Commercial Real Estate Trends That You Can Expect In 2018
1. The Economy Will Grow In 2018
The real estate industry is currently riding the waves of one of the longest expansions in its history. But real estate professionals are quite cautious of the potential impact of real estate on individual sector fundamentals. Yet, they are confident that the industry will perform better than the previous year in 2018. Ken McCarthy – the Principal Economist at Cushman & Wakefield – states “We expect the national economy to perform well in 2018. It could be one of the best years of economic expansion in the country. In fact, it is likely to be the best year for GDP growth as well. But there is going to be many differences in performance where regions and sectors are concerned.”
2. Retail Bankruptcy Is Supposed to Slow Down
Moody’s – a research and analysis firm – has released a research report where it states that retail bankruptcies are expected to decline in 2018. They predict that the operating income of the U.S. retail sector will increase to 4.5% in 2018 – up from the 3.5% in 2017. In fact, the sales are supposed to jump to 4.5% as well. Moody’s Vice President Mickey Chadha states that large discount shops such as Walmart will improve since growth investments will start to pay off. On the other hand, drug retailers such as Walgreens and CVS will improve due to increased front-end sales and cost-effective practices.
3. Multi-Unit Properties Will Peak
Yardi Matrix – a commercial real estate research firm – expects more than 480,000 apartment units to come online in 2018. But labor woes in the construction industry may stall the growth to some extent. As per CBRE, 2018 is going to be a strong year for multifamily supply. But it may not reach a peak this year. On the other hand, the Brokerage’s 2018 outlook report states that 2018 will have the second-largest number of units completed during the period. In fact, 284,000 apartment units have been completed at the end of 2017 and 258,000 will be coming online in 2018 – which shows a drop of 9.8% from 2017.
4. Increase in Deal Volume
Transaction volumes had taken a hit during the beginning of 2017 due to the Federal Reserve’s gradual boosts to interest rates and the election of President Trump. Transaction activity has declined due to the gap between seller and buyer price expectations. This happened due to the doubts over the rise in the interest rates and the continuation of the cycle on the buy-side. This gap is expected to close in 2018. This will happen due to the sellers accepting the new paradigm. In fact, investment activity has already rebounded this year and is expected to continue to 2018.
Using Social Media to Market Real Estate Development Projects
1. Use Contests
If you are after exposure or network engagement, running contests on social media is a good solution. Posting a contest on Twitter or Facebook will expose your brand and at the same time, it will engage your audience.
A golden rule to keep in mind when running contests is to keep the contest structure as simple as possible. For instance, ask simple questions that require a one-button click to answer (such as choosing between colors/color schemes or even photos). It gives your network a chance to voice their opinion while reducing the amount of time needed to make a response.
The good thing about contests is that you can use the results in subsequent marketing.
2. Offer Deals Exclusive to Your Social Media Followers or Give Your Followers A Chance to Win
Everybody loves free things or a good deal. You can use this innate human behavior to boost your social media presence and your business. For instance, you can offer savings or even give gift certificates in exchange for liking and sharing your page.
3. Keep Your Network Up-To-Date on Your Latest Projects
Due to the humans being curious, people want to know what is happening around them. As such, when you have new projects, keep your social network up-to-date. Some are interested in opportunities you may offer, so post any opportunities you may have. Additionally, share the benefits that your project will yield to the community. Also, include information about the un-served or underserved market your project will fill. In a nutshell, make your posts relevant to your audience.
4. Make Use of Videos
For the most part, videos are inadequately used. However, as a medium of communication, they are very effective. People are drawn to watching videos as they are more interactive and better for content consumption. As a testament to their effectiveness, HubSpot reckons that in the real estate industry, listings that were accompanied by a video received up to 403% more inquiries when compared to the listings that did not have a video.
Take full advantage of the power of video and include short clips of your new projects. As a golden rule, keep the videos succinct with the aim of putting your message across in just one minute. Alternatively, use Facebook Live.
5. Do Not Forget About LinkedIn
As a social media platform, LinkedIn is an under-utilized platform. Do not make this very mistake. Grow your presence on this platform and use it for both marketing and professional networking.
Understanding the Responsibilities of a Real Estate Developer
A real estate developer needs to have plenty of experience working as a developer and needs to be very familiar with market conditions to succeed in this business. The developer should have strong connections that are maintained with local government to help ensure that projects are completed on time. Developers can also get assistance from friends who can give them recommendations so that their sources can help to get a project pushed through.
A real estate developer needs to be able to work with a large team since he will be working real estate agents, politicians, landscapers, contractors, architects, and many other professionals. It is essential to have good interaction and communication with these individuals so that a project can be managed from start to finish. Also, developers need to ensure that they select hard-working and qualified team members and that they manage, organize and meet their demands.
Developers need to have enough flexibility to travel to other locations to develop their projects. They also need to have the flexibility to read the demands and needs of the community they are working in.
The following is a list of some of the major responsibilities that a real estate developer has:
- Each developer needs to ensure that every project has clear title deeds.
- Developers need to get all statutory, regulatory, and legal clearances before starting on a project.
- A developer needs to confirm if there are any legal dues on the land.
- A developer needs to secure finances that are required from funding institutions.
- The developer needs to be able to explain various real estate terms such as super built-up areas, built up area, and carpet area to customers, in addition to the project’s specifications and plan.
- If a project is stopped or there are any delays, the developer needs to repay the investors their money along with interest.
- Properties should be offered at fair prices by developers and marginal profit should be targeted.
- Developers need to plan so that there are no raw material shortages.
- Developers need to make inquiries with various municipal departments to establish whether there are any outstanding requisitions or notices that relate to the property.
- Developers should minimize or avoid any delays in completing their projects.
- Developers should offer quality services and construction.
- A developer needs to keep clients informed on the progress of their construction project and keep them updated on a regular basis.
- Developers need to keep the interests of their customers protected.
- Homes should be offered by the developer that allows buyers to make selections based on kitchen, floors, layout and other important characteristics.
- Properties should be sold by developers that are free of any encumbrances.
- Developers need to give a clear idea to buyers on extra charges such as service and VAT tax, open car park, covered car park, sewer, and electricity.
- The developer needs to stick with whatever the initial master plan was that was advertised when the project was marketed.
- Whenever they are dealing with clients, developers need to be completely transparent.
- It is unacceptable for project plans to be changed by the developer without the customer being informed.
- No developer will be allowed to build on spaces that have been designated as play areas or green areas.
3 Tips for Networking into A Real Estate Brokerage Firm
1. Be Persistent
Brokers often look for the same attitude that clients do. For example, a client wants a broker who will be aggressive and persistent. They want someone who is going to connect them with the right tenants, find the best buyers, and locate the space they need. You can only find those things if you remain persistent and avoid procrastination. Similarly, brokerage firms want to hire brokers that are going to be aggressive and persistent without becoming annoying. It’s a difficult mindset to master, but one that will help you secure the job you need.
The question is, “how do I show my persistence?”. It all begins with a simple introduction, which you can send via email. With that introduction, you should include your intent for employment and your professional resume. That’s the launching point. Then, if nothing happens, follow up on a weekly basis. Each week, let them know that you are still driven and still interested.
2. The Pros Appreciate “Old School”
There’s no denying the speed, power, and efficiency that the internet has brought to the workforce. On the contrary, many people simply rely on it too much. They spend so much time applying online and building LinkedIn profiles that they don’t pay attention to the person who is doing the hiring. This contrasts with the fact that many older employers don’t check their LinkedIn as often as you would imagine.
The key to overcoming this divide is to rely on “old school” snail mail. Write a letter, add your resume, and seal it all in a nice envelope. Many of the older employers don’t experience these types of in-person attempts much anymore, which means they take notice when they do.
On a similar note, you can pick up the phone and call their office. There is so much that communicate about your personality over the phone that can’t be detected in an email or letter. It’s a good way to be heard and to impress the people doing the hiring. Finally, don’t forget to buy a suit, cut your hair, and clean your shoes before visiting the office.
3. Your Relationships Can Help
What’s the point of networking if those relationships never actually help you? Having friends is nice, but it’s even better when you can leverage that relationship to get your foot in the door. That doesn’t mean you should expect to be hired because you know someone related to the boss. It simply means that you can use that connection to get a phone call with the people who count. So many people have leveraged important connections simply to start a conversation, which later led to long-term employment.
Don’t buy into the misconception that having help somehow means you are inferior or didn’t earn your position. What you are doing is utilizing your network to launch your career. Having a network and knowing how to use it is an important skill. As a matter of fact, it’s one that is going to help you tremendously as a broker. If you can’t use them now, then you’re going to have a hard time using them in the future.
Things to Consider When Hiring A Commercial Real Estate Developer
The right commercial real estate developer should have a good understanding of how financial limitations will impact the financing process of the project. In fact, the developer should be knowledgeable about commercial finance and should be able to walk through the customer during each step of the process. Although most developers will simply refer their customers to the nearest bank or lender for financial advice, it is better to work with a professional developer who has extensive knowledge of financial planning issues.
The commercial real estate industry is fragmented with very little service standardization. In fact, most companies provide only a portion of services required for the completion of the entire project. They don’t provide a comprehensive oversight which will allow their clients to disengage from the construction project and concentrate on other areas of their businesses. That is why you should hire a commercial real estate development firm that provides an end-to-end project management approach. This offers the benefit of a single contact-point project control and accountability.
The developer should be prepared to help the customer resolve any issues if the proposed project is out of reach due to image problems. This could include postponing the relevant project for some time and assisting the customer with corrective measures such as an image change.
In fact, appearance is very important to local and regional authorities. This can impact your project in a positive or negative way. To make sure that the required municipal approvals are granted, you should work with a developer that has a reputed image within your community.
Whether you are dealing with a commercial property such as an office park, church, or medical office, each type of project has different requirements that the developer should meet. But all developers may not be able to meet such requirements. That is why you need to work with a company that has the experience, skills, and expertise to deal with all aspects of the project. It should meet the vision and financial restraints of the client. A company that is suited for one project, may not have the technical expertise to build a new facility. In fact, the right company should have the client’s best interests in mind throughout the project
Many new commercial real estate developers learn the hard way that it takes highly specialized skills to complete a job efficiently. That is why you should always work with a reliable commercial real estate developer on the market.