Jones Lang LaSalle
Building a More Expensive Broker Trap
Commercial building owners spend top dollar to entice time-strapped agents to view their space
Thomas Gaudio
NJBIZ Staff
2/20/2006
Biz Spotlight-Meetings and Conventions
From celebrity appearances to transforming an empty office space into a one-night jazz club complete with a four-piece band and full-service bar, developers are holding extravagant open houses to generate buzz and get the attention of busy agents to their unleased, high-end commercial properties.
"The open house is an extension of the overall marketing program of commercial marketing real estate," says Jeffrey Shotz, executive managing officer of GVA Williams New Jersey, the Parsippany division of the real-estate services company based in New York City. "But they’ve really taken a life unto themselves."
Last July GVA paid New York Yankees first baseman Tino Martinez $35,000 to appear at an open house displaying 150,000 sq. ft. of vacant space in the Woodbridge Plaza corporate complex in Woodbridge. Shotz says more than 300 brokers showed up—many with their families in tow—to get their pictures taken with the popular major leaguer. The company set up hot dog and ice cream stands, and attendees received miniature wooden bats and bags of peanuts in addition to their photo with Martinez .
GVA had a marketing budget of some $106,000 to garner attention for the space, which is owned by Newport Beach, Calif-based KBS Realty Advisors. He says half of the space was leased, for around $100 to $150 per square foot, within six months of the open house.
"You need to be a bit more elaborate, a bit more creative due to the amount of space available and the number of brokers. There are more and more open houses but there have been around 1,200 to 1,500 brokers for the last 10 years or so in the northern and central Jersey areas. So there needs to be a clear incentive for the broker community to show up," says Shotz.
Sometimes the space itself becomes the star. The Saddlebrook division of CB Richard Ellis, the El Segundo, Calif-based real-estate services company, held an open house at a site in the Meadowlands in March of 2004. When the elevator opened on the 10th floor of the plain office building, brokers were greeted with velvet columns, intimate lighting and the funky sounds of a jazz quartet, a temporary makeover to by a commercial-space designer.
"If we’re sinking a lot of money into a building then we want the open house to reflect that," says Nick Spadavecchia, director of marketing at CB Richard Ellis in New Jersey.
Spadavecchia says the company spent "up in the 30s" to market the 422,470-sq.-ft. property on behalf of CB Richard Ellis Strategic Partners, its Los Angeles-based parent. Since the party, CB Richard Ellis has leased 150,000 sq. ft. of the building for more than $30 a square foot.
High-end events, such as that at the Meadowlands, can cost between $13,000 and $35,000, he says, and typically involve an assortment of food and beverages, a tent if they’re held outdoors and pricey giveaways.
CB Richard has raffled off digital music players and flat-screen televisions to brokers at past events. In 2000 a one fortunate real estate agent went home with a three-night vacation package—including hotel and airfare for two people—to the Caribbean after an event designed to sell a 400,000-sq.-ft. office building in Somerset. Spadavecchia says 100 to 150 brokers will be in the drawing for anywhere from three to six prizes at a major open house.
Last November, GVA used four Sirius satellite radios, each with a one-year subscription to the digital service, to spur brokers to attend an open house promoting 50,000 sq. ft. out of an 182,000-sq.-ft. office building in Berkeley Heights.
Not all broker shindigs are lavish carnivals of gourmet cuisine and ritzy presents. "Some are just a bagel breakfast" and a tour of the space, says Shotz, noting that four to five events are held a week in central and northern Jersey.
"An open house is a very important component in a campaign. It’s one of the first things that takes place," says Shotz.
Bob Martie, senior vice president of Bedminster-based real estate company Advance Realty Group, agrees they’re a great tool for landlords to show off their inventory but doesn’t see the need for excess if you have a great product.
"Our property isn’t marketed that way," says Martie. "If you were a competitive broker and didn’t come to an open house, how could you show it to a buyer?"
Advance offers basic fare and passes out relatively inexpensive mementos like hard hats at open houses that cost between $2,000 and $30,000. The more developers spend on expensive souvenirs, says Martie, the more they’ll have to raise rents.
"We don’t feel those things are fair to the tenant. Intelligent and sophisticated brokers won’t accept gifts," says Martie.
Shotz says he’s never seen a broker turn down a handout: "Real estate professionals are on commission, not getting paid by the hour. There’s not enough time to visit all of these things. You have to give them a good reason to show up."
E-mail to tgaudio@njbiz.com
Building a More Expensive Broker Trap
Commercial building owners spend top dollar to entice time-strapped agents to view their space
Thomas Gaudio
NJBIZ Staff
2/20/2006
Biz Spotlight-Meetings and Conventions
From celebrity appearances to transforming an empty office space into a one-night jazz club complete with a four-piece band and full-service bar, developers are holding extravagant open houses to generate buzz and get the attention of busy agents to their unleased, high-end commercial properties.
"The open house is an extension of the overall marketing program of commercial marketing real estate," says Jeffrey Shotz, executive managing officer of GVA Williams New Jersey, the Parsippany division of the real-estate services company based in New York City. "But they’ve really taken a life unto themselves."
Last July GVA paid New York Yankees first baseman Tino Martinez $35,000 to appear at an open house displaying 150,000 sq. ft. of vacant space in the Woodbridge Plaza corporate complex in Woodbridge. Shotz says more than 300 brokers showed up—many with their families in tow—to get their pictures taken with the popular major leaguer. The company set up hot dog and ice cream stands, and attendees received miniature wooden bats and bags of peanuts in addition to their photo with Martinez .
GVA had a marketing budget of some $106,000 to garner attention for the space, which is owned by Newport Beach, Calif-based KBS Realty Advisors. He says half of the space was leased, for around $100 to $150 per square foot, within six months of the open house.
"You need to be a bit more elaborate, a bit more creative due to the amount of space available and the number of brokers. There are more and more open houses but there have been around 1,200 to 1,500 brokers for the last 10 years or so in the northern and central Jersey areas. So there needs to be a clear incentive for the broker community to show up," says Shotz.
Sometimes the space itself becomes the star. The Saddlebrook division of CB Richard Ellis, the El Segundo, Calif-based real-estate services company, held an open house at a site in the Meadowlands in March of 2004. When the elevator opened on the 10th floor of the plain office building, brokers were greeted with velvet columns, intimate lighting and the funky sounds of a jazz quartet, a temporary makeover to by a commercial-space designer.
"If we’re sinking a lot of money into a building then we want the open house to reflect that," says Nick Spadavecchia, director of marketing at CB Richard Ellis in New Jersey.
Spadavecchia says the company spent "up in the 30s" to market the 422,470-sq.-ft. property on behalf of CB Richard Ellis Strategic Partners, its Los Angeles-based parent. Since the party, CB Richard Ellis has leased 150,000 sq. ft. of the building for more than $30 a square foot.
High-end events, such as that at the Meadowlands, can cost between $13,000 and $35,000, he says, and typically involve an assortment of food and beverages, a tent if they’re held outdoors and pricey giveaways.
CB Richard has raffled off digital music players and flat-screen televisions to brokers at past events. In 2000 a one fortunate real estate agent went home with a three-night vacation package—including hotel and airfare for two people—to the Caribbean after an event designed to sell a 400,000-sq.-ft. office building in Somerset. Spadavecchia says 100 to 150 brokers will be in the drawing for anywhere from three to six prizes at a major open house.
Last November, GVA used four Sirius satellite radios, each with a one-year subscription to the digital service, to spur brokers to attend an open house promoting 50,000 sq. ft. out of an 182,000-sq.-ft. office building in Berkeley Heights.
Not all broker shindigs are lavish carnivals of gourmet cuisine and ritzy presents. "Some are just a bagel breakfast" and a tour of the space, says Shotz, noting that four to five events are held a week in central and northern Jersey.
"An open house is a very important component in a campaign. It’s one of the first things that takes place," says Shotz.
Bob Martie, senior vice president of Bedminster-based real estate company Advance Realty Group, agrees they’re a great tool for landlords to show off their inventory but doesn’t see the need for excess if you have a great product.
"Our property isn’t marketed that way," says Martie. "If you were a competitive broker and didn’t come to an open house, how could you show it to a buyer?"
Advance offers basic fare and passes out relatively inexpensive mementos like hard hats at open houses that cost between $2,000 and $30,000. The more developers spend on expensive souvenirs, says Martie, the more they’ll have to raise rents.
"We don’t feel those things are fair to the tenant. Intelligent and sophisticated brokers won’t accept gifts," says Martie.
Shotz says he’s never seen a broker turn down a handout: "Real estate professionals are on commission, not getting paid by the hour. There’s not enough time to visit all of these things. You have to give them a good reason to show up."
E-mail to tgaudio@njbiz.com
posted by Jones Lang LaSalle NJ News Blog at 4:17 PM
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