S.E.C. Real Estate Observer

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Beginning in the early 1960s, commercial and investment real estate professionals began meeting in small groups to brainstorm solutions to the various problems of owning and operating commercial real estate. Out of those discussions, a prominent San Diego-based realtor named Richard Reno began to formalize the discussions, and the process he and his early associates developed has evolved into today’s highly organized marketing sessions. A marketing session is one of the most interesting and successful methods of marketing commercial and investment real estate. The concept has been in existence for over fifty years and has grown from a few brokers gathering together for coffee to organized meetings taking place across the fifty states, Canada, and even in exotic locales off-shore and on cruise ships. Every month of the year, except December, various groups of brokers are hosting and/or attending marketing meetings from New York to California, from Oregon to Florida, and everwhere in between.

Today’s marketing sessions can last from a few hours in one day up to four days, generally taking place in a formal meeting facility such as a hotel meeting/conference room. Such meetings operate according to a pre-planned agenda or schedule of events provided by the group organizing the meeting. Invitations go out to potential attendees approximately six weeks in advance to allow the broker time to meet with clients, secure listings, prepare presentation documents and back up packages, secure hotel rooms and transportation to and from the meeting and coordinate activities with other attending brokers.

Imagine a gathering of 30 to 100 commercial and investment brokers all in the same meeting room and all prepared to listen to property presentations and think about transactions that can be structured. The assembled experience, education and brainpower available are tremendous. It is the goal of a marketing session to focus all of that talent on one or two properties at a time, throughout the length of the meeting, in order to achieve each property owner’s objectives in one transaction or a series of transactions.

Imagine a gathering of between thirty and one hundred commercial and investment real estate brokers seated facing each other in a “hollow U” seating configuration, all identified with table tent name plates identifying them and their home city. All the attendees are prepared to listen to the property presentations and think about the various transactions that can be structured. The assembled experience, education and brainpower is tremendous, and the intent of the session is to focus all that talent, initially, on one property at a time, throughout the length of the meeting. The goal is to accomplish each property owner’s objectives in one or a series of transactions, begun at the session.

Now, take a look at the components of a well-organized marketing session. One of the constants of a marketing session is the presence of a moderator whose job it is to keep the meeting on track, follow the agenda and facilitate the property presentations of those in attendance. The moderator is usually someone who is friendly, creative and knowledgeable about different types of commercial/investment properties. He/she is also able to quickly evaluate the quality of a property being presented, the urgency of a situation or the benefits a property or owner can bring to a potential transaction. It is the moderator’s job to bring out the salient points of a property and draw out the abilities of the property’s ownership, hopefully sparking the interest of one or more individual brokers in the audience. The most effective moderators meet with the presenter in advance of the presentation to learn more about the property, its ownership objectives and factors affecting a potential sale or exchange.

Good moderators are skillful and knowledgeable interviewers and should help to bring out the most important facts about a property and its ownership. That accomplished, the moderator will move into the “taker” or solution phase of the presentation wherein the audience finally gets to fully participate in questioning the presenter, or in offering potential transactions to be considered later at the meeting. The moderator will conclude the presentation with a request for the names of those brokers who may have an interest in the property or clients that have just been presented. Finding or developing a good moderator is one-half of the battle toward creating an effective marketing session. The Society of Exchange Counselors, the nation’s premier creative real estate organization, thinks development of moderators is so important that they have developed a course entitled “The Certified Moderator Course”, which consists of two complete days and one evening session designed to produce accomplished marketing session moderators. As a result, although by no means exclusive, members of the Society are competent to handle the duties of a moderator at all traditional marketing sessions.

The other key element of a marketing session is the presenter. A successful presenter has a good working knowledge of the property being offered. He/she knows all the salient details about the property, the market, the cap rate and any special features that makes the property unique, desirable or troublesome. Most brokers fit easily into this category. The next step is much more difficult.

The broker must have actually counseled with his client. He must understand his client’s motivation and capabilities. The focus now shifts to the “needs” versus the “wants” of the client. What are the benefits being sought in a future acquisition? What are the benefits being offered in the property being relinquished, sold or exchanged? The whole question of a client’s motivation must be examined and understood. “What are they going to do with the money?” is a key question that must be answered. Often, more than one counseling session is necessary. Perhaps the format will be to first focus on the property. For the second counseling session, the focus should be on the “why” and the “what” a client wishes to achieve.

There is a very powerful synergy that takes place in a marketing session when a skilled moderator works with a thoroughly prepared presenter to explain the property, the people, the benefits, the motivations, the opportunities and obstacles in any given property situation.

Now, try to picture a meeting room in a conference center or hotel. In the front of the room are one or more picture screens. At least one screen is set up with a projector to show a picture of the property being presented. Every broker knows that pictures are worth a thousand words, and the audience filled with other brokers wants to see what the presenter is talking about. Significant care should be taken by the presenter to select the appropriate visual images of the property, either by a plat, an aerial or a series of photographs demonstrating the property. Computer projectors are desirable, with flash drives and power point presentations the norm, but an old fashioned transparency machine or even a slide projector can work as well. The importance is not the technology but rather the presentation of the property to its best advantage and reinforcing the presenter’s audio presentation with a video image. This helps the property be remembered and will stimulate interest from the brokers in the audience.

Every property being represented should be in the marketing book produced by whoever is organizing the marketing session. Several samples of offering information are attached to this presentation as exhibits. Long experience has demonstrated that the offering information sheet should be carefully completed, all the questions answered and information requested filled in to the best of the presenter’s ability.

Often the offering sheet will be the only written information that actually makes it back to a broker’s office after the marketing session is completed. The marketing sheet will provide the numbers on a given property and should include price, performance, loan and ownership information as well as the appropriate contact information for the offering broker. Other information on the marketing sheet will speak to the reasons for disposing the property by the owner, the owner’s desires and expectations and the benefits offered and expected from a transaction. This will expedite the final phase of a marketing session, follow up.

One important component of any marketing session is the creation of breakout rooms. After a presentation is made, often other brokers in the room will desire more information or discussion than is possible with the time for during the presentation. There are also those who wish to keep their discussions on a confidential basis, so most of today’s marketing sessions have either an area or a separate room where those discussions between a presenter and an interested party can take place and not disturb an ongoing presentation. These breakout rooms or areas should be very convenient to the meeting room itself and furnished with water, paper, writing materials and real estate forms for constructing potential transactions.

Although not strictly necessary, many marketing sessions have made available to each participant a blank self-carboning form to be completed outlining a proposed transaction. This “mini” form is not binding in any way but serves several functions. The completion of a “mini” allows the offering broker to organize his/her thoughts about a particular property. The writer keeps a copy of the “mini” offer and delivers one to the broker presenting the property or the listing broker in the marketing book. The “mini” then becomes a basis for following up a proposed transaction and serves to remind both parties about the presentation and ideas or interest that has been created. A sample form is attached as an exhibit to this article.

All those attending the marketing session are focused upon achieving the goal of a successfully closed real estate transaction. The organizers should invite brokers who bring their inventory; the organizers then produce the marketing book, arrange the physical meeting place, secure the moderator and prepare the meeting agenda.

The moderator is prepared to ask questions of the presenters and lead the discussion about a property, its owner and the owner’s motivation and goals. The presenter is ready with complete, in-depth information about the real estate and owners. The room is full of brokers, each hoping to secure a transaction.

Something very unique happens when all the above elements come into action at the same time. The meeting room comes alive with all the attending participants concentrating their complete attention on the presenter, the moderator’s questions, the property offering sheet and the visuals. Everyone is trying to help make a transaction for the presenter.

If all of those attending the meeting make an effort to help each presenter with his/her ideas, questions, brain storms and participation, multiple opportunities are created. The “spirit” in the room is infectious and creative ideas abound. It is important to note that there are many cash transactions that happen as a result of a presentation at a marketing session. This is why these meetings are not called exchange meetings. Many brokers consider the exchange of cash for a deed to be a very acceptable result of a marketing session presentation. This transfer of cash for a deed is not the only acceptable result from a marketing session, however, and the creative transaction-making process is stimulated by all of the elements working together to achieve the desired result – a closing.

When the marketing session process works, it generates many different opportunities for transactions. The key to a successful closing is follow up. Often, the broker returns to his/her office and several hours have passed or even several days. The broker should immediately begin the follow up process by contacting the other brokers who expressed an interest in the property that was presented. E-mail is an excellent system for this initial contact, but phone calls and personal visits are excellent during the initial follow up process. Information and backup packages about the respective properties can be exchanged. It will soon follow if a transaction possibility exists, but without the tenacious initial follow up, it is unlikely anything will happen.

Participation in a marketing session offers many possible opportunities for an alert broker. Here is a list of activities that that can be undertaken by the attendee at a marketing session:

1. Present a listed property for sale or exchange with moderator;

2. Quick Pitch a property without moderation;

3. Disseminate property information to other attendees (handouts);

4. Create and offer out a have/want sheet;

5. Participate in a cash and paper inventory:
a. Who has cash or paper and how much?
b. What are they looking for?
c. What are their investment criteria?

6. Make offers on property presented or in the marketing book:
a. Forms are provided to flush out ideas;
b. Not binding but rather idea sheets;

7. Study the properties in the marketing book:
a. Not all properties will get presented;
b. Bargain hunt;
c. Look for specific brokers, types of properties, geographic areas;

8. Seek joint venture partners;
a. Raise cash for investment opportunities, or
b. Raise credit for investment opportunities;

9. Brainstorm problem properties;

10. Educate yourself about what others are doing;

11. Learn about creative solutions;

12. Build relationships with other, like-minded, creative people in your business from other geographic areas;

13. Seek specific types of expertise for a given situation, property type or specific need;

14. Lean about other markets, property types, different customs and ways of conducting business.

A successful and well-organized marketing session is a tremendous opportunity for a commercial and investment real estate broker, and those who avail themselves of this format for doing business will soon find that their investment will pay them dividends far beyond their traditional brokerage. A marketing session is not meant to replace any traditional brokerage activity, but to enhance and multiply the broker’s efforts to move to a closing with a satisfied client. It is a fairly complex dance, but when properly orchestrated, a marketing session is an exciting and fulfilling experience.

For more information contact Rod Stewart: rstewartrealtor@sbcglobal.net