Dear Real Estate Development, The New Normal Is Here.

“Change is inevitable. Growth is optional.”
~ John Maxwell

Welcome to the new normal. A place where we must begin to act in ways that we have never needed to. Over the past few decades, real estate development has always been one of the last industries to embrace new thinking and new technologies. If we don’t adapt our thinking, design processes, and the customer experience for our products to meet demands, our industry will struggle more than is necessary to recover from this recession. The impact of COVID-19 is here to stay, at least until a tested vaccine is in place.

Over the past few weeks, we’ve joined virtual new development open houses + tours across the United States, and almost all beautifully represented their developments in a technology-appropriate manner; what we found to be the most shocking was that so many presentations did not actively acknowledge or vocalize the existence of COVID-19. Many glossed over questions about pandemic related marketing, financing, and best process practices plan to address “the new normal.” Most importantly, so many of these tours did not highlight how existing features, finishes + amenities would be structured going forward as the United States moves to actively reopening.

Our industry must first begin to actively acknowledge COVID-19 and move toward highlighting how its effects are being addressed by our developments and teams. We must accept the new normal has begun, and work towards adapting + repurposing existing materials + the user functionality of common spaces.

01
What Must Change

The customer journey and resident experience. Buildium published this excellent piece that details how property managers can help to protect their buildings. Appfolio has provided a few very general guidelines that can be applied to buildings across the board. There need to be clear guidelines and processes set now (which is already late) that can be consistently communicated, applied + adhered to. Peter Lane Taylor wrote a piece for Forbes that offers excellent insight into the Miami new development market and discusses how three developers are adapting their offerings to reflect facets that will be important to people as a result of COVID-19.

Embrace new technologies. Stop waiting for another development team to do it first. Sensors, touchless + keyless, voice recognition, optical recognition, fingerprint scans - these are all areas where there is and will continue to be a tremendous amount of growth, which will begin to drive down costs and allow for scale. Samsung released an insights piece, which discusses which of these technologies are the most secure. For developments currently on the market, we advise beginning with immediate protocols and then moving towards evaluating + bringing in the types of technology that will ensure a touchless environment.

Understand and translate data + analytics. Moving forward, data needs to be the primary decision-making driver for any kind of marketing spending. Data is binary, clean, and satisfyingly accountable when active or planned budgets are on tight margins. BV recommends talking to your favorite digital agency and asking them to set up a short paid workshop (even if they are not on retainer yet) where they explain how data should be interpreted, what aspects need to be factored in during each phase and then close on best practices. Too often marketing team members are siloed from customer-facing team members; you can no longer afford for things to be lost in translation or “it’s someone else’s job to understand that, I just do x.” Google also offers tutorials via its Analytics Academy if you only need a quick introductory course or refresher.

Decision-making structure. The highly accelerated timeframe in which new ideas need to be taken from the conception, discovery, execution to delivery phases is even shorter than before. We advise looking at two tiers of decision-making time frames - first, immediate needs (implemented within 30 - 45 days) and second, longer-term needs (implemented within 60 - 90 days). This approach allows for discovery + research of new ideas to be completed but also forces teams to smartly use the time of their team members for things that need to be implemented yesterday.

01|Discussion Starters

Do we have a COVID-19 marketing plan in place and how are we acknowledging + communicating it?

What are the best tools + language to communicate this to our customers? Have we asked any for feedback?

What will give our customers the most confidence in our development when it comes to product execution + delivery?

What technology do I want to learn about/more about? Who can help me learn about it?

Is this an immediate need (within 30 days) or longer-term needs (60+ days)?

02
What Remains The Same

Home is where...everything still happens. Homes remain and will remain the most used product of 2020, as well as one of the largest investments someone will make from both a financial/rational + emotional perspective. More and more companies are announcing mandates to work remotely for the remainder of 2020; the demand for smartly-planned communities and residences is only going to continue to increase.

Developer reputations should now be strongly emphasized as a marketing tool. The reputation of the development team has always been important; now it is so important to ensure that this messaging is pristine when it comes to demonstrating team experience, portfolio, reputation, prior work, and record of resident satisfaction. Unfortunately, past recessions have resulted in some teams cutting corners, reducing quality, and not delivering what they promised they would. It is well-documented that a company’s good reputation positively affects pricing and the quality of customers/offers which it attracts.

Craftsmanship + materiality. If your development has beautiful materials or fine custom craftsmanship in place, highlight those features, and have an in-depth review to see which of them are or can quickly be adaptable. Customers will expect + demand great design elements executed by experienced teams. Supply chain disruption is going to be felt for a long time as COVID-19 makes its way around the world, so if your materials are secured or in place, it’s a great time to think about how to communicate about them even more.

Virtual tours are here to stay. These have proven to be an excellent pre-screening tool over the last eight weeks, and the good news is that technology is only going to improve and become more cost-efficient as more firms enter this rapidly-growing market. Dezeen recently highlighted some incredible things that are happening in virtual reality. Boston.com recently shared some reactions to the abundance of virtual tours in response to COVID-19. The summary - they are not going anywhere, but they may end up being a pre-screening sales tool.

It’s time to genuinely embrace social media. We know that it has established itself as a major communication medium, and will continue to grow. TikTok is in its early days, but it should be on your radar given its exponential user growth recently. This piece from Luxury Branded highlights some top-tier agents who are finding success with the platform. It is also just as crucial to be aware of the backlash from social media + the new ideas that are being tested to provide more personal engagement, discussed earlier this year by the Harvard Business Review.

02|Discussion Starters

What adaptations/decisions do I need to be informed about today so that I can help design the homes of the future?

Do I really understand how to read + interpret data?

Based on my data, are virtual tours primarily proving to be a screening mechanism or can we adapt them for more?

What else does my development need to put out there to engage with my customers?

Do I really understand all of the major social media offerings out there so I can decide whether to pursue them?

03
Where to Find Inspiration

So much knowledge-sharing and creativity are happening in these times; we are finding the ideas coming out of neighboring sectors fascinating, inspiring + empowering. This McKinsey piece about the future of retail discusses immediate and longer-term challenges that luxury goods will encounter in the COVID-19 world. Emirates Airlines has introduced one of the most detailed plans for both customer and employee safety.

Shou Sugi Ban House in the Hamptons has created + proactively positioned one of the best hospitality client experience plans that we’ve seen. Titled the Elevated Stay Commitment, it is easily accessible on their website and ensures customer confidence that they are choosing to stay somewhere that has thought of nearly everything in such a refined manner.

Paris has resumed its famed boutique shopping recently, with Vogue Business documenting the experience. Real estate development sales and rentals are a type of luxury product, there is a lot coming from the high-end retail + hospitality sector that can be adapted to our industry. Our real estate “galleries” are primarily experiential and combine an analog experience with technology to best demonstrate our offerings. We have the advantage of being able to control our appointment timings; what we need to focus on immediately is setting consistent best practices and communicating that in an elegant + seamless way.

03|Discussion Starters

What is the new luxury showroom-based retail client experience?

How can I incorporate pieces of it into my customer and resident journeys?

How else can we make our customers feel comfortable + relaxed in order to purchase or rent their next property?

In closing, It is our duty as professionals in residential real estate development to evolve faster than any other sector as our homes are being used more than any other product. Homes are the iPhones of today, everyone who is fortunate has one. Are we anticipating our customer needs, moving + reacting fast enough? As of today, we are not.

A thank you to Butterfly Voyage contributor Basma Rajper. Her valuable research, insights discussion, and support were a key part of making this piece come to life.