First off, thanks for all the comments, emails and support. I’m excited to be doing this blog, and it comes at a perfect time because there’s plenty of real-world examples that I can draw from right now.
Case in point: The Point On The River, a true “rise of the phoenix” situation that we became involved with in May of ‘08. I’ll be reporting ongoing insider info on this Milwaukee condo development, right here on Garrison Insider.
The developer for this 147 unit condo went into bankruptcy and the project went into receivership. A consortium of nineteen banks (that’s right, NINETEEN!) hired a new developer, Mandel Group, who in turn, hired us, to reposition the project and take it back to market – and hopefully do something about the existing debt.
Only about 30 homes were under contract or closed. There was no sales center. It was one of a million projects conceived during good times, but it didn’t stand a chance against the dramatic economic changes that have left the industry reeling.
The lenders needed to make a choice. Cut their losses and get out, or go for the bigger payoff by giving the project a final push, a breath of fresh air. In our 2.5-inch-thick proposal (19 copies) we encouraged them to go for the latter.
The property, previously named First Place On The River, needed a new name, a new image, a new sense of credibility. More importantly, it needed its value re-established; not by slashing prices, but by adding substance.
This brings me to an important insider tip: when competition cuts prices, sometimes the best defense is a great offense. Go on the offensive by maintaining or even raising prices, and building in new amenities and quality, thereby re-establishing an effective price-to-value relationship. (More on this in a new video, later this week.)
The bankers, following our proposal, reinvested in a new lobby, sales center, hallway amenities, a social networking room, movie theater, a wellness center and a high-end business boardroom. Also added were $1 Million+ penthouse plans on the top three floors.
The result, a phoenix rises from the ashes. Units are selling again, at
higher average price points than before. We’ve sold 30+ units since February, in a market that’s only had 138 sales in the first half of ‘09, with at least 25 projects competing for equal market share.
The Point outperformed five times its natural market share. The property wasn’t doomed after all, it just required the right approach.
I happen to be writing from Milwaukee right now. I’ve been hands on since the inception of this project, and I wanted to be here physically, at The Point On The River, to make sure our plans were, and are, executed properly.
Truth be told, I live for this stuff. Nothing makes me happier than seeing a “doomed” property rise from the ashes.
I know at least 19 others who feel the same way.
Stay tuned for more broad-spectrum real estate wisdom on this community and other assignments Garrison Partners is working on.
Great post – I’m showing this to everyone in my office.
Gary,
Great point “Keep fighting” we are starting to see a slow turn with our clients too. Even though it’s not going gang busters there are projects going and alot of our clients ready to move when the time is right.
[...] when I talked about the rebirth of a doomed project a few weeks ago? I likened it to a “phoenix rising from the [...]
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Garry,
Sometimes things that seemed doomed just need to be placed in a new light. Great work on saving that project. Have a great week in the business.
I actually like your thinking.
Have you ever considered adding more videos to your blog posts to keep the readers more entertained? I mean I just read through the entire article of yours and it was quite good but since I’m more of a visual learner,I found that to be more helpful well let me know how it turns out. This is good…thanks for sharing
Hello – just a brief note to say kudos for this article. Very good.