An Investor-Driven Model for Marketing Downtown Real Estate W. Douglas Wendt President, Wendt Partners

An Investor-Driven Model for Marketing Downtown Real Estate Originally presented at the Pennsylvania Downtown Conference – June 2009

Presenter Background Former economic development executive Developed downtown KIZ strategic business plan Multiple awards for econ dev marketing excellence Firm specializes in commercial real estate and econ dev marketing strategy Learn more at wendtpartners.com

Former economic development executive

Developed downtown KIZ strategic business plan

Multiple awards for econ dev marketing excellence

Firm specializes in commercial real estate and econ dev marketing strategy

Learn more at wendtpartners.com

Our Framework Product Marketing Define the Product Carefully With Precision

Product Marketing

Define the Product

Carefully

With Precision

What Are We Selling? Beautiful space? Great community? Preservation? Exciting plans? Downtown vision?

Beautiful space?

Great community?

Preservation?

Exciting plans?

Downtown vision?

What We Must Be Selling: Business opportunity Low risk Profitability Strong investment Flexible plan High ROI

Business opportunity

Low risk

Profitability

Strong investment

Flexible plan

High ROI

You Want a Buyer To Be: Experienced Seasoned Skeptical Business- focused Properly capitalized Backed by partners Profit-driven

Experienced

Seasoned

Skeptical

Business- focused

Properly capitalized

Backed by partners

Profit-driven

Therefore the Product Is: Flexible for varied uses Low barriers to developer Not locked in preconceived expectations Driven by cash flow models

Flexible for varied uses

Low barriers to developer

Not locked in preconceived expectations

Driven by cash flow models

What Drives Cash Flow? Traffic Foot traffic Car traffic Tenant traffic Worker traffic Visitor traffic Parking traffic Resident traffic

Traffic

Foot traffic

Car traffic

Tenant traffic

Worker traffic

Visitor traffic

Parking traffic

Resident traffic

Do We Need Traffic? Not These: Gov’t Agencies Paper Business Online Sellers Hobby Business Charities Non-taxables Wrong Mix

Not These:

Gov’t Agencies

Paper Business

Online Sellers

Hobby Business

Charities

Non-taxables

Wrong Mix

Selling Traffic You Don’t Yet Have Business plan Market data Tenant mix plan Tourism strategy Strategic partners Pro forma Projections Drive shed review

Business plan

Market data

Tenant mix plan

Tourism strategy

Strategic partners

Pro forma

Projections

Drive shed review

Traffic-Building Priorities High volume: Daytime private-sector employers Regional homeowners Students Lower volume: New downtown residents Small businesses Tourism/events

High volume:

Daytime private-sector employers

Regional homeowners

Students

Lower volume:

New downtown residents

Small businesses

Tourism/events

Sell Your Suburbs These are your: Largest single traffic base Highest income Business owners Most stable population Future downtown workers

These are your:

Largest single traffic base

Highest income

Business owners

Most stable population

Future downtown workers

Tools to Move Property Team Members & Roles Planning & Zoning Zones & Districts Analyze Barriers Renderings Business Plan Projections Prospectus Partners Success Stories Listing & Marketing

Team Members & Roles

Planning & Zoning

Zones & Districts

Analyze Barriers

Renderings

Business Plan

Projections

Prospectus

Partners

Success Stories

Listing & Marketing

Team Members & Roles Team Members: You Municipal manager Econ dev agency Licensed real estate agent Real estate attorney Banker/financier Architect Contractor Apartment manager Successful retailer All as advisors… … to the current owners.

Team Members:

You

Municipal manager

Econ dev agency

Licensed real estate agent

Real estate attorney

Banker/financier

Architect

Contractor

Apartment manager

Successful retailer

All as advisors…

… to the current owners.

Planning & Zoning Don’t Overly Pre-Ordain Uses Some Issues: Signage Retail restrictions Condo vs. apartment Industrial Mixed use Loading docks Façade change Conditional uses Economy

Don’t Overly Pre-Ordain Uses

Some Issues:

Signage

Retail restrictions

Condo vs. apartment

Industrial

Mixed use

Loading docks

Façade change

Conditional uses

Economy

Economic Zones Great concept Hard to use Hard to find Benefits may be unpractical Target certain users Risk of looking weak Require government coordination Must show value to specific goals Promise help to obtain zone value

Great concept

Hard to use

Hard to find

Benefits may be unpractical

Target certain users

Risk of looking weak

Require government coordination

Must show value to specific goals

Promise help to obtain zone value

Economic Districts Business focus Showcase existing users Define industry targets Show higher depth of planning Nod to history, but not tied to past Proactive and market-driven Potential for future DID designation

Business focus

Showcase existing users

Define industry targets

Show higher depth of planning

Nod to history, but not tied to past

Proactive and market-driven

Potential for future DID designation

Analyze Barriers Site remediation Building condition Environmental and building systems Life safety Infrastructure Accessibility Parking Build out costs Adjacent uses Façade restoration Permits/approval Time cost of money Highway occupancy Market appraisals

Site remediation

Building condition

Environmental and building systems

Life safety

Infrastructure

Accessibility

Parking

Build out costs

Adjacent uses

Façade restoration

Permits/approval

Time cost of money

Highway occupancy

Market appraisals

The Role of Renderings In this case, do not focus on: Architecture Preservation Compliance Streetscape Plants

In this case, do not focus on:

Architecture

Preservation

Compliance

Streetscape

Plants

The Role of Renderings Instead show: Multiple uses High visibility Signage potentials Accessibility Different build-outs Accurate to zoning Overlay traffic figures and sources

Instead show:

Multiple uses

High visibility

Signage potentials

Accessibility

Different build-outs

Accurate to zoning

Overlay traffic figures and sources

Business Plan & Projections Develop conceptual pro formas Identify most profitable: potential uses tenant mixes Focus on traffic Use validated economic data Think like a buyer

Develop conceptual pro formas

Identify most profitable:

potential uses

tenant mixes

Focus on traffic

Use validated economic data

Think like a buyer

Build a Prospectus Business presentation Shows economic opportunities as a whole Demonstrates example investments and ROI Integrates with districts Comparison to other options (i.e. suburbs) Support with a PowerPoint tie-in

Business presentation

Shows economic opportunities as a whole

Demonstrates example investments and ROI

Integrates with districts

Comparison to other options (i.e. suburbs)

Support with a PowerPoint tie-in

Strategic Partners Existing high-employment businesses Higher education Meeting users Tourism agency Econ dev agency Architects and contractors Current investors Broker community

Existing high-employment businesses

Higher education

Meeting users

Tourism agency

Econ dev agency

Architects and contractors

Current investors

Broker community

Success Stories Showcase flexibility Focus on investor , not tenant Must truly validate success Show ROI

Showcase flexibility

Focus on investor , not tenant

Must truly validate success

Show ROI

Build a Brand that Sells Business Focus Investor-Oriented Ties to your: ED brand Retail brand Tourism brand

Business Focus

Investor-Oriented

Ties to your:

ED brand

Retail brand

Tourism brand

Listing & Marketing Craft business and investment focus Integrate with: EDC SiteSearch State agencies Utilities LoopNet, CoStar

Craft business and investment focus

Integrate with:

EDC

SiteSearch

State agencies

Utilities

LoopNet, CoStar

Other Considerations Incubators Retail Tech Higher education Corporations Conference and training centers Farm Markets, etc. Technology infrastructure Residential

Incubators

Retail

Tech

Higher education

Corporations

Conference and training centers

Farm Markets, etc.

Technology infrastructure

Residential