Relaunching a Property Development

Re-launching a failed project should be done with a new team and a fresh approach.
A team that is untainted by the first failure.

Harsh words but true - however before you drop the axe on the old team, and before the new team emerges from their chrysalis you need to "harvest"the experience because what they learned is very valuable and can be helpful in the second launch and in the projects "next life".

Here are some but not all of the key questions that you would need to know before you “jump in”:

What are the costs and time needed to fix a product. (Yep -there may be few things that need to change)

What is the required capital investment to re-launch the product. (It is useless to think or say “well I’ve spent my entire marketing budget the first time and now have no money left”) Get creative – find a way to make it work for you and your new team.

What is the optimum pricing strategy (Painful I know because right now it usually means lowering not raising the prices but the market is now VERY different to the one in which you did your initial pro forma)

What is the current “appetite” of the different market segments to the re-launched product i.e. what are the prospects/consumers saying about your Studio’s, 1, 2, 3 Bedrooms, Penthouses, common areas, etc.

These questions and there answers will give you and your new team a better insight into

Why potential customers are not buying your product.
What the market segmentation is and what they now want.
Better understanding of what they value for each segment.

If I were running the re-introduction of [Property Development name removed] I’d run it like a product launch campaign, but with a few interesting (but profitable) variations.

· I’d change the product name to be more exciting, descriptive and different to what’s been used previously and what is currently out there.

· First priority would be an effective sales/informational website – with redesign and sales-driving content and new information.

· 2nd would be an informational blog that goes above and beyond what almost everyone else is doing. I would have streaming video content i.e. Vblogs from the Developer, Architect, GC, Interior Designer, Local Neighborhood Expert, etc. All talking about what is special and unique about this project and this location.

Why these two? Because they will cross-pollinate with each other by sending traffic back and forth to close more sales. Plus, the linking back and forth will drive you to the top of the search engines faster. All of that means is more sales.

3rd would be to have a new true “Blue Chip” brokerage firm put in place and replace the incumbent agency. They would focus on a “co-broker program” that gets it out and across all of their agents, branches and agencies in addition to a specific plan of attack to do that with all other competitor agencies.

Why? Because most sales are co-brokered and it is now all about how many people know and “get” your project.

It is absolutely useless to have just a handful of people who know it well – there is strength in numbers – make no mistake about that.
It’s not about “who you (your current brokers) know - It is about “How many people (brokers/potential customers) know you – AND it is now about how easily AND how much info that they can get beforehand.

Getting A Head Start with your Marketing Program

So why is there a picture of Jorge Perez and his new book at the top of my post?

Well I'll get to that in a moment.

But first off I am always shocked that not every developer in NYC is not taking advantage of the CPS-1 program that allows you to start testing ad marketing your project before your Condo Offering Plan is approved by the Attorney General.

My only conclusion is why they don't is that they don't know what it is.

I know Jorge would use it - read his book and you'll see why I say that.

So for those of you who focus on the construction side of the process and aren't that into the marketing side let me give you a "heads up"on this program.

CPS1 is shorthand for Cooperative Policy Statement 1, and it sets out the Attorney General's rules governing how a developer may test the market for a new building before filing the offering plan, and, for that matter, even before construction is completed.

The CPS1 period, which lasts 120 days but can be extended for an additional 60 days: ''This is so Developers can advertise and take names of people who are interested, but they cannot take money. They can talk about price ranges, but nothing specific. No reservations can be accepted; no deposits can be accepted, and all advertisements must be approved by the Office of the Attorney General.''

I'm not an Attorney so have your counsel check it out for you - but here's the link in the mean time.

http://www.oag.state.ny.us/realestate/policy/Cps1.pdf

So what you say?

Well the sooner you can start building the Buzz about your project the better.

According to one of the greatest Property Marketers Jorge Perez (He's the Southern Half, Chairman, CEO of the Related Group) The first things/principles you have to do according to Jorge is:

1. Develop Awareness

2. Build Interest

3. Create Desire

He has a few more steps so buy his book - but you get the idea right?

These things take time, creativity, skill and money to execute - So let's make sure from this point forward your team knows how to get you a head start and give you every possible advantage in this changing marketplace!

First Things First

Here is a scary statistic - 77% of all homebuyers start their search online.
And that is according to the National Association of REALTORS study of homebuyers and sellers back in 2005!

So in 2008 that number is probably low.

So when they find YOU and YOUR PROPERTY online what do they get?
The basics?
A few pictures, a rendering or two some basic neighborhood shots?
BORING! - Next!

If you are not engaging them online, if they want to talk OR are talking WHO is listening?
AND filling in a basic contact email on a basic brouchure style website that goes off to the unknown is absolutely average -so what are you going to do differently?

How will you differentiate yourself moving forward?

Innovator, Early Adopter or Laggard?

So where are YOU and your company on this Bell Curve when it comes to using new technology on the Sales and Marketing of your Company/Real Estate?

If your not sure what the Rogers Innovation Curve is all about maybe the below bullet points will provide a bit more clarity. (Or you can always Google it or Wikipedia it - like I usually do ;-)

• Innovators - the risk takers willing to take the initiative and time to try something new when it comes to building their business/project /property development
  


• Early Adopters - tend to be respected group and industry leaders, the individuals essential to adoption by whole group.
  


• Early Majority - the careful, safe, deliberate individuals unwilling to risk time or other resources until the trend is already irreversibly under way.
  


• Late Majority - those suspect of or resistant to change. Hard to move without significant influence and effort.
  


• Laggards - these are those who are consistent or even adamant in resisting change. Pressure is needed to force change and even then it is done reluctantly.

I find it's interesting to also see that there is a correlation between what developers build in regards to Green Building/LEED Certification and where they are on the Innovation Bell Curve with their marketing and sales programs.

What do you think? Am I on to something with that observation?

My opinion is this -Innovators and Early Adopters are always looking for advantages, looking for new ways to do "it" better than they have done previously and gain a competitive advantage - regardless of what part of the program we are looking at.

They are always trying to compete whether it is against someone else or their previous personal best.

So where are you on the curve?

What are you going to do differently to get a competitive advantage?

What is Web 2.0?

And how does that apply to me?

Well first off I like this definition which I have "lifted" from Wikipedia which is:

"Web 2.0 is a term describing the trend in the use of World Wide Web technology and web design that aims to enhance creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, folksonomies and blogs."

Web 2.0 is a term describing the trend in the use of World Wide Web technology and web design that aims to enhance creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, folksonomies and blogs.

Watch this video - it is a little bit techie but it is going to give you some more background to this wave of change that is happening to our businesses.



This applies to you because people(your customers) have access to more information than they have ever had before, they are talking about your project, they are voicing and sharing opinions and they are making decisions before you or your people ever get face to face with them.

Do you know what they are saying?
Are you involved in the conversation?
Do you have an active voice in the marketplace with these customers and prospects?

Or are you of the mind set that "We have a website, and we have the brouchure and thats all they need to know" AND the Sales People should just be selling it - because my project is "unique" !

I've got news for you - those days my friend are gone - and to paraphrase from a a popular business book from last century - that cheese has moved.

YES you still need to execute the basics well i.e. the Corporate Identity of the Project, Branding, Marketing Collateral (Physical and Digital) Launch Event, Media Strategy, P.R., Have a strong Sales Program with Great Sales People BUT you need to do more if you want to break free of the competition and be an innovator and not just another follower.

Specifics you say? We are getting there......but we need to have the foundation in place first and to mix metaphors - so we can be all on the same page ( at least to start with)

And yes we are getting to the Real Estate Specific stuff real soon ;-)

Why 2.0

Why Real Estate 2.0?

Why do we need a different approach to how we market our Real Estate Projects?

I'll get to that in a second but first off would you agree that the Real Estate Market in NYC is in a state of flux? and that there is a lot of different perspectives about what is happening out there? And most importantly where we are headed.

Here are some of the latest facts regarding the secound quarter of 08 in NYC.
These numbers come from Jonathan Miller of the Real Estate Appraisal firm Miller Samuel:

• Prices were at or near record levels: Median Sales Price $1.025M, up 14.5%.


• After excluding 15 CPW/The Plaza: Median Sales Price $995K, up 11.2%.


• Number of sales fell 21.8% from 2Q 07. 2Q 07 had the highest total recorded sales for this report.


• Current sales levels are 27.6% above 5-year quarterly average of 2,413.


• Listing inventory 6,869 units, 31.2% higher than last year.


• Inventory is 10.9% below same period 2 years ago.


• Luxury inventory 31.5% below same period last year.


• Days on market was 135 days, 2.5 weeks longer than last year.


• Listing discount was 3.6%, up from 2.2% last year


• The full report is below:

http://www.prudentialelliman.com/NYCPhotos/retail_reports/mmo2008q2locked.pdf

So if the market is in a state of such dynamic change locally (let's forget about the national scene for a moment) Then why is practically everyone doing the same thing when it comes to their Sales and Marketing Program?

Why is everyone Marketing and Selling like it is 2004-07?

(like my picture above - which is dated but classic - Fine for photography not so hot for strategy)

How many Agency's and their Agents's get the quantum shift that is happening in Marketing with the rise of the Web 2.0 Approach?

Well having been on the front lines I could probably count on my fingers (OK maybe I might have to take of a shoe ) and count how many:

A. Get it and

B. Are actually doing it for either themselves or their clients

That is a pretty huge statement considering that there are over 75,000+ Real Estate agents in the greater NYC area.

So what should they also be incorporating into their S & M programs? and what do they need to do to evolve their game?

Well stay tuned and in my next post i'll tell you.