Extreme Home Marketing

It takes more than Sub-Zero fridges and granite countertops to sell real estate in today's cautious environment

by Maya Roney

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When the selling gets tough, the tough get creative. Faced with a softening market and higher interest rates, today many real estate developers and agents must work harder to sell properties that would have been snapped up last year by frenzied buyers looking to lock in steadily rising prices. Now, with price appreciation slowing, properties that would have once been easy to sell take more time and require slicker marketing (see BusinessWeek.com, 2/19/07, "Out of the Basement for Housing").

That's why Michael Shvo, president of his eponymous real estate marketing company, SHVO Marketing, in New York, claims he is not selling real estate but lifestyle. "The right amenities exist, but they have to exist within the brand and the building," he says. "The customer is all about the lifestyle. When you buy a mediocre product, that's just a vanilla box with nothing in it."

Shvo is one of a new breed of real estate professionals trying to redefine the way homes are marketed in today's more cautious environment. Brokerages are strengthening their marketing arms, emphasizing heavy research and product development. Developers are seeking out marketing gurus who can help them create "identities" for their buildings, create magazine-like brochures, and bait top Realtors with extravagant parties and gifts. Sales offices have video presentations, art exhibitions, and sales reps who wouldn't look out of place on a fashion runway.

Celebrity Branding

The top producer at New York real estate firm Douglas Elliman in 2003, Shvo struck out on his own the following year. He believes that what people really crave is to buy into an identity—the bourgeois bohemian, the Armani-wearing sophisticate, or the worldly art collector. "You need to give people a reason to buy today," he says. "Until now, it didn't really matter what you built because the market was so strong. Three years ago, if I took a dog and tied it to a pole, it could sell a condo."

Gone are the days of scrappy newspaper ads and lifeless floor plans. Brochures are more like magazines, with fashion spreads and interviews. Manhattan's Sunshine Group has also developed a magazine for one of its properties called O2, which will cover issues related to the building and green living in general. Internet video home tours have also become popular, and online advertising is making up a growing percentage of Realtors' budgets. Media research firm Borrell Associates has said online real estate advertising will swell from a $2 billion category, or a 17.7% share of total advertising in 2006, to $3 billion, or a 32.1% share by 2010, surpassing the longtime leader, newspapers.

One way to draw attention to a property is to brand it with a celebrity name. Donald Trump has been doing this for years, but now other bold-faced names not traditionally associated with real estate are tacking their names onto buildings. One of the prime examples—and a Shvo client—is the Jade, which takes its name from project designer Jade Jagger, daughter of Rolling Stones singer Mick. The Jade targets the young, hip, and prosperous in New York's funky Chelsea neighborhood. In the building's glossy and colorful brochure, Jagger calls the Jade a "fusion" of her love for "the rural beauty of Ibiza, the glamour of London, and the nonstop energy of New York." The brokers assigned to the Jade were cast and groomed to be as sexy and dynamic as Jade herself—right down to their outfits. "I'm a perfectionist; the brand has to be flawless and continuous," Shvo says.

From Art Curators to Brokers

Other famous names that are lending their names to new real estate and hotel projects are designer Giorgio Armani and the Bulgari family.

And in today's world of Apple (AAPL) iPod listeners and YouTube addicts, customers have more design sense and a stronger desire for a multi-sensory, technology-heavy sales experience. "Consumers want to look, touch, see, and feel what they would be purchasing," says Jasmine Mir, senior vice-president of marketing at the Corcoran Sunshine Marketing Group. Like Shvo, the Sunshine Group develops individual building "products" from the bottom up, focusing on the targeted demographic and its lifestyle trends. The group's Riverhouse project, a 31-story luxury condominium in Battery Park City built with renewable materials, bills itself as "the East Coast's greenest condominium."

Around the corner from the Jade in New York is Shvo's newest project, a gutted and rebuilt landmark beaux arts building at 650 Sixth Ave. It features all-white, minimalist interiors inspired by the art galleries in nearby West Chelsea. The sales office, which opens this month, will also be an art gallery, and many of the brokers for the project are curators with longtime gallery experience. An audiovisual presentation on the history of the neighborhood will grace one wall.