Magazine article Journal of Property Management

Marketing for a Quick Sale

Magazine article Journal of Property Management

Marketing for a Quick Sale

Article excerpt

As lenders take more and more rental property back, preparing a property for successful disposition becomes an important skill for the real estate manager. A successful sale is even more difficult when the subject property is distressed. Low occupancy, an undesirable resident profile, or a negative perception in the marketplace can limit the number of potential buyers and reduce the sales price.

Basically, there are two approaches to preparing a property for quick sale:

* Do nothing and take your chances.

* Implement a short-term marketing and management program to positively reposition the property prior to sale.

If executed properly, the benefits of taking the second approach can translate into significant financial rewards.

A case in point

A major lender recently took possession of a downtown high-rise apartment building in Chicago, with the intention of selling the property as soon as possible. The lender's immediate goals were simple: clean up the management operation, increase cash flow, and improve the property's physical appearance.

Our company, Trammell Crow Residential Services--North, was selected as the management firm to spearhead the project. When the company took over the 230-unit property in May 1992, statistics were less than encouraging: physical occupancy was 81 percent, leased occupancy was 82 percent, and monthly rental income was $138,000. The property also had 28,000 feet of commercial space, none of which was occupied, and a 262-space garage.

Time was of the essence as the property had to be turned around quickly. We had six months to take an unknown building in Chicagoland with a dubious reputation and "put it on the map."

Our initial impression of the property was that it had a great deal of potential. It was relatively new (only 4 years old) and in an excellent location on a major intersection.

The property also had some drawbacks. There was virtually no marketing program. In addition, the empty windows of the commercial space that surrounded the building were a neighborhood eyesore. Finally, although the property was located in Chicago's famed "Gold Coast," it was also only two blocks from a Chicago Housing Authority project. The location was considered dubious by some of the upscale renters we hoped to attract.

Nevertheless, we were optimistic, and with the help of of R.C. Romine, Inc., a Chicago-based real estate communications firm, we developed an aggressive marketing plan. Our goals were to:

* Positively re-position the property.

* Create leasing momentum.

* Increase occupancy.

* Increase property value.

* Sell the asset.

However, to achieve these goals in six months required something more than just sound marketing. It needed something dramatic.

The Picasso building

One of the big Chicago events of summer 1992 was the commemoration of the 25th anniversary of the unveiling of the Picasso sculpture in the city's Daley Plaza. Working with the city's Department of Cultural Affairs, we arranged for the property to sponsor a mural project honoring the Picasso's anniversary. Once the mural was completed, it would be installed in the windows of the commercial space surrounding the building.

The property would then be able to capitalize on the publicity surrounding the Picasso celebration. Our goal was to make the property be known as "The Picasso Building. …

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