Case Studies in Real Estate Marketing
White, Janet, Journal of Property Management
Case Studies in Real Estate Marketing Most people are only vaguely aware that companies like Procter & Gamble, General Foods, Chrysler, and Fruit-of-the Loom spend hundreds of millions of dollars each year to market their products to a fickle public.
While a block of office space or a new condominium is not exactly a bar of soap, the basic concepts of consumer goods marketing are being increasingly applied to real estate.
"Regardless of the nature of the project, the most important thing in real estate marketing is to have a clearly defined strategy," says Arthur Lohman, president of The Lohman Organization, one of New York's leading real estate advertising/marketing concerns.
Lohman says such a strategy has three steps: defining the audience, analyzing the competition, and determining the project's positive and negative attributes. Once the research is finished, Lohman says, the project can then be positioned with respect to the marketplace and the competition. Only then should the most visible steps in the marketing process--the brochures, advertising, models, sales offices, parties, and public relations--be placed into motion.
None of this work is inexpensive. Industry experts say that in cities like New York, Chicago, and Los Angeles, office building owners typically budget between $1.25 and $1.50 per square foot of building area for marketing, exclusive of broker commissions. For large residential projects, the range is usually between 3 and 5 percent of sales.
How these resources are allocated differs with every situation. The decision of how much should be spent on what medium for how long is usually the result of a combination of professional judgement, personal tastes, and budgetary discretion.
In examining marketing programs across the country, our interviews found that while their situations differed radically, all of them applied the same basic elements of "strategic marketing" to their leasing programs.
The Corinthian, New York City
In this city of rectangular edifices of glass and steel, the Corinthian's 180-degree bay windows make this 57-story residential tower at 330 East 38th Street one of Manhattan's most memorable.
Designed as a super-luxury, The Corinthian towers over a former airlines terminal building in the posh Murray Hill neighborhood near the United Nations. When it opened in the fall of 1986, the building competed against 30 other luxury condominiums in midtown, which were also targeted to wealthy buyers.
According to Jane Gladstein, vice president of marketing and sales for M.J. Raynes, Inc., the building's marketing agent, the Corinthian's size was its biggest problem and one of its best qualities.
"Many people do not want to live in a building that has 863 units, so we decided to turn its size into an asset. We made sure that everything was done on such a grand scale that no other building in the city could touch us."
One of the most common amenities in New York condominium buildings is a health club, but these usually have little more than an exercise room or a standard-size pool.
The 12,000-square-foot Corinthian Club features a 50-foot, glass-enclosed pool, separate whirlpool, gymnasium, aerobic warm-up rooms, saunas, steam rooms, changing facilities for men and women, and indoor and outdoor play areas for children, not to mention the juice bar and the landscaped, outdoor jogging tracking (with seven laps to the mile). Gladstein notes that the Corinthian's huge, private health club became a key selling point to buyers.
"The building was positioned as something that was going to have everything on a grand scale," Gladstein says," and that, coupled with the curveaway, or serpentine, architecture of the building, really set the tone for the marketing program."
Gladstein says buyers fell into three categories:
* People between 30 and 50 years old, most of whom already lived and worked on the East Side of Manhattan. …