you from the almost infinite number of options that exist in commercial real estate.

Here are some of the categories to pick and choose from:

1️⃣   Sector (office, industrial, retail, health care, build-to-rent, child care, hotels, land, data centres, etc.)

2️⃣   Geography (country, state, city, suburb, estate, precinct, block, street)

3️⃣   Deal size (sub-$5 million, greater than $50 or $100 million, and ranges in-between)

4️⃣   Ownership (structure such as strata or freeholder, country of origin, private or institutional, etc.)

5️⃣   Industry (banking and finance, FMCG, government, life sciences, not-for-profit, professional services, technology, etc.)

6️⃣   Service line (Sales, Leasing, Property Management, Project Management, Valuations, etc.)

If you haven’t already, it’s time to select a specialty (or create one using a combination of the above) that you would like to be known for and in which you can become the market leader.

The overwhelming majority of the top 1% of earners in commercial real estate are specialists, not generalists.

Would you like some help with making the right choice, or just want to make sure you already have?

Check out episode 75 of CRE Success: The Podcast for all the help you’ll need.

Episode transcript:

Who do you think makes more money in commercial real estate?

A specialist, or a generalist? A jack of all trades or a subject matter expert?

Let's talk about it in Episode 75 of the show. My name is Darren Krakowiak. And I'm here to help commercial real estate professionals save time, earn more, and be top performers in their market.

Really excited to share with you some ideas on today's episode on how you can earn more in this industry. Let's get right into it today.

So, who makes more money in commercial real estate in this industry, this lucrative industry that we work in?

Is it generalists, or is it specialists?

Well, I think there's a reason why most commercial real estate service firms organize their businesses by sector speciality.

There's a reason why franchisors of commercial real estate businesses provide the franchise licenses by geographic patch.

And the reason why they do that is to allow their people to earn more by being true experts.

Now, some people can be a little bit scared of specialization.

They may feel that by specializing that they're limiting themselves in some way.

They're worried that maybe they're going to miss out on an opportunity that they would have otherwise got if they didn't narrowly define their patch.

But I think when you do the opposite, and when you have a very broad definition of what it is that you do, who it is that you serve in the market that you cover, you run the risk of not being able to cover any area, particularly effectively.

And you can often have too much territory to defend.

I think that it's a lot harder to be able to answer questions on everything, as opposed to having a very deep knowledge within a narrower band.

Now, I want to put one caveat on this statement that you're better off specializing than being a generalist.

And that is if you work in a very remote market, a very small market, and you may need to do a little bit of everything in order to survive.

Unless that's the case, you should have some level of specialization.

But what I want to share with you today is that you don't have to specialize in the ways that you may think you need to specialize.

For example, just going after office, or industrial or retail, or a certain service type like leasing, or sales, property management.

I think there are other ways that you can be a specialist. And I want to share some of those with you today.

But before we do that, I want to talk to you a little bit more about why specialization is important at different stages of your career.

So, if you're in the early stages of your commercial real estate career, I recommend specialization, because it's going to help you craft a more compelling message for your target audience.

And having a more compelling message and being able to talk confidently about a certain slice of the market is going to compensate for the lack of track record, experience and relationships that you have in those early stages of your career.

And I think specialization, then continues to be a good strategy, because as you progress in your career, you start to become known for something.

And if you can become so well known for something and so competent at it, you will start to be seen as a go to expert.

And when you're a go to expert in your slice of the market, that's when you're in a great position because people will start to approach you for advice.

You'll be the first to know about new opportunities in the market, you'll know about them before others, which means you're potentially going to be appointed without even having to bid for work.

And in circumstances where you do still need to bid, you've got the strategic advantage of having known about the opportunity before anyone else. So, you're still in a much better position to win the work.

So how do you get started with specialization? What do you need to do?

I think if you're going to try and be positioned as a go to expert, the first step of specialization is to make a commitment to know a certain slice of the market better than anyone else.

Now if you're in a really saturated market, you might think well the only way that I can know any part of the market or the only way I can know that market better than anyone else is through years of experience.

And that may be the case. But I think you do have the opportunity to narrow your focus, and to decide that this subset of the market is what I'm going to know better than anyone else.

So, a way to do this could be, for example, just to walk the streets of the market, that it is that you're going to target.

Get to know the buildings, get to know who's in them, get to know who owns them.

And when you've done this grind work, which is a little bit of hard work at the start, but it's easier to stay on top of the market, after you've done the hard yards of getting on top of it in the first place, then you're going to be able to have better conversations with the targets that you prospect.

And the work that you've done by walking the streets and getting to know the buildings, the owners, etc, will actually give you a list of prospects to start opening up conversations with.

It will give you something to talk about once you do connect with them, because of all that field work that you've done.

And having done the field work will give you confidence to speak with people with more competence, because you know that you've actually done the work that's required to position yourself as a credible expert in that market.

So, I did mention before that there are a number of ways that you can potentially position yourself as an expert beyond just looking at those three main sectors of office industrial and retail.

And I would say that, when it comes to those three mega sectors of our industry that you can also specialize within them.

When it comes to industrial, you could become a factory specialist.

When it comes to warehouses, you could really get into automation, you can get into refrigerated warehouses.

Looking at office, you could specialize in big shiny buildings in strata offices, in business parks, for example.

And when it comes to retail, of course, you can specialize in neighborhood centers, big box, strip or high street retail or big regional shopping centers.

So, outside of those three sectors, though, let's look at some other sectors that you can specialize in.

And some of them are actually right for the picking, I think because they are growth areas, which are increasingly investment grade properties. So, they've got great prospects.

As you're looking for areas to specialize in, we want to find areas that are growing potentially, and that perhaps are not yet saturated.

And I would put areas like health care, aged care, and childcare, at least in Australia into that category.

I would also look at hotels, pubs. Other venues like those resorts as an area. Golf courses is another one.

Multifamily as they call in the United States, which is more so called 'Build to rent' here in Australia is a category which is increasingly growing in Australia, but as always been a commercial real estate class in the United States.

Of course, there's agricultural land, there's development sites, and then there's just land itself.

So, there are a number of sectors that you can target when it comes to picking out a specialization.

Now, when it comes to geography, yes, you do need to have some limit to where it is that you are going to be targeting your efforts.

Now some people have the whole country is their area, or some people even look at Regions, but generally, it's within a country.

And you can go tighter than that you can, if you're in a really built-up area, you might decide that this city block is going to be my area of specialty, or it might be a certain suburb or a certain estate, etc.

So, understanding the geography that you're targeting the sector or sectors, deal size is another area, whether that's in terms of the number of square meters or square feet of the asset, or in terms of the values.

So, the typical values that people look at 1,000,000 to 5,000,00.

5,000,000 to maybe 20,000,000 to 50,000,000.

50,000,000 to 100,000,000 and over are the sort of deal sizes where people are typically targeting.

And you could even go within a narrower band, and then sort of stretch yourself beyond and below the band that you initially pick in order to grow into a bigger slice of the market.

You're going to look at ownership structure. So, strata, for example, or freehold, or leasehold is sometimes relevant in some markets.

You can look at the client type, so we're looking at local investors or foreign investors.

Here in Australia, the prominence of Asian investors means that there are many successful commercial real estate practices that target Asian investors or even target specific countries within Asia, so mainland China, for example, or Malaysia, just to give you a couple of examples.

You might look more at institutional owners or private owners or syndicates, or maybe you're looking at government.

If you're dealing with tenants, you could look at different industries of the clients.

So, technology, I've seen not for profit being really well targeted. I used to really like targeting the banking and finance sector when I did tenant representation.

Lawyers are another area that you could target professional services more broadly.

And of course, there is the service line. So leasing, sales, property management, etc.

I think if you're able to identify a specialization that you want to cover, which is potentially underserviced, where you believe you can become a market leader, because of the characteristics of the market, because your own characteristics, or because of your interest in that market, then that's a great area for you to look to target.

You can combine different specialization categories that I've already mentioned.

For example, you might decide that I'm going to target Asian investors who are targeting between $5 million and $20 million.

But you don't necessarily have to be limited to Office Industrial and Retail.

You could just say that I'm dealing with those particular buyers from these markets within that range.

So, there's many different ways to slice and dice it in terms of how you wanted to find your specialty.

Now, when you're looking at specialization, if the target specialization that you would like to have is already well covered, as I mentioned before, just go with a narrower band when you're getting started.

And then you can expand out to broaden your reach, and ultimately get to your desired target once you've mastered that smallest specialization.

I think mastering a smaller area will help you master principles of client service that are going to be relevant for when you do branch out, you're going to have that accumulated market knowledge under your belt.

And also, of course, the confidence that you've built by getting to be the market leader within a smaller slice before getting into a bigger part of the marketplace.

And the one thing I want to say to you if you're already a subject matter expert, and a market leader and a go to person in a market, then I think the challenge for you if you want to keep pushing yourself and keep challenging yourself is to broaden your horizons and to start building a team of people who will help you serve that specialization.

And then for you to start expanding and growing what it is that you can do to serve more clients just outside of that existing specialization where you've already achieved market leadership, and you're in a very strong position.

So, what I've talked to you today is some content that is included within a program I run, which is called top performer.

It's an eight-week program that will equip you with the abilities, habits and tools, you need to be a top performer in your market.

It contains six modules of learning a bit of one-on-one time with me is included.

And also, there's more recorded content that's included within the program that will help you go deeper on the areas that we cover, like purposeful, prospecting, ways to win and building your brand.

We're going to be bringing in another cohort of top performer very, very soon.

And if you want to find out more about the program, and if you want me to send you some information about it when we do launch it, you can go to cresuccess.co/topperformer to register your details.

And then when we invite our next cohort of students to come in and be part of top performer, I will send you all that information if you register for it at cresuccess.co/topperformer

That's all I've got for you today. Good luck with your specialization.

Thank you so much for listening, and I will speak to you soon.