You're navigating a volatile commercial real estate market. How can you secure the best deals?

Nothing is Older Than Yesterday's Success in CRE In today's fast-paced commercial real estate (CRE) industry, staying ahead requires constant vigilance of economic, political, and market conditions. Tools like Geomap are invaluable in this regard, enabling you to analyze data and draw actionable insights. The process begins with data collection, transforming raw numbers into useful information. Ideally, this leads to informed decision-making that drives success. But remember, the cycle doesn't end here—it begins anew. To maintain your edge in CRE, you must continuously monitor, analyze, and adapt, as yesterday's triumphs offer no guarantees for tomorrow.

In a volatile commercial real estate market, securing the best deals requires a strategic approach: conduct thorough market research, stay informed on trends, and act quickly on opportunities. Build strong relationships with brokers and leverage negotiation skills. Diversify your investments to mitigate risks and consider long-term value over short-term gains. Staying flexible and adaptable is key to success.

All of the mentioned solutions are important but I would say that really understanding the market that you are dealing in is vital. Then having a good understanding of the numbers and data is critical. If this is something you aren't up to speed on quite yet, find someone that is. In the beginning, I found someone local that understood the market, the numbers, and what investors are looking for. You don't need to be an expert in every field to be successful, especially not in the beginning. Be willing to outsource and learn from these individuals. Have them walk you through the numbers and really pay attention. At some point you will want to and need to know all aspects of the CRE business. Seek out mentors, be open to learning, and listen!

I had a client who faced challenges in securing a deal due to fluctuating market conditions. By ensuring their finances were solid, including obtaining pre-approval for financing, we were able to act swiftly when a prime opportunity arose. This financial readiness gave us a significant advantage over competitors who were still arranging their finances.

In addition to having your finances clear, in a volatile market, diversifying your financing sources can be highly beneficial. Do not rely solely on traditional loans and lenders; exploring other options, such as private lenders and specialized options like earnest money financing, alongside the ability to move quickly and have an edge against competitors, will allow you to secure the best terms and conditions and avoid being caught off guard if one source becomes unavailable or unattainable.

Financial preparation is like having a sturdy ship ready to navigate stormy markets. Ensuring your finances are in order means understanding your investment capacity and securing pre-approval for financing. It's crucial to assess your liquidity and be realistic about your budget. A strong financial foundation lets you move quickly when a good deal arises, giving you an edge over competitors who may need more time to organize their finances.

My favorite thing about commercial real estate is that almost nothing is easy to find. Unlike the stock market, there is no easy way to find information about properties on an easily-downloadable, pretty tear-sheet. You have to have relationships. Spend your time talking to people. If you are an aspiring investor, find a property that you love and take the owner out to coffee. Ask questions, tell them of your aspirations. Find 5 more owners and do the same thing. Find brokers, recommended by those owners, and start building relationships with them. They are constantly watching the market, searching for deals, and may bring you gold. Keep in touch with all of these people. They will be your ticket to finding solid deals.

A strong network in commercial real estate is invaluable. By connecting with brokers, investors, and industry professionals, you gain early access to potential deals and exclusive opportunities. Building these relationships allows you to tap into collective market wisdom, acting as a radar for detecting valuable deals that might otherwise go unnoticed.

Another client’s success hinged on our negotiation skills. We entered negotiations armed with comprehensive market data and a clear understanding of the seller's motivations. By strategically negotiating on major points and being flexible on minor details, we secured a deal that saved the client considerable money and provided favorable terms.

Strong negotiation skills are key in a volatile market. Being prepared with market data, understanding the seller's motives, and knowing when to push or concede can secure better deals, saving money and ensuring favorable terms.

Risk assessment and management is definitely not something you would want to skimp on. Invest in it. Include risk management capabilities, such as conducting scenario analysis to assess asset-level preparedness for multiple risks and transition expenses, as part of your budget. Choose the appropriate insurance coverage to protect you against financial losses originating from different risks, such as property damage. And remember to always develop a potential plan to respond effectively to each of these possibilities.

Risk management is crucial in commercial real estate. Identify potential risks, diversify your portfolio, conduct thorough due diligence, and secure insurance. Proactively managing risks protects your investments and ensures peace of mind.

Stress test your deals whether your in volital CRE market conditions or not. Make sure you assess the risks and potential complications with a project or deal. Again, there are people and companies that can help you with these aspects of your deal or project. On any of my deals, for example, I will throw two basis points on the deal to see if it still pencils. If it doesn't, where is the weakness? Is the deal as good as you think? Is it worth spending more time and money on? Don't ever get to emotionally attached to your deals. You won't be honest with yourself and tend to have rose colored glasses on when your accessing the deal. That can be dangerous, I learned this the hard way. Be honest with yourself and have trusted mentors look at it

Timing was critical for a client looking to buy in a highly competitive market. By analyzing market cycles and waiting for an off-peak period, we found a great deal with less competition. This patience and strategic timing allowed us to purchase a valuable property at a lower price, demonstrating how crucial it is to act when the market aligns with your goals.