Five Market Repositioning Collaborators That Your Development Should Invest In During Covid-19

Optimistically, the hopes of our industry to turn the corner look to be around mid-May to June at the earliest. There are still a few new development contracts being signed and closings still taking place, albeit with a COVID-19 rider + other stipulations. The most important action that development teams can take now is to prepare for the recovery phase and be ready to move immediately when the market enters the inevitable “new normal” cycle. The actions that your team takes in the next six to eight weeks to reposition and refine how your offering is presented will be critical to ensure that you are best positioned to recover faster than the market average.

As of today, it is highly likely that you have done an in-depth review of your budget and operating costs. You are reevaluating what things are must-haves and which of them are nice to have. This evaluation is critical now more than ever as developments need to stand out from one another, and appeal to a broader target market than they have ever needed to before. In order to be memorable in a sea of similarly priced offerings, development teams need to engage diverse and innovative collaborators; we need to embrace new perspectives that show us how things should be done in this new environment.

In 2019, prior to launching Butterfly Voyage, I conducted six months of in-depth interviews and focus group research with developers, equity partners, and marketing firms. I learned that 40% - 60% of teams work with a recurring group of collaborators over multiple development life cycles, with the same collaborators also working for competitors. The result was a product-market representation that looks and feels similar as well as undifferentiated, now compounded by a demand constrained market.

This is also a great moment for highly qualified and emerging talent + companies to enter the real estate development sector and offer competitive pricing to build what will hopefully grow into rewarding long-term client relationships.

Here are the five repositioning collaborator disciplines that are a must-have for developments currently on the market.

00
The Person Already On Your Team: Market Repositioning Expert

This person is most likely on your team already but you haven’t focused on identifying them yet. These experts operate as a subset of the development marketing discipline; repositioning is a highly-specialized area of expertise honed over multiple market cycles. This uniquely tests one’s ability to wear multiple hats and successfully operate + execute initiatives on a very thin margin, while working closely with pricing and research experts to determine what the adjusted expectations per square foot will be. It is a nuanced set of skills that requires empathy + interpersonal skills as much as experience to help hold teams and contracts together in stressful times; an entirely different exercise than what is required during the excitement of pre-development or pre-launch marketing.

Repositioning experts often begin with a full marketing budget audit, then respectfully negotiate current vendor contracts as well as find innovative (less expensive) solutions to execute new ideas and initiatives. The goal of a market repositioning expert is to keep the development timeline moving and help inject new energy into the team while propelling forward new ways in which to rent or sell homes. Most importantly, this person must be able to drive decision-making and provide a clear rationale to support why - the team must make decisions period in order to move towards a successful outcome.

01
Visualization Technologies

We will be selling things from a distance for the foreseeable future. There are many offerings when it comes to technology, and companies purely dedicated to real estate often have a wide suite of services + products. My advice is to first make a list of your needs while prioritizing and scoring them, and only then do in-depth research for the right technology-based products. Based on your needs, you may be better off approaching a qualified firm in adjacent verticals such as hospitality and inquire if they would be willing to adapt their product to your needs. Otherwise, you may end up spending more time listening to complicated sales pitches without first establishing if the offering being pitched actually fits your needs. Evolution Virtual and Transparent House are two established and experienced companies that offer 3D and interactive products specifically for real estate development marketing efforts.

Matterport, established in 2016, is a newer entrant to the built environment and offers pristine visuals that may need more refining to be consumer-facing, but the technology and technical quality are there. I have also been impressed with the quality of work coming out of Eleven and NoTriangle Studio when it comes to visual assets. Consider telepresence robots like Beam, to allow for virtual showings where potential clients can tour the model residence remotely with an agent online to support the viewing.

02
Creative + Branding: Live Marketing

You don’t need a complete rebrand. You need a content adjustment that is relevant to the offering and market. With branding (most likely) fully executed with print and digital assets in place, the current collateral needs to be looked at under a magnifying glass to ensure that the points are relevant to the current market ecosystem, product, and revised target audience. Perhaps you need a new digital rack brochure or a round of refreshed neighborhood photography that does not showcase a crowded farmers’ market; social distancing will cast a strong shadow for a while to come. You might need refreshed digital advertising assets created to indicate a leadership philosophy that appreciates the nicer things, yet is socially-aware. Billionaire David Geffen thought he nicely told the world that he was in isolation on a luxurious yacht; in response, the world clapped back.

Butterfly Voyage has interviewed more than 100 creative and branding agencies that fit this description, we would recommend first looking towards companies started by executives from established firms as they have the background that respects all of the efforts that go into establishing a brand, yet also the nimble and entrepreneurial company mindset that allows them to execute work quickly. Some notable agencies that I have been impressed with recently are OneHouse Creative, Wicked+, 12 Locks, and DD London.

03
Digital Strategy

Digital marketing offers the most valuable return on your investment, and a higher cost to value ratio that is acutely measurable — data does not lie. At this juncture, your print advertising budget needs to be $0. Print is a beautiful medium, but time after time over the last three years, digital returns outperform print as there is no way to actually measure the ROI on a print piece. There is also the issue that print is a tactile medium, and no one wants to touch anything more than they have to these days.

Digital marketing offers the opportunity to concisely target potential sources of leads, and allows for an expansion into a more global environment without the cost of travel or product showcases, and can be adjusted in a timely manner. 6 Degrees Group is a highly-lauded and experienced firm that primarily does work on the West Coast, Knightsbridge Park focuses on specific market verticals + is a Premier Google Partner, and FrenchCA offers digital strategy alongside a vision for elevated brand partnerships.

04
Staging + Partnerships

In order to be perceived as differentiated, your product must not look and feel indistinguishable from everything else out there. It may be too late to backtrack from yet another kitchen with an all-white finish palette, but you can make design and FF&E adjustments that express the unique personality of your offering to ensure that it stands out. Due to the highly-virtual environment that we will be operating in, this is also a great time to explore partnerships with established and recognized brands as they will be open to new business opportunities to connect with an audience of potential customers. In return, there is a consistency of quality that an established brand possesses that you will communicate with your audience, another valuable asset for your offering.

In 2010, during the dark days of the post-Lehman down cycle, I was the sole on-site sales agent for Soho Mews on behalf of Corcoran Sunshine. My team engaged Hearst as a part of their Designer Visions initiative for the townhouses and two of the four penthouses, which were then priced at a record price per square foot for Soho. It worked - we ended up with highly qualified and exciting traffic, subsequently selling beautiful homes to a number of high-profile purchasers (including Justin Timberlake). Scaled up, this can be explored more via in-situ art placement with Saatchi, virtual staging via IBD or collaboration with West Elm, who has already proven their ability to think ahead by designing virtual work environments.

05
Amenities Planning

The expectations of where we call home from a multi-family perspective have changed; welcome to the concept of “social-wellness.” Your amenity space is already mapped out and programmed, and operational in some cases. It is a great time to explore minor programming adjustments and acknowledge your potential client base who will (by choice or mandate) work from “home” in the future. Landscaping design is often something that is value-engineered a bit too often as budgets are refined over time. With the scars of social-distancing still likely to hold for at least another two years, offer future residents outdoor “moments” that will allow them to feel like they are part of a community, yet can find their own space.

A communal garden to cut down on grocery store trips curated by a chef or company familiar with the local climate such as Zeterre ties back into the community. “Vending” machines with healthy (and desirable) options in mind contribute to overall well being. Additionally, potential clients will almost certainly begin to look more closely at building operating budgets and exactly what is included; now is also a good time to do an intensive refresh with your client-facing team so that they have those answers right at hand.

Next time, I will touch upon needed collaborator types for developments that have secured financing and are thinking through pre-development planning but are not actively marketing yet. Until then, I hope that you and the ones that you care about stay safe and healthy.