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Real estate marketing, 1990s style.

Discussions about marketing in a tight economy generally fall into one of two schools of thought:

* cut expenses to the bone and focus on the basics of your business, or

* beef up your marketing budget precisely because your competitors have slashed theirs.

Within the real estate industry, however, a third approach has evolved. Spending for its own sake has been replaced by a demand for creativity combined with cost effectiveness.

With spec construction at a standstill, real estate marketing is now directed toward leasing empty buildings, repositioning older and often rehabbed projects, filling blocks of subleased space, or doing double duty to market a company's services to clients while recruiting tenants for its projects.

Just a few years ago, when the industry was at its peak, some owners spent between #1.00 and $1.50 per square foot to promote their projects. Now, budgets can range from $0.40 to $0.75 per square foot, and the emphasis is on economics and effectiveness, rather than glitz and glamour.

"You have to pick what you do much more carefully and make sure you're getting the maximum value for every dollar," advises Arthur Lohman, president of The Lohman Organization, one of New York's leading marketing professionals for more than 30 years.

"That means you can't do a lot of things and make big investments in positioning and image building that you might have been able to do in the old days. You have to make less money achieve a lot more results, and you have to aim your messages at your target audience very specifically," he says.

The combination of intense competition for brokers' and tenants' attention and reduced budgets also has resulted in a shift of tactics: from the broadbrush, "shotgun" approach to the more targeted, one-on-one "rifle" method.

For example, much to the chagrin of many trade and business magazines, advertising, the traditionally favored method to promote a building, has been eschewed in favor of parties, mailings, and, when appropriate, a short video.

In other words, the rules of the game have changed, as the following examples demonstrate.

Stamford Towers

Over the past decade, Stamford, Connecticut, has grown out of its dependency on corporate relocations from Manhattan to become a self-sufficient, economic center of Fairfield County, a suburb north of New York City.

Stamford's property woes were a precursor to Manhattan's: there had been a burst of new construction in the mid-1980s, and all that space came on line just as companies downsized and the recession gripped the Northeast.

Stamford Towers is typical of many partially vacant buildings in the city's central business district. Completed in 1990, the 325,400-square-foot complex has two glass-enclosed, 11-story buildings, a host of tenant amenities, state-of-the-art building systems, and great views of both the city and Long Island Sound.

It also has plenty of competition vying for the same tenants. "Owners are looking for new and innovative ways to market their buildings," notes John H. Rostenberg, principal of Rostenberg-Doern Company, brokers for the building. "There are so many 'just another buildings' around that you have to do something different, yet professional, to attract attention."

To Rostenberg-Doern, "different" meant "Hollywood." For its brokers party, tongue-in-cheek tours of Stamford Towers were conducted by "studio guides," actually actors posing as Harpo and Groucho Marx, Lucille Ball, and Marilyn Monroe.

"We had these actors set up at different stations selling the various points of the building as the 200 brokers came in," says Rostenberg." Instead of saying something about the building directly, they made it part of a skit.

"The Harpo Marx actor did a pantomime describing some of the building's amenities, using another actor as a foil. It gave us all plenty of laughs, made our points, and at the same time made people feel that they weren't being oversold."

Direct mail also played an important role in Stamford Towers' four-month long marketing campaign, with four four-color pieces sent about two weeks apart before the party, and two this fall.

The mailers highlighted the buildings' advantages by tying in the "Hollywood" theme, using twists on "Location Scout" (CBD location), "Backstage" (tenant amenities), and "Set Design" (architecture).

"With so many properties available, prospects are inundated with every sort of mailing," said Rostenberg. "We tried to make our mailing look much different than anything else they are getting, but not too gimmicky."

Lake Center Corporate Park

To most people, one suburban office/industrial park is pretty much like another. And the materials used to market their space or sites often have a dulling sameness - poor graphics, tiresome copy, and slipshod printing.

But for the Chicago-based Alter Group, the country's 15th largest design/build developer, marketing its projects is an exercise in new business development for the firm's services.

"Our leasing brochures are really corporate pieces," observes Nikki Block, senior vice president, who develops and coordinates all marketing activities for The Alter Group's seven affiliated companies.

Although the company had been in business since 1955, it was not until 1988 that Alter took a pro-active approach to marketing. In the late 1970s, the development concern shifted its focus from leasing up its spec buildings to providing build-to-suit services to corporations. But by the late 1980s, competition from other developers had become intense.

"In marketing build-to-suits, we're selling our professional capabilities as well as the quality of our product, and that requires a much more sophisticated approach," Block notes.

"Subtle" is perhaps a better word. For example, Alter intentionally keeps its projects off the covers of its brochures. Instead, there is a dramatic, four-color photo depicting a major selling point, such as location. The inside text is written to entice and entertain, as well as educate.

A typical example is the brochure for Lake Center Corporate Park in Mount Prospect, Illinois. The park is near O'Hare Airport, a factor of great importance to multi-national corporations seeking headquarters or regional office space. To visually express the location, the cover shows two jet planes soaring high into a royal blue sky above a sea of puffy white clouds.

The brochure notes that the project is only seven minutes north of O'Hare, and "from there, you can get to New York City in 2 1/2 hours, San Francisco in 4 1/2 hours, London in 5 1/2 hours, Tokyo in 13 hours, Beijing in 17 1/2 hours, Hamburg in 7 hours, Paris in 6 1/2 hours...."

Each of Alter's brochures follows a strict design format, with changes in the copy and the pictures for each project. The result is that each brochure is unique, but is similar to all the others.

"We chose that approach because these project folders fit into an even larger corporate folder. My approach to promoting an office or industrial park is that I'm really promoting The Alter Group," says Block.

Anadarko Tower

Anadarko Tower, a 450,000-square-foot office building, is the first major commercial building to break ground in Houston since 1984. Its anchor, Anadarko Petroleum Corporation, will initially occupy 250,000 square feet, leaving 200,000 square feet to spec tenants.

Now under construction and set for completion next July, the 19-story building is part of The Plaza at Greenspoint. The 2,000-acre mixed-use complex near Houston Intercontinental Airport is being developed by Friendswood Development Company, the real estate subsidiary of Exxon Corporation.

Friendswood is seeking a "mini-anchor" to lease 60,000 to 70,000 square feet, as well as numerous firms needing 10,000 to 15,000 square feet. This strategy will allow Friendswood to readily accommodate Anadarko as it expands. (The oil company is expected to occupy the entire building eventually.)

According to Tom Wussow, Friendswood's manager of commercial properties, the ongoing leasing for the Plaza at Greenspoint will pick up when the building is topped out in October. Special events for marketing will include publicity in the tower in local and trade publications, a brochure, newspaper and radio advertisements, tours of the complex's marketing center, brokers' parties, and a topping-out event.

Yet, despite this flurry of activity, Friendswood's approach to marketing the new building remains low-key and focused on offering competitive terms and providing an environment appealing to blue-chip corporations. The success of this approach is evident; the complex has maintained an occupancy rate in a high 90th percentile, even during Houston's hard times in the 1980s.

"Essentially, we have very little available contiguous space today, and we've had to turn down major tenant after major tenant because we have no place to put them," Wussow says.

To recruit the best firms to the new property, Friendswood is running full-page and two-page spreads in major real estate and business publications in which Anadarko and other happy clients do the talking.

The decision to use testimonials was inspired by Robert J. Allison, Jr., chairman and CEO of Anadarko, according to Wussow. At the press conference announcing the new tower, "Bob told the world why he wanted to be in Greenspoint and why he decided to stay there. And we said, 'Gosh, you can't pay for that.'

"We decided to go back to satisfied tenants and capitalize on that. Our feeling is that the developer and the major tenant are a team. That's been our philosophy forever."

The ads promote both Greenspoint and Friendswood as a leading, corporate-oriented developer of Houston's premier mixed-use projects.

The best of olds and new

While the glory days of eight-color brochures and mahogany-lined leasing suites may be over, marketing remains a crucial part of the real estate industry.

As these three examples demonstrate, the big difference in today's marketing is on selling the substance, not the sizzle. Corporate image plays a much greater part, as companies use their scarcer dollars to best advantage. Creativity is also more important, as companies seek to differentiate themselves and their buildings in the minds of tenants and brokers.

Janet White is a Dallas-based freelance real estate writer and is president of White Marketing Services, which provides public relations and writing services to commercial real estate owners, investors, developers, and consultants from Texas to New York.
COPYRIGHT 1991 National Association of Realtors
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:White, Janet
Publication:Journal of Property Management
Date:Nov 1, 1991
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