Chicago, IL (PRWEB) July 29, 2011
At a recent breakfast hosted by C.R.E.P., Chicago Real Estate Professionals, Christine Lutz, VP with Chicago-based Garrison Partners Consulting, told the group that there is more to consider than just the price of the asset when evaluating a potential purchase. While location is always important, mortgage loan availability, floorplan design, and consumer appeal are key elements to consider during the examination process. “Without end loans for consumers, nothing else matters”, says Lutz of Garrison Partners. If a potential development does not meet FHA or FNMA guidelines for mortgages, the bank or developer should consider underwriting and holding the loans with plans to sell them when the property meets the required criteria.
Lutz went on to say that “they gotta have good bones”. Livable floorplans with finishes and design elements that attract the attention of the target market are essential in a successful repositioning effort. An example of how to do it right is Van Buren Lofts in Chicago’s West Loop.
Van Buren Lofts, an eight-story brick and concrete building, was recently acquired by Hinsdale-based FoxFord City. http://www.vanburenlofts.com Garrison Partners, a full service marketing and sales firm that specializes in the re-positioning of distressed properties, orchestrated the re-introduction of the development back into the condominium market place. A professional interior merchandiser was engaged to give the space a new, up-to-date appeal. Sleek Euro-style cabinetry includes textured finishes in tones of smoke gray and rich tobacco as well as tiger-stripe wood patterns. According to area merchandisers, quartz is the new granite when choosing counter tops. Flooring has been modernized with four-inch site-installed oak; a new twist on an old favorite. Kitchens are equipped with upscale Bosch appliances including counter-depth refrigerator, five-burner gas cooktop and range, and an ultra quiet five-cycle dishwasher.
Lutz cautions would-be investors to arrange for a sufficient marketing budget to re-launch the property and to sustain the sales efforts. During the height of the market, modest marketing budgets of 1.5-2% would get the job done. However, in today’s market 3%+ of revenue is a more realistic target. “While most buyers begin their search online, we still see the need to include print media in our budgets”, says Lutz. Many prospective buyers are conducting their own searches before visiting a property and are using a variety of sources and media. A remarkable number are using real estate agents, not so much for their search capabilities but for their expert counsel during the buying process.
Many investors have concerns about the competition presented by short sales and foreclosures in a development being considered for acquisition. According to Lutz, this should not scare them away. Today’s consumer is accustomed to these situations and many prefer to buy at retail for a number of reasons. The red tape and lengthy processing time involved is unrealistic for many buyers, and the condition of the property is also a concern.
Setting the new retail pricing for a re-positioned property is a mix of art and science and is based on the myriad factors that make the development unique. “Last year, the discount from 2008 prices was about 20-25%. This year, we are seeing about 30%”, says Lutz. Marking the re-positioned product with the right competitive pricing will spur a number of sales at the re-launch of the marketing effort and set the pace for future sales.
Garrison Partners Consulting is a full service sales and marketing firm providing strategic plans and sales management services for more than $5 billion in real estate product in more than 20 states. Based in Chicago, with offices in Wisconsin, Texas, Nebraska and Virginia.
For more information on Garrison Partners go to http://www.garrisonpartners.com, 312-750-1610 ext. 226 or contact Christine Lutz at 312.504.9401