Lennar posted a gain for seven quarters. DR Horton, KB Home – doing fine. How many local builders do you know who are “doing fine?”

But let’s say you refuse to be weeded out. Fair enough. After all, you’ve worked too hard to give up. The local community knows and trusts you. You’ve earned your reputation with excellent service. You have a right to exist.

You’re a builder. So build. Maybe not homes or communities – at least not right now. Build PARTS of homes, a.k.a. rehabbing.

The people who trusted you to build great homes will also trust you to turn old interiors and floor plans into brand new ones, build additions and give tired kitchens, baths and basements a new lease on life.

There are no national rehab companies. Rehab is a local game. As a seasoned local builder, rehabbing is well within your ability. You just need to rehab you business model a little, so you can weather the storm.

When the market recovers, your name will have endured because you never stopped building lifestyles. You’ll go back to homebuilding but with an increased sphere of local influence.

Consider that 90% of the NAHB is made up of homebuilders who build only ten homes or less, annually. Small, local builders are in the vast majority. Let’s keep it that way. Weather the storm any way you can.

Rehabbing is merely one option for local and regional builders intent on keeping their name alive no matter what. For more options, contact us.

– Garrison Insider

…in order to overcome the market-rate anxiety of participating in the social experiment,” says Garry Benson, president of Chicago-based residential marketing firm Garrison Partners, which has worked on two other mixed-income projects near Cabrini-Green. “If you start off having to offer below-market value, when the market drops, you can’t drop your prices below your costs.

Last time I was in Crain’s, readers posted some rather spirited comments in reply. Here’s an example:

Garry Benson, are you insane?

I love questions like that. Which is why I responded with a blog post on December 7th. You can scroll down one entry, it’s my mini-manifesto on why things might, MIGHT, be turning around.

To read full Crain’s article on Cabrini Green bailout (if you’re in Chicago real estate, you probably should) click here.

Garry

Two weeks ago I hazarded those same powder-keg words in a very public forum – a Crain’s article. But I based my observation on HARD FACTS and observations after witnessing 43 units (over $11 million dollars worth of real estate at about $278 per square foot) sell in 90 minutes. 90 minutes!

Yes, it was an auction. And yes the average purchase was 25% below last asking price. But the sheer momentum indicates something exciting is afoot. Namely that SOME people are very interested in buying real estate again.

Garry Benson: Are You Insane? That was the question posed on the Crain’s comment board by one Ryan C, arguing that I sound like a “snake-oil salesman,” as if I had some sinister ulterior motive, as if we in the industry are all in cahoots trying to hypnotize the buying public with disingenuous bullishness.

My answer to you Ryan is if I’m insane, it’s the good kind of insane…insane for loving this topsy-turvy industry, even the downturn, because the challenges energize the hell out of me. I don’t make my declarations lightly. If there’s a “buy now!” conspiracy going on, I’m not part of it. In fact, half my day is spent advising certain clients NOT to buy, at any discount.

And stop focusing on the deep discount, Ryan. It’s the fact that people bought at all. A good old-fashioned buying frenzy. That speaks volumes about that particular market, and other related markets, in my opinion.

My opinion doesn’t matter? Fine. But look at the CASE-SHILLER Home Price Indices that have shown an upturn in most major markets. Does it mean we’re in for sunny skies in Detroit? No. (Let me know if you want a link to the study, I’ll email it to you.)

FINAL ANALYSIS The auction is merely proof of this: some people are buying up real estate AGAIN, with a hunger and urgency I haven’t seen in a while. These are our SAVVIEST buyers and they are not waiting. I’m clearly not alone in thinking things have stopped going down, Ryan. I’m joined by a mob of people who put their money where there mouth is to the tune of 11 mil.

Ryan and other detractors, let me know your objections to my logic, if any, and I’ll be happy to continue this conversation right here.

Best,

Garry

For more information about our services, please visit our main website at www.GarrisonPartners.com or call our corporate office at (312)750-1610.

To read the entire article at Crain’s Real Estate Daily, click here.

I’ve got some bad news and good news

The bad news: we’re seeing lots of hysteria among bankers and developers right now.

The good news: we’re seeing lots of hysteria among bankers and developers right now.

Yes, hysteria can be a GOOD thing. It sure beats the paralysis, denial and blaming we saw so much of in the first half of the year.

HYSTERIA breeds ACTION, because hysteria doesn’t mess around. Hysteria knows that doing nothing spells disaster.

The action to take right now is to actively KNOW THYSELF. Hold up a new mirror. Forget your stories, biases and pre-conceived ideas of what your property is and what it’s capable of doing. Throw away your old pro forma. Everything is different now.

Deals today either have hope or they don’t. If you’re still living with a wait-and-see attitude, now is the time to step up and say no more.

You have three options:

1. Stay the course while making adjustments. Look at your property as if it’s new. Rethink your product and your market and make it work. The buying base is out there and it’s so damn narrow. Look at it with a microscope, because like an uber-virus it keeps changing and morphing. Who’s actually buying? Do we have the right amenities? What should our pricing be?

2. Radical adaptation: a condo becomes a rental building. A hotel becomes a condo. Take a fresh look at what you have to work with. What efforts and infrastructure can you  SALVAGE and parlay into a new kind of property?

3. Cut your losses. Unleash this puppy and move on. It’s sad, but it’s better than doing nothing. The earlier you accept defeat, the easier it is to minimize the damage. You’ll be happier afterwards, like a weight has been lifted and you can plot a new course, having maximized your outcome.

Your product is either a 1, 2 or a 3. If you don’t know which, you’re not alone. We’ve been all over – projects from the South Loop to the Gold Coast, from Boston to Idaho both downtown and burbs – helping people discover if their project is a one, two or three, and helping them plot a course. They’re sick of being in the dark. “Know thyself,” is becoming very popular.

Find a third party to hold up a mirror. My partners and I used to work on the development side of the deal with big companies with huge portfolios. That’s where we learned the business. WE GET IT. We’re wired to make your problems our problems.

If you can’t use us, find someone like us – seasoned site advocates, not a mere brokerage with broad listings and a sales-only mindset. If you have a question or just want some clarity, post a comment or contact me. That’s what this blog is all about.

Embrace the hysteria, folks. ’09 is coming to a close. The future of real estate belongs to those who dare to be self-aware RIGHT NOW and perform the proper analysis and diagnostics needed to move boldly forward.

Good luck and Godspeed,

Garry

For more information on Garrison Partners’ services, please visit www.GarrisonPartners.com

www.youtube.com/watch?v=lvPyaEYkGG0

For more information on Garrison Partners’ services, please visit our website at www.garrisonpartners.com