Drones, Databases & Deals
- May 10, 2017
Not so many years ago, John Sebree caught his first glimpses of a flash drive loaded with marketing materials and CDs containing entire marketing books. Back then, the tools seemed like novelties; “Now I look at those two things and that seems archaic,” said Sebree, first vice president & national director of Marcus & Millichap’s multifamily group.
Technology offers investors and their advisers a menu of marketing tools that seemed unimaginable just a few years ago. Brokerage firms are upgrading their websites, dispatching drones and employing virtual reality to heighten the drama of their presentations.
“Trackable and measurable platforms are our preferred tools in marketing,” observed Cindy Cooke, senior executive vice president with Colliers International’s metro Phoenix office. She estimates that digital tools account for about 70 percent of her team’s marketing efforts; paper makes up the remaining 30 percent.
Cooke’s team uses DropBox for Business with password protection to share documents in the transaction stages. Brochures have been replaced by Squarespace, which serves as a single-property website, has a distinct domain name and tracks visitor traffic.
Opinions vary about the impact of the new paradigm. Some professionals say that digital marketing makes it harder for investors to locate off-market deals. Others argue that a scarcity of off-market opportunities stems from owners’ desire to avoid exposure.
Paradoxically, technology simplifies some aspects of the sales process while making others more challenging. “It is easier to get quick exposure, but it is harder to make sure your potential buyers stay engaged and tour the property,” contends John Blackshire, a senior associate and multifamily finance specialist based in Transwestern’s Denver office. “That still involves hard work and picking up the phone and making hundreds of phone calls.”
And nothing takes the place of shoe leather, according to Marcus & Millichap’s Sebee. “Once you get past the initial review, there is no substitute for driving a neighborhood and walking a property and understanding the operations of that property,” Sebree explained.
Professionals maintain that email blasts remain the best way to reach a wide audience. NAI Tampa Bay starts with a mailing to the firm’s private client database and follows up with phone calls. “Nine out of 10 (listings don’t) make it past our private client database,” said CEO John Burpee. “If we’ve done our job correctly, we’re able to identify that buyer pretty quickly.”
Although e-blasts are the most widespread way of getting the word out, investors caution against over-reliance. “The only way to ensure your property is fully marketed is by using an institutional broker from an established platform,” asserted Noah Hochman, senior managing director of capital markets for TruAmerica Multifamily. The company has enlisted multiple firms to help with as many as a dozen dispositions this year.
Online platforms, too, must address the perceived challenge to the traditional role of the advisor. Part of Ten-X’s marketing effort is getting out the message that the online platform is “a tool to make the process more efficient (rather) than to eliminate the brokers,” said Maureen Waters, chief marketing officer of the firm’s commercial real estate division.
Ten-X is launching a directory enabling brokers to list all their assets, even those not on the service. Brokers listing on Ten-X will be required to use the directory so they can populate it. Also in the works is an initiative that will match buyers and sellers through search functionality.
Websites, too, are getting productive makeovers. NAI Global Tampa partnered with Buildout, which creates web applications for marketing CRE listings. Tasks include automated document creation and delivery of due diligence and marketing materials to clients.
“If it’s two o’clock in the morning and one of my clients wants to review rent rolls, he can go right back to the document vault and get that information,” Burpee explained.
Drones are becoming part of the marketing toolkit, offering 360-degree views that helicopters and planes can’t match. “Our multifamily services coverage is nationwide, and we need to be able to tell the story successfully, not only on paper but often with an added value of a video,” said Cooke.
Colliers has used drones to market such assets as Arcadia Cove, a 432-unit garden-style apartment community in Phoenix, and 9 on Canal, a 498-unit Class A asset in downtown Indianapolis.
The cost of drone-generated visuals varies; at Cleveland-based Aerial Agents, for instance, prices range from $225 for photos and video clips to as much as $2,000 for a polished video. (Expect to pay more in coastal markets.)
JLL’s San Diego office uses drones to show prospective investors a proposed project’s elevation and show it in its surroundings, explained Darcy Miramontes, executive vice president & multifamily investment specialist.
The team has also used virtual reality and augmented reality tools to explore floor plans and lobby space. “You can put on the VR goggles and augment, juxtapose, on top of the blank space and see how it might look occupied and furnished,” she said. Her team has also used 3D modeling and animation to show investors what a project would look like in context of other proposed developments.
For out-of-town clients, the team hosts webinars that feature virtual property tours. “We have received some really good, positive feedback that led to more substantive and meaningful questions about the investment opportunity,” Miramontes reported.
Virtual reality may be the newest trend in tours, but the old-fashioned kind is alive and well. When the National Multifamily Housing Council held its annual meeting in San Diego this past January, the JLL team offered yacht cruises to Coronado Island to generate buzz about Broadstone Coronado on the Bay, a 549-unit community. The trips were a hit with potential investors, particularly those new to San Diego’s geography.
“It’s not very techy, but it was super effective,” Miramontes reported.
Originally appearing in the May 2017 issue of MHN.