The first in a series of caffeinated idea shots to give your projects a high-octane jolt
High Interest rates. Escalating construction costs. Labor shortages. Market Uncertainty. Limited leasing traffic. Lack of a clear path forward. Drop into a Starbucks at 10 a.m. on any given Wednesday and you’ll spot the cluster of real estate guys and gals huddled over their no-foam lattes in the corner. These phrases and words rise above the din of their conversation, punctuated by the occasional sigh and a statement – it won’t last forever. Is this 2023, or is it 2008 and 2009 revisited?
^ a live look into the all-too-common “marketing” strategies we see out there
Red Propeller was founded in 2008. We know, not a glorious time to start a real estate consulting and marketing company. While those years were difficult (and painful for many), creative thinking helped solve immediate challenges. For organizations who looked to the future, a foundation was laid to emerge faster and stronger when the market rebounded.
What did successful developers and owners do in 2008 and 2009 that propelled them forward? Broadly, we believe the “winners” focused on three distinct areas:
- Focus on stabilizing existing assets by delivering value versus cutting cost;
- Develop focused marketing and sales strategies to ensure new projects deliver with confidence, despite shoestring budgets;
- Think creatively to transform market-disrupting opportunities into shovel-ready developments.
Regarding 1 + 2, Owners and asset managers that were willing to step off the marketing and leasing treadmill to try something new or different prevailed. Dropping prices and adding more concessions is a race to the bottom. With limited traffic, firing on all cylinders is a must. Align your people, product, and promotion to ensure messages reach a targeted audience in the right place with unique personality. All this before reconsidering price.
On to 3. During the recession, savvy developers crafted a future vision for investors, and then moved fast in pursuit of land deals and pre-development efforts. When conditions turned, they were the first to market with new, fresh product. They were the big winners coming out of 2008. What’s the lesson here? Be ready for opportunities. Better yet, think creatively to create opportunities. Deals that weren’t there during the hot years will appear. But we can’t say it enough – be sure to bring your creative hat. Tried and true will almost certainly need to be replaced with new thinking to make that deal a big winner in 2025.
While underlying conditions are different today, many of the lessons of the recession are valid now. But the knowledge needs to be applied in a different way, because while the market may have similarities to 2008/2009, it has different drivers, and it will be unique. Industry experts think so too. The theme of the ULI Emerging Trends in Real Estate Report for 2024 is “The Great Reset.” ULI notes that “the industry must form new ‘norms’ and can no longer rely on past benchmarks to determine how the market will function in the future.” Sounds a lot like an opportunity to us.
So, are you in the coffee shop? We can help. In the weeks ahead we will be releasing a series of quick read stories. Think of them as espresso shots for your creative mind as you consider how to win in 2024. Topics will range from training front line staff to thoughts about the Centennials and their desires to auditing your marketing efforts and more. We hope that you’ll ride along with us and engage in the conversation as we go.
Jim Goldberg, Stephen Fina, Derek Lunde, Aubrey Cohen
Team Red Propeller