It’s no secret that the commercial real estate industry is growing increasingly competitive. Over the past two years, the market has changed dramatically, clients’ needs have evolved, and establishing and growing a network has become more challenging than ever. As a broker, it’s crucial you find a way to set yourself apart from your peers — but how?
It’s no longer enough to be knowledgeable about real estate trends and good with clients. After all, there are thousands of brokers with those two attributes. Today, you have to understand each of your clients' highly complex and nuanced challenges and cater to their specific, individual needs.
And that’s where specialization comes in.
Today, we’re covering what it means to specialize, what you stand to gain by choosing a CRE specialty, and a few specialties you can choose from.
How does specializing benefit brokers?
At first, the idea of specialization seems counterintuitive. If you want to build and grow a thriving network, doesn’t it make more sense to appeal to a broader audience? Won’t choosing a niche cut you off from a wide swath of opportunities?
In reality, attempting to work with too many different verticals will negatively impact your long-term success. Because, in the words of best-selling author and successful entrepreneur Seth Godin, “When you seek to engage with everyone, you rarely delight anyone.”
Here are two benefits you’ll gain by choosing a niche and becoming an expert in your specialty.
A well-defined target audience lets you hone your messaging. On a macro level, all clients have the same general need: buy, sell, or lease real estate for commercial purposes. But the closer you zoom in, the more differences you’ll see between clients. For example, an international manufacturing client has a different set of criteria than a software startup. And a landlord in an urban setting will have different expectations than a landlord in a suburban or rural area.
It’s easier to grab and hold prospective clients’ attention when you can speak to their unique pain points and demands. Creating messaging tailored to your well-defined target market will resonate better and make it easier to gain their trust.
A smaller niche makes it easier to become a known market expert. Every broker aspires to be recognized as an expert. Clients trust them, peers respect them, and more often than not, they earn the best listings and commissions. But it usually takes decades of highly publicized success to rise to expert status in the CRE industry.
But when you specialize, you’ll compete with a smaller group of peers. If you’re highly effective and yield results, you’ll quickly earn the coveted expert badge — and all the referral business that comes with it.
A clear niche means you have fewer variables to manage. When you’re a generalist, you’re often responsible for many different industries and deal types, and managing so many moving pieces can become overwhelming. And, in some cases, pertinent information can slip through the cracks. However, when you’re laser-focused on one niche, there are fewer variables to track and thus a clearer path to close.
Types of specialization
To succeed in a specialty, you need to know everything about your market. But, what qualifies as a CRE specialty, and how do you know which option is best for your career?
There are three ways you can specialize
Location. A broker specializing in a specific location should be extremely knowledgeable about the microtrends, economics, demographics, and land use of one contained geographic area. Like, for example, a small group of suburbs outside one city or a specific neighborhood of a metropolitan area.
Transaction type. A broker specializing in a transaction type might choose to be a tenant rep, landlord rep, buyer rep, or seller rep. By working specifically on one side of a transaction, you’ll become intimately familiar with clients' needs in those situations.
Asset type. A broker specializing in a specific asset type should be well-versed in the various sub-assets, trends, and issues common to their chosen type. You might specialize in office space, industrial buildings, multifamily real estate, or retail space.
Many brokers specialize in more than one overlapping space. For example, a broker might specialize in retail for clients in Downtown Boston or become a tenant rep for office space in Metro Atlanta. The deeper your niche, the easier it will be to tailor your messaging and achieve expert status.
When choosing a CRE specialty, look at your biggest wins, the types of clients you enjoy working with most, and where you see the most opportunities. For example, you might realize your biggest successes have come from retail clients or that you enjoy working as a seller rep more than a buyer rep. Once you’ve identified your potential niche, it’s time to begin targeting more opportunities in that space to help deepen your knowledge and grow your personal brand.