Sigmund Freud and New York Real Estate

A State of Denial

It’s been a little while since my last post, since that time have had a number of meetings with developers and colleagues who work directly with sponsors.
Wish I had a great story to tell.

What we have found is that across the board there is still a huge number of developers and sponsors who are in denial when it comes to their projects.
And for those reading who like Sarah Palin think “de nile” is in Africa then let me refresh your memory via way of Wikipedia.

“Denial is a defense mechanism postulated by Sigmund Freud, in which a person is faced with a fact that is too uncomfortable to accept and rejects it instead, insisting that it is not true despite what may be overwhelming evidence.”

What has this got to do with Real Estate?

Let me share one story that sums it up for me.

Recently I took a well qualified buyer to see a development that still has a third of its inventory unsold.

This project hasn’t sold almost anything in months but when it came to their pricing still wanted $2000+ a square foot!

Sure it was nice project, high floor great finishes but there is no ways in God’s green earth are they going to achieve anywhere remotely near that number.

(My guy was thinking "south of $1000 a foot)

Maybe they “can negotiate” you say…..well my experience is that any time opening positions are so far apart to begin with then the negotiation is destined to fail.

That is reality and research in the area of negotiation bears that point out.

If this was a one off story we all could just have a laugh but it isn’t.

All too often we hear “my project is different” “my project’s location set’s it apart” or “this is much higher quality than the competition”.

No one is immune to market forces those who don’t get a head of the curve when it comes to pricing i.e. cheaper than their competition and who can’t stand out and get qualified traffic in to see their inventory/product are going to get 100% of nothing rather than a percentage of something.

We are in the worst downturn in at least 15 years some say even longer that is our economic reality.

Cut your losses, reconsolidate, get some cash in, work with your lenders and prepare for the next round.

No point in continue to “fight” a battle you cannot win with a price point that was where the market use to be.

Those days are gone.

Olympic Inspiration & Real Estate 2.0

This Ad for Visa by TWBA/Chiat/Day really got me thinking about innovation and in particular how Paradigm Shattering Dick Fosbury was and in my opinion still is.
Watch this if you haven't seen it already.





“The problem with something revolutionary like that was that most of the top athletes had invested so much time in their technique and approach was that they didn’t want to give it up, so they stuck with what they knew,” Fosbury said.

Sounds a lot like how most Real Estate Sales and Marketing Programs are currently conducted.

He said it took a full decade before the flop began to dominate the sport.

I’m hoping we can shift our industry faster than that.

You would have thought that all the other high jumpers and their coaches would have copied him because after all he did win the '68 Gold Medal and break the World Record.

They didn’t - the elite high jumpers and their coaches were too invested in the straddle.
They could not and would not undo all of the years of repetition and the results that they use to get with going with their old style, the Straddle.

Does that look or sound similar to our industry?

It certainly does to me as I see all of these new tools/skills/techniques that so few are using and I keep wondering why.

So what happened next in the High Jump World?
The establishment "attacked" him and his Flop - they were not going to have their paradigm shattered.

Check out this quote:

“Kids imitate champions,” said U.S. Olympic coach Payton Jordan at the time. “If they try to imitate Fosbury, he will wipe out an entire generation of high jumpers because they will all have broken necks.”

Fosbury laughed long and hard when reminded of that quote and then said:

"There were some doctors who felt I was threatening kids’ lives".

His stunning, and almost comical, break with the conventional straddle high jump sparked a revolution in the sport.

Today, the “Fosbury Flop” is the standard technique for high jumpers from high school to the Olympics.

But Fosbury still recalls the debate that raged in the press over his radical approach to the bar.

So what are you doing to shatter the paradigms in your industry, are you trying new approaches or are you happy to continue to do the “Straddle”