With vacancy rates soaring and property values plummeting, costs have gone up while revenue has gone down. That has made for a tumultuous year in the commercial real estate market and many believe it’s not even close to being over.
A recent report on MSNBC shows just how gloomy the forecast is, with vacancy rates approaching 20% in some markets. Many experts are saying that all the industry can do, is brace for the anticipated 2011 peak of commercial real estate foreclosures. Some estimates show a jaw dropping 5.3%.
What we don’t hear much about, is how to mitigate the impact of the problems in the macro economy and put together a strategy on how to get through the next few years thus emerging from the storm stronger than before. What you can do at the building level is really quite simple; get people in your building. Of course this is easier said than done. In part I of this ‘business problem’ we will give you a test, in part II we will give you a road map, and part III we will help you get started with your very own demo, so you can see how easy it can be!
First lets think about some of the individuals that make up your building:
- Tenant Vendors (ie. Starbucks)
- Property Managers
- Building Services Manager (parking, meeting space)
All of these players have one thing in common. They all want people in the building! Yet rarely do all of these people come together to make that happen.
Getting people into your building is all about driving traffic and you have multiple avenues to illustrate this:
- Your tenant’s visitors
- Consumers (purchasing everything from coffee to newspapers)
- Parking patrons
- Meeting and conference room patrons
- Leasing prospects
Unfortunately, as the economy slows down, so does all of this traffic. So, the question remains, how do you drive people to your building when traffic is down 20% or more? You siphon it off from the buildings that surround you.
The key to getting people into your building, be it to purchase coffee or sign a ten year lease, is being the market differentiator. In the real estate industry this equates to location, location, location. So where are you located on the world’s number one traffic driving tool – the web?
Here is a test:
Google the names of 5 buildings in your city and compare what you find to your building. If you happen to be in a world famous building, like the Empire State Building, you probably will find a decent website and a plethora of articles about the building. If your building is noticeable in the skyline, you probably will find a Wikipedia entry and maybe a few user driven discussions about your building. Finally, if you aren’t a part of the skyline than you probably will have a hard time finding anything about your building at all – at least anything good.
Since only buildings that are widely recognized, like the Empire State Building and Sears Tower, have marketing programs – it is difficult to show how this type of marketing has been implemented – at least by building owners, brokers, or operators.
So let’s look at one example that asks “are you in control of your message?” and see what happens if we search for one of the nations largest commercial office buildings.
What we found:
Result #1: A Wikipedia article with an overview of the building, including an entry on how the building was a likely target of Al Qaeda’s initial plot to attack buildings on the west coast, as well as subsequent disrupted plots after 9-11.
Result #2: A yelp.com review of the parking garage where the submitter states (this review is paraphrased):
“The [Building] probably has one of the strangest designs in [the city]. This makes navigating the underground parking lot very hard. There’s all these little spaces and oddly shaped corners where tiny parking spaces are fashioned. This means a lot of scratches for me!! Boo. It’s a real struggle to find a reasonable sized spot that doesn’t require maneuver around beams and a dingo to get into. Thumbs down!
Result #3: A website landing page for one of the building’s restaurant and event space tenants.
Conclusion to our test:
From our search on Google we learned that the building was a target of terrorists, has bad parking, and a restaurant with meeting rooms on the top floor. To potential “clients”, this is not going to be the most appealing marketing message. In fact, it would be better if there were no web presence whatsoever versus the overwhelmingly negative results found through Google.
Not controlling the message has left this building’s reputation in the hands of just about anybody except to those that it means the most; those invested in the building. By not having a website platform to deliver this building’s message, anonymous users are relating this building’s brand and identity – by association – to the brand and identity of the owners, operators, brokers, tenants, etc.
What makes this lack of a controlled message such an unnecessary shame, is that this building is one of the premier buildings in the US. It dominates a citys skyline, it’s a big part of the business community, and hosts a major annual community fundraising event. Whether or not you like the parking (and I’ve been there and it is just fine), it does have parking on site as well as a host of amenities such as coffee shops, food services, a workout facility, and an indoor mini-mall – but you’d never know it.
On Monday’s Blog we will cover Business Problem #3.2: Getting People in Your Building – Recapturing Your Voice & When Every Player Works Together, Every Player Wins.