Thanksgiving

We often give thanks for the things we are blessed with but I read this quote and wanted to share it as it to speaks to me about the spirit of Thanksgiving

Aspire not to have more, but to be more - Oscar Romero, Patron Saint of El Salvador

Live and Love Large this Thanksgiving.

Chris

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.

NYC's 3rd Quarter Results - Just the Numbers

The Bad News

 The number of sales dropped 24.1% from the prior year quarter to 2,654.
 Listing inventory increased 34.6% compared to the same period last
year to 7,003 units.
 The average days on market was 134days, 11 days longer than the 123 days of the prior year quarter.
 The listing discount increased modestly to 2.6% from a discount of 2.0% in the prior year quarter.

The Good News


 The average sales price of a Manhattan apartment remained above the $1,000,000 threshold.
 The average sales price increased 8.1% since the prior year quarter to $1,480,363.
 The median sales price increased 7.4% above the $864,397 median sales price achieved in the prior year quarter, reaching $928,263.
 The average price per square foot rose 4.3% over the same period last year to $1,193

More Facts

http://www.prudentialelliman.com/NYCPhotos/retail_reports/mmo2008q3locked.pdf

(Prepared by Jonathan Miller – NYC’s #1 Appraiser)

Applied Creativity 2008

This past Sunday the The New York Times ran an article that was about how brokers now had to get creative to “seduce buyers”.

DUH! – talk about being masters of the obvious!

Of course things need to be done differently we are only in the worst financial crisis of our era.

Some of the tactics sounded interesting and fun and like they achieved their preliminary objective which is to create more awareness.

What wasn’t directly stated was the fact that we are now are competing for fewer buyers than what previously existed and the first thing that needs to be done is catch their attention.Some brokers are hustling for their clients and going above and beyond.For those who are going the extra mile and trying something new and something that you haven’t done before then I applaud you.

A condo or a project needs to stand out from the pack, the more people know about your project the better.

Events, tours are great and necessary but where the game really needs to change is online – and that is where most agents are operating like its 2004 - time to retool, re skill and compete in a new arena.

Do what you’ve always done and today you won’t get what you use to get!

Blood in the Water

Lehman, Merrill, AIG - Wow! What a week!

I remember thinking just a few weeks ago how tough the economic climate was AND was even quoted in the NY Sun about my perception of where the real estate market was going and how tough it was.

BUT if you were to tell me that those 3 financial giants would be "hammered" so hard that they would either "dead" or unrecognizable then I would've thought you were high.

But the unthinkable happened, the market is fundamentally worse now so where does that leave you, your project and your strategy?

What's Plan B look like or is is C or D?

Where is the smart money going to go?

There is blood in the water and the sharks are circling - what are you going to do now?

Marketing Synergy 2.0

How should Websites, Advertising, Blogs and P.R. work together in this connected world?

How do you connect all of the pieces?

Quick Story

I saw this huge development the other day.
Impressive product, priced right, great amenities – the full page ad with a great headline which had an offer which made me want to go online and find out more.
Sounds great huh?

And when I did get online to see it, guess what I found?
Just their same old website/online brochure.
There was NOTHING in relation to their new advertising promotion.
NOTHING, NADA, ZIP, ZERO!

The Ad did its job – everything else was a failure.
The Website should have had at the very least a new page detailing the offer OR an ad to click through on the landing page OR even better a banner on all of their pages.

How about linking their existing site to their own blog?
A blog that is updated regularly and has video?
A blog which has all of the key team members contributing and shares with us why they are doing what they doing and what they love about it and the lifestyle that the new owners are going to have there.

They should be sharing the cool stories which are taking place now as it is going up.
People want more info not less and they are taking more time and becoming more informed.

And where was the P.R?
They had a full page ad in one of the major daily papers and there was no other “pick up” of the project! AND there are a lot of angles on that project that they could promote which leads me to believe that their P.R is either non-existent or lazy.

Outstanding!

The goal of advertising in 2008 is to drive them online!
Sales is a multiple contact sport – the more you “touch” the higher probability that they will remember you and take action AND once they do take action then your components/team better compliment and enhance each other.

Once you get their attention you better know what you are doing – producing a site then thinking your job done is a blue print for failure in sales.

Your project’s online life and strategy needs to be constantly reviewed and updated if you don’t do that then you are your own worst enemy and the architect for marketing and sales mediocrity.

Superior 2.0 strategy is straight forward IF you now how to play this new digital game.

The Truth about your Marketing

People judge you now faster than ever.

They form opinions about you and your project before you ever see them.

In this digital world they judge your project by the website alone.
Prospects will make multi million dollar decisions on what buildings to go see and what to miss based on your digital presence alone NOT on the how good the actual building is.

Sure not all of the time but do you want to gamble on what the percentage is by trying to save on the place/website where they form their first impression? - and where they have their first contact with you?

Do you realize that the paradigm has shifted? The consumer gets to make an opinion before he ever sets foot in your project, before he ever meets your sales person.

So what is your digital presence saying about you? about your projects?

And who is helping you get that piece of your business not only right but head and shoulders better than your competition?

What's their strategy to navigate this brave new 2.0 world?