Professional Report

Frank Schulz III, SIOR, is no stranger to the mistakes brokers make in the early days of their careers. The man- aging principal of the Klabin Co./CORFAC International frankly admits that he’s made many of them himself. Plus, as chair of the SIOR Young Professionals Committee, he’s had the opportunity to chat with up-and-comers from around the country about best practices and the learning curve that’s part and parcel of a burgeoning career.

So we thought it appropriate to chat with the Los Angeles-based Schulz about the biggest mistakes young pros make. Here are his Top 10:

1. SWINGING FOR THE FENCES

The image of closing huge deals with big paydays is a major allure of a career in commercial real estate. Schulz calls it elephant hunting. But building the relationships that lead to bagging those big ones, “can take three, five, or 10-plus years,” says Schulz. “It’s very important to understand that there’s a balance. You need to develop long-term relationships but you can’t let that be your only focus.” Embracing that balance is particularly important in the early lean years. “There are two reasons why you work on smaller deals,” he says. “First is that the client will talk to you. Second is that you’ll get paid faster.” We’ll explore the art of elephant hunting shortly.

2. NOT QUALIFYING LEADS

It’s a pretty sure bet that if a potential client is calling you for information, he’s already called six other brokers. Newbies “fall into the trap of spending time putting that information together without asking the right questions or meeting with that prospect. They’ll send an email with the information and they think they’re actually working toward a deal.” The reality, says Schulz, is that “you’re only being used. It’s a matter of qualifying who’s a real lead and who’s not, and that’s something I still work on to this day. You try to do everything because you’re trying to feed your family. But you need to qualify the odds of making money on that deal. If you know the potential client is talking with other brokers and it’s a small deal demanding a lot of hours, you have to value your time at a greater dollar amount than the prospect does.”

3. IMPATIENCE

If you are into elephant hunting, expect to spend a lot of time crouching in the weeds. “Young brokers often expect to make a phone call and reach a client who says he needs 100,000 square feet next week. The reality is that you have to call that client three years before he needs that 100,000 square feet, and ask if you can meet with him.” And, in fact, that prospect is likely to say no. “So, the young broker will go on to the next call.” But says Schulz, that’s the very best time to meet a potential client--well in advance of his needing space. The true skill of any broker is to get that face time and set the stage for remembering you when, years ahead, that 100,000-square-foot need does arise. “Remember, when he’s a year from his new lease, he’s probably already heard from 10 other brokers.”

4. BURNING BRIDGES

While we’re on the subject of relationships, Schulz emphasizes some of the most important connections a young pro can make—other brokers. “There are relationships, and there are long-term relationships,” he says, “Relationships with other brokers are equally important—if not more so—than relationships with clients.” He says he gets most of his inside information from other brokers and believes that “you’ll do more deals with any one broker than you will with any one client. If you treat a broker badly, that will live longer with you than if you ever make a mistake with a client.”