Li Lipsey School of Real Estate 2011 Systems for Success Presented by Mike Lipsey, MCRE
Li
Lipsey School of Real Estate2011 Systems for Success
Presented by
Mike Lipsey, MCRE
Module 1 Best Practices
1.1…..…………..Winning More Tenant Rep Assignments
1.2…..….....................................……Performance Leasing
1.3…..……….……….......................…Performance Listing1.4..………….………………………Presentations That Win
Module 1: Best Practices
Winning More Tenant Rep Assignments
I-RRR (Industry Rent to Revenue Ratio) Industries Average Revenue Dedicated to Rent
C-RRR (Client’s Rent to Revenue Ratio) Client’s Revenue Dedicated to Rent
DTOR (Dollars to Occupy Ratio) I-RR ± Other Expenses ± Market Conditions
Users in the United States BizStats.com – FREE Financial Tools and Business Statistics. BizMiner.com – Detailed Financial Information for a Fee.
Users in Canada StaCan.gc.ca – Canadian Business Statistics
Internet Sources – Establishing I-RRR and C-RRR (Private Companies)
1.1
Calculating Projected Base Rent (Example)
I-RRR (Industry Rent to Revenue Ratio)*Annual Gross Revenue = Projected Base Rent
(Example) 4.3 (I-RRR) * 500,000 (Annual Gross Revenue) = Projected Base Rent
* After Year 1, Increase Annual Gross Revenue by 8%
1.1
Contract Year Annual Gross Revenue I - RRR Projected Base Rent
2012 $5,000,000 4.30% $215,000
2013 $5,400,000 4.30% $232,200
2014 $5,832,000 4.30% $250,776
2015 $6,298,560 4.30% $270,838
2016 $6,802,445 4.30% $292,505
1.1Establishing I-RRR (Tools)
1.1Establishing I-RRR (Tools)
1.1Establishing I-RRR (Tools)
Insurance Carriers & RelatedS-Corp Annual Average Sales, Income & Expense 2011
Rent 3.24%
1.1Establishing I-RRR (Tools)
2011 S-Corporations: Rent as a Percent of Sales
1.1Establishing I-RRR (Tools)
1.1Establishing I-RRR (Tools)
Rent 3.3% 4.6% 5.2%
S-CorporationsWith Net Income(as % of Revenue
ArchitecturalEngineering & Related Services
Accounting, Tax
Preparation & Payroll
Services
Legal Services
1.1Establishing I-RRR (Tools)
Calculating Dollars To Occupy Ratio
* Assumption: 3% Annual Increase in Other Expenses
Contract YearAnnual Gross
RevenueI - RRR Projected
Base Rent
Other Expenses /
Market Conditions
DTOR Total Dollars To Occupy 300 W Adams 190 S LaSalle 29 N Wacker Dr
2012 $5,000,000 4.30% $215,000 3.70% 8.00% $400,000
2013 $5,400,000 4.30% $232,200 3.81% 8.11% $437,994
2014 $5,832,000 4.30% $250,776 3.93% 8.23% $479,701
2015 $6,298,560 4.30% $270,838 4.04% 8.34% $525,495
2016 $6,802,445 4.30% $292,505 4.16% 8.46% $575,785
Present Value
/ by Lease Term
/ by Usable SF
1.1
Lease Resolution Worksheet
Contract Years Remaining Base Rent With Escalations Contract DTO SIC Budget Market DTOR Occupant's Forecasted Revenue DTOR
2012 $26.00+ $280,000 $210,000 $180,000 $3,500,000 X6
2013 $26.50+ $290,000 $225,000 $190,000 $3,750,000 X6
2014 $27.00+ $300,000 $240,000 $200,000 $4,000,000 X6
2015 $27.50+ $310,000 $255,000 $210,000 $4,250,000 X6
2016 $28.00+ $320,000 $270,000 $210,000 $4,500,000 X6
10,000 SF I-RRR 4.5
Expenses .5
Sub-Market 1.0
DTOR 6.0
1.1
Bakke Lipsey Pricing Vacancy1.1
Establishing Market Comparables1.1
Evaluating Building Quality1.1
Enhanced Rent Analysis1.1
Determining Appropriate Asking Rent1.1
10.2...........................................…Performance Leasing10.3..…………………………………Performance Listing
Performance Leasing / Performance Listing
1.2 1.3
Prospecting Pyramid
Tier 1 – Base Industry / Market
Tier 2 – Macro – Sub
Tier 3 – Micro – Sub
Tier 4Target Rich
Largest Group (Prospects)Inexpensive Investment
Smallest GroupLucrative Investment (Time / Financial)
2nd Largest Group (Prospects)Inexpensive Investment
2nd Smallest GroupLucrative Investment
1.2 1.3
Prospecting Pyramid
Tier 1 – Base Industry / Market
Tier 2 – Macro – Sub
Tier 3 – Micro – Sub
Tier 4Target Rich
Included on Email BlastCold Call
Scheduled MeetingAll Marketing Information
Personalized EmailMarketing Card / Warm Call
Drop InMarketing Card / Warm Call
1.2 1.3
Prospecting Pyramid
Tier 1 – Base Industry / Market
Tier 2 – Macro – Sub
Tier 3 – Micro – Sub
Tier 4Target Rich
REIT
SouthwestUnited States
Office
Seeking> 100,000
1.2 1.3
ListGrabber (Screen Shot)1.2 1.3
ACT! (Screen Shot)1.2 1.3
Business Development VS Transaction Management
Activity Breakdown
Transaction Management Advanced Steps, Existing Relationships Examples (Financing, Appraisals, Negotiation)
Activity Plan Actual Plan Actual Plan Actual
Business Development
Business Development
Transaction Development
Transaction Development
Business Development Introductory Steps, Creating New Relationships Examples (Cold Calls, Introductory Flyers)
Performance Listing (Genesis)
Leases Signed
Negotiations
Proposals / LOI
Site Visits
Contacts
Units of Activity
1
2
3
4
5
6
1.2 1.3
Performance Listing (1 Year Plan)
Leases Signed
Negotiations
Proposals / LOI
Site Visits
Contacts
Units of Activity
1
2
3
4
5
6
8
16
128
256
768
3,840
1.2 1.3
Investment Sales Model (6 Month Plan)
Closing Will Require
Contact Negotiation
LOI
Property Tour
Package Mailings
Contacts
1
2
3
4
5
6
1
2
4
12
42
250
Units of Activity 5,0007
1.2 1.3
Performance Listing (Leasing Plan)
JAN Plan
JAN Actual
FEB Plan
FEB Actual
MAR Plan
MAR Actual
APR Plan
APR Actual
0
1
2
3
4
5Letters of Intent
JAN Plan JAN Actual
FEB Plan FEB Actual
MAR Plan MAR Actual
APR Plan APR Actual
0
1
2
3Signed Leases
Activity JAN Plan
JAN Actual
FEB Plan
FEB Actual
MAR Plan
MAR Actual
APR Plan
APR Actual
Units of Activity 1600 - 1760 - 1936 - 2130 -Contacts 320 - 352 - 387 - 426 -Site Visits 64 - 70 - 77 - 85 -Proposals 11 - 12 - 13 - 15 -Letters of Intent 3 - 3 - 4 - 4 -Lease Negotiations 1 - 1 - 1 - 1 -
Signed Leases 1 - 1 - 2 - 3 -
1.2 1.3
JAN Plan JAN Actual
FEB Plan FEB Actual
MAR Plan
MAR Actual
APR Plan APR Actual
0
1
2
3
4
5Letters of Intent
JAN Plan JAN Actual
FEB Plan FEB Actual
MAR Plan
MAR Actual
APR Plan APR Actual
0
1
2
3Signed Leases
Performance Listing (Plan VS Actual)
Activity JAN Plan
JAN Actual
FEB Plan
FEB Actual
MAR Plan
MAR Actual
APR Plan
APR Actual
Units of Activity 1600 1550 1760 1700 1936 2000 2130 2200Contacts 320 300 352 350 387 400 426 450Site Visits 64 60 70 45 77 80 85 90Proposals 11 10 12 10 13 14 15 20Letters of Intent 3 4 3 2 4 3 4 5Lease Negotiations 1 1 1 1 1 2 1 4
Signed Leases 1 0 1 1 2 2 3 3
1.2 1.3
Presentations That Win (5 Step Approach)
Executive Summary
Situation
Approach
Expierance
Conclusion
1
2
3
4
5
1.4
Performance Example1.4