Sell High: What is the right Marketing Process?

Welcome to SellHigh, the ultimate podcast series for landlords looking to maximize their property's potential and achieve top dollar sales.

Hi, I'm James Nelson, your host, and I'm here to help you unlock your property's full potential.

And I'm Anlis Callez, your moderator, guiding you through each insightful episode. Get expert insights on market timing, broker selection, property valuation, marketing, negotiation and closing all in one podcast. Tune in to the Sell High series and unlock the secrets to top dollar sales.

Welcome everyone to the fourth episode of Sell High Edition. This is what is the right marketing process? I'm James Nelson, principal and head of Tri State Investment Sales, and with us today is Analyz Callez, who is founder, Brand Dora and excited to continue this discussion with you.

Hi, James. I'm super excited to be here, especially as we're talking about marketing today. And I've been a marketer in real estate for almost 20 years now, so it's really a subject dear to my heart. I'm super excited to dive in. In the last episode of Sell High series, we discussed how to value a property and our audience learned the importance of getting a realistic valuation and working with a credible broker with a real understanding of their comparable sales. And tune to the market trends. This week we're diving into a crucial aspect of the property sales, the right marketing process. So, James, could you share a story with our audience? We know a lot, our audience loves stories about a seller who preferred going off market first and then decided, you know, saw the light and decided to go do a broader marketing campaign. And the impact, sure.

This involved a very prime corner property that looked out over City hall. And it was a tremendous development opportunity for luxury condos. And I'm not sure if it was that the seller hadn't seen the light, but, you know, oftentimes in commercial, and this is probably where it's a little different than residential. If you own prime property, it's probably not unusual that you're getting called, you know, maybe it's not every week. Sometimes it could be from brokers and from buyers alike. And so it's not completely unheard of that an owner would say, why would I want to hire a broker if I'm getting all of this interest? But what happened was this seller who kept getting these supposed offers, he found that once he went down the road with them, a lot of those buyers wouldn't actually step up and perform or they would renegotiate. And he was having a really difficult challenge bringing things to a head. Right. And so what we advise this seller is, look, the idea of bringing a property to market, And I said, whether it's with us or with another brokerage firm, but having a quarterback, someone who is going to help bring this to the marketplace and run a process, right, to really create that leverage in a controlled timeframe, to bring it together, to know that you're ultimately getting the highest price is the best way to make sure that you're selling your property at the best price. And I think once we were able to explain, and unfortunately, in his case, it took months and months of having all these buyers telling him what he wanted to hear and then being disappointed time and time again that he said, look, I'm ready to just kind of turn things over and let you all be the quarterback. And I think what we also explained to him is, look, let's look at the numbers. Even if you have, let's say, five brokers who've called you about your property, and even if each of those brokers bring, let's say, five buyers, okay, that's only a universe of 25 buyers who might have interest in your property. When you're selling real estate in a highly competitive market like New York, there's not just 25 buyers out there. There's could be 25,000. I mean, theoretically, there could be 250,000. And so what I always ask sellers is, what is the downside? Why wouldn't you want to go out to the broadest marketplace to make sure that you've. And sorry to throw in all the cliches, but, you know, leave no stone unturned, because as we remember from a prior discussion that we had, remember that first investment that I made that I talk about in my book, the insider's edge to real estate investing, was that owner who said, oh, I don't need a broker. I'm going to save a commission. Ends up signing a contract with Matt Blessow, and within two weeks, found, just by my making a couple phone calls, that that seller had left at least a half a million dollars on the table because they didn't go out and broadly market the property. So. But, yeah, ultimately that sale closed for over $50 million. This was actually a good friend of mine, Will Suarez, who I've now worked together with for maybe not 20 years, but at least 15 years. This was his first origination, his first piece of business. So he's. Imagine this being on the job, you know, a couple months, and he says, james, I think I've got this incredible opportunity downtown. We teamed up on it, we went after it. And so his first sale was over $50 million.

Amazing story. Amazing story. I love it. And James, you've been in the business for 25 years, right? 25 or 27.

Coming up on 25.

Okay, 25. So you've been helping owners sell their buildings for 25 years. So. And sold hundreds of property. According to you, what are the key elements of an effective marketing strategy for selling a property?

Got it. So there's really three major parts to marketing. Right. So the first part is, and this is after we've. Remember you've listened to the previous episodes. Now you understand the importance of valuing the property, understanding what it's worth, because that certainly plays into a good marketing process. If you haven't gone through to make sure that you have the right valuation and you're bringing a property at the right price to the market, you can have the best marketing process in the world and it's not going to work. So again, I, that's kind of the precursor to this. We've already talked about it, so we're assuming that that's happened. You're bringing this at a price which is aspirational, but it's not completely unrealistic. But assuming you have that, the first part is really to maximize the exposure. So how do we get this property to the widest audience of qualified buyers? That's the first part. The second part is to make sure that we have looked at the benefits of the property. And I think we also talked a little bit about this in our prior episodes about making sure and doing the right diligence. So we talk about the good, the bad, the ugly, where yes, of course as the broker you want to put the property in its best light, but you also want to be realistic and you want to address that there's any issues and bring those up front so that that would be. I'd still put that in the marketing, the property benefits section. And the last piece of it is really doing this in a controlled timeframe. You, you want to make sure that you create leverage, you create competition, buyers bidding against each other. So you're not just out there forever and end up in a one on one negotiation where you know, you have that same issue that that was dealing with that we just spoke about.

And is there any situation and any advantage at all for owners to go off market?

So this might seem self serving, but I don't think there's ever a good reason for an owner to sell off market. Okay. You know, the idea of working with a broker who represents you I'm in the business full time of selling properties. And again, you were kind enough to mention some of those stats where over the course of my career, over 500 sales, you know, at least today, our team does in the neighborhood of 50 transactions a year. So if we're selling one property a week, you would think, okay, we have a good understanding of the marketplace. We know who's active, we understand values, we understand how to create a bidding process. If you're an owner who owns one property or 10 properties or 100 properties, there's very few owners who I'd say are out there selling 10 properties a year on their own. So the point being, Elise, is that owners are good at, you know, hopefully their job as the investor is finding the opportunity, repositioning the property. They've done their work to create the value. Now you bring it to that specialist whose job is to maximize the sales process. Right. And again, the key point is finding someone who is working in your corner. Right. And I think the myth with off market is, okay, well, there's no commission. Well, you know, yes. Is there a situation where a seller finds a buyer directly and does. There's no brokerage involved? I think that's rare. But if it happens again, the concern there is, how do you know that you've reached the widest audience of buyers? Right. How do you know who's active if you're not out selling properties every week? Right. But off market oftentimes doesn't mean no broker. Oftentimes off market just means they didn't exclusively list with someone. And so instead, they're just waiting for brokers to show up and bring buyers. Well, Annalise, if the broker. If a broker calls you representing a buyer, who do you think they represent? Do you think their job is to get the best deal for the seller, or do you think they're working for the buyer?

For the buyer?

Yes. So. So the key is that this goes back to why would you do an off market transaction? You know, if hopefully people will realize the benefits of running that marketing process. Right. And working with a broker who's working in your corner. And if you do off market and you're going to be paying a broker a commission or not, why not have them working in your corner? And one last footnote on this. You might say, well, James, the broker said he's getting paid by the buyer, so I'm not paying the commission. Well, at the end of the day, you don't think the buyer's doing the math to figure out what they're netting so that that buyer is then just, you know, who knows what they're paying their broker that's coming off your sales price, whether you think you're paying it or not. So I do want to talk a little bit and maybe we could have a follow up discussion on does all marketing, does the marketing process always have to mean going broad to the whole world? I know you wanted to get into that, that later, but let's, let's put a pin in that for now.

And so my next question is, are there any risks at all associated with the broad marketing campaign?

Yeah, so that's definitely along those lines. And look, there are certain situations where you would not want to go broad to the marketplace. And sometimes if there is an issue, maybe with a tenant, maybe whether you're an active negotiations and you don't want the word to get out there, right. And so. Or sometimes maybe there's development potential, but you don't want to let, whether it's the community. No. Or whatever it is, you put the word out here, this is a great development opportunity. All of a sudden everybody comes in and tries to shut it down. You know, there might be some examples where you don't want to go broad. You know, that being said, I tell sellers, look, when you go out to market, right, whether we call one person or we send it out to tens of thousands of people, there's a risk that people are going to find out that your property's for sale. And by the way, after you close, everybody's going to know. So why wouldn't you want to get the benefit of people wanting to know so. But there are sometimes situations where if something is, you know, sensitive, whether you're in active negotiations, maybe with a tenant, you want to finish that lease before you go out and market it. If the tenant finds out you're selling the property, could they be spooked and then they don't sign the lease like so? Yes, there are some examples where a broker might say, look, well, we don't have to put this on all the multiple listing sites. We don't have to blast it out to tens of thousands of people here we can do direct buyer outreach. But again, those are only in very rare instances.

And typically you're working for Eva Zion Young. How do you put a property in its best light?

So I think a lot of it is doing the buyer's homework for them. So buyers, investors are busy, right? So you need to do the work to show the upside potential of the property. And so that really means figuring out and we talk about it in the book about a property's highest and best use. So if there is air rights potential, if they're. If right now, you know, the ground floor could be converted from residential to retail, maybe retail is worth a lot more money. You know, it's the broker's job to tell buyers about this potential. Right? And we know whether you call that selling the dream, right, as far as the potential of the property, a good broker is going to tell you what the possibilities exist with the property. So, but I think that's also doing all the diligence, making sure that you have a data room, that you have all the information, all the leases, everything kind of teed up on a silver platter. So the buyer doesn't have to go and research all this. It just streamlines the process. But as I mentioned before, it also means that if there's issues with the property, whether or not in New York we deal a lot with rent regulation, is the proper, is the apartment actually fair market, meaning you can charge whatever you want, or is there a chance that it could be rent regulated and needs to be registered at a lower rent? If we think there might be an issue, not that we're going to be public about that, putting that out on the website. Oh, issues. Question whether or not. But we're going to certainly have that conversation with the buyer as they get more serious to say, look, before you submit an offer, you need to know about this. You know, here's another one that I think is important to mention. Like a tenant is in arrears. So if a retail tenant or an office tenant, whatever it is, if they're behind rent, I'm going to tell you that before you end up finalizing an offer. Because guess what? You're going to find out about it anyways. When you go and get a contract, you're going to do your diligence. You're going to say, let me see the leases and let me get an arrears report. You can say, well, James, I bought this thinking that this was a tenant in good standing and there's six months in arrears. So now you're thinking, well, James, what else have you. Are you hiding from me? Right? Whereas if I just tell you up front, hey, Ellis, I think this is a great opportunity. But just so you know, the retail tenants behind in rent, so you're going to either have to cut a deal with them or maybe you vacate and get them someone else. And it's like, okay, that's part of the deal, right? So you might say, well, James, that's not really putting a property in its best light, but I think it's putting the property in its accurate light.

Yeah, that's really interesting. And you know, the commercial real estate industry is, you know, a bit of a dinosaur, you know, not a bit traditional. What would you say had like now with marketing, what do you think is the importance of digital marketing now?

It's a great question and I think it's a lost opportunity. I think a lot of the commercial brokers out there are way far behind what the residential brokers have been doing, which is, you know, embracing social media, embracing video, I will tell you that. And you probably get hundreds of emails as well every day. I think these email blasts have really lost their effectiveness. So what I found is that when I post a video of myself in front of a property saying, hey, we have something for sale and it gives you a quick visual of it, you know, two, three minutes max, we get a lot better reception from that than maybe an E Blast. So, you know, again, but it's work, right? You've got to have good content, you've got a right team, you have to spend time on it. You can't just expect that you put it out into the social media universe, so to speak, and it's going to go viral. I mean, you really have to build it over time. But, but, and again, social media is only part of digital marketing. I mean, we're getting very strategic now about how we reach out to potential buyers. So whether it is targeted advertising. And I, I realize it, it's not when you give someone a list of potential buyers that you want to get in front of, it's not an exact match. Obviously there's privacy rules around it, but usually we can get a pretty good sense of this, is the profile, the type of investor, what we're looking for, and, and make sure that if they're online searching for something that we're showing up in the right searches.

So it's interesting. So you seem to see that really social media and more video content has been what you've been using more often for gaining exposure for your listings. Do you tailor your marketing approach depending on the asset type?

It's a good question. And it is as far as the specific outreach and the lists, who we're going to. Yes, multifamily investors are very different from retail investors, different from office development. But I think you know that the process, right, of posting on multiple listing services, which is not just our website, but Costar, LoopNet, Crexi, you know, that works for any listing, right? Social media, same thing. I think you can't just, you know, if you're posting something clearly, you're not just posting it for those developers to see or multifamily investors to see. But I think as you, as you are looking to, to focus in and if it is part of the targeting advertising that, yes, you, you want to make sure and go after those specific types of investors, I would say for retail and office, that's where we really do a lot of outreach with brokers as well. So, and we're doing this right now with a block front in soho, very high profile opportunity where we think this is an incredible branding opportunity for a tenant. So we are reaching out to retail brokers as well as office leasing brokers to say, look, typically you're working with tenants to lease space. This is an opportunity to own. And so there we're not just focused on investors, but we're also focused on retail leasing brokers as well as office leasing brokers who might have tenants who want to purchase.

It's a great marketing strategy. And what are some common mistakes, marketing mistakes that landlords should avoid when selling?

Well, I think that we've talked about a lot of ways to market a property to get the best exposure. And sometimes, unfortunately, I have to say that owners might not be aware of what's happening or what's not happening. I mean, just the whole idea, and I just said of reaching out to brokers, I mean, you ask most sales brokers when they're trying to get your business. Do you work with brokers? Oh, yeah, sure. I cooperate with brokers. Okay, well, okay, do you, can you show me examples of sales that you've closed where another broker represented the buyer? Can you give me examples? Right. Because again, some brokers will, will sometimes do what, what they need to, to get hired. And then you find out, well, hey, you know, I gave you this listing, but none of the brokers even know about it. The other thing is, and this is really easy to go and see if the broker posts on multiple listing services. So, you know, I don't see any listings that you have on Costar, LoopNet or Crexi. Why not? Right? And either they don't have listings or they're not willing to put those listings out. And a lot of these brokers might say, well, if they're pressed on, they say, well, we don't really need to post it there. Right? We know who the buyers are. Well, why wouldn't you post it? Why wouldn't you put it on multiple listing services, right? Because they are. Yes, you are opening up to the brokerage community. And you know, some brokers may say well I don't, I don't want to deal with brokers. I don't want to have to worry about splitting fees and I know who the buyers are. But then I don't think they're really doing the right job. So I think it's really vetting that broker presentation isn't just about the opinion of value, but it's also what's your marketing strategy. And then really asking them for examples to and doing a little research to see whether or not they're actually taking advantage of all these tools that exist that really help in that maximizing the exposure which ultimately why are we doing all these things to maximize price?

And the following question is I think important also to manage clients expectation because I'm sure you're coming across maybe landlords who can get impatient and are asking you like what's the deadline? What's the progress? So how long should a typical marketing campaign run before reassessing the strategy?

Right. So I'm going to go back first of all to pricing because this is really important because if you get the right price, the right valuation and we actually found that we went back to our last hundred sales and we looked at what was our reconciled value. In other words, what do we tell the owner the property was worth and ultimately where did it sell? The average was that we were within 5%. I think that's pretty good. So if I tell and by the way, that also works upfront when we meet and I tell you your property's worth $10 million and you say well James, that's great but two other brokers told me my property is worth 12 or $13 million. And I would say okay, well first of all how do they derive that value? What were the comparable sales? But like what's their track record? I'll show you our track record. We get within 5% of what we say. So there's that old, you know, buying the listing right, where the seller, you know, the broker tells the seller what they want to hear. And I'm getting back to your question about the timing. That has a very damaging effect if you are you overprice a listing because then you don't get engagement and then the property sits out there and then investors start saying well what's wrong with this? Thing's been sitting around forever, right? So if you price a property right, you should be able to bringing it to Market to close, that takes place within six months. Okay. So it's a very defined time frame. That first week or two is to get all the materials ready together to, to launch, get it out in the marketplace. Then you need another six to eight weeks of active marketing, meaning we're out there making calls, showing the property, collecting offers, but by the end of eight weeks, so like we're really talking about within two months. The first two months you should have, depending on what kind of property it is, you should have multiple offers on the table. You should be able to bring things to a head, call for offers, and then, and then after that we are sending a contract or contracts out and closing within a 60 to 90 day period. So start to finish, we're talking about a six month process. Right. So, but, but if I overprice it, it could drag out six months without that competitive bidding, and then you're really doing the property long term damage.

And if you were a landlord looking to pick a broker with strong marketing horsepower, how would you determine that? What would you look at?

Well, I think track record is really the most important thing to start with. Okay. So you want to make sure that the broker is active, having done what they say they can do. And so you want to see, you know, what are your recent sales. But I think, Annalise, it's also helpful to ask for references. So you want to know, and we might have talked about this before, but not just, you know, talking to your recent sellers, but look at the list of what they've sold and say, well, I'd like to speak to the owner here and see what they have to say. So I think that's important. I also we put together, whether you call them case studies, success stories, whatever it is. But what was, you know, tell us about your sales and why, what, what, what were you able to do for that property and ultimately generate the highest sales price? How did you do it and what was the ultimate story behind it? And so I think for us, and we're actually doing a study right now, I'll let everyone know on a future episode. I'm curious, out of our last hundred sales, how many did we identify were first time buyers in this market? Because I think that's really interesting. If, and I think it's going to be at least 15, maybe it's 20%, we'll see. But if we were actually bringing new buyers to the market that's doing something that other brokers can't do, as opposed to just going to everybody who we already know who's here. So those are the kind of things that when we tell stories of how we case studies on how we did this, it's not just how do we go about marketing the property, but how do we really drive and get maximum value for it?

Yeah, absolutely. And that leads to my next question, because as a marketer, if you're not measuring success, you can't really track, you can't optimize, so you can't improve. So what metrics do you use to measure the success of a property marketing campaign?

Yeah, and we. If there was a fourth step to marketing, it would really be kind of the reporting aspect to it. But this isn't just, you know, you retain us to sell your property, and then we go run off, and you don't hear from us until two months and say, you know, hey, Annalise, we called for bids, and this is the highest price. No, you're getting reports from us at least every other week. And you're seeing the traction. And it's. We start up top with how many website hits have we got? So how many people have actually seen the listing? How many conversions from the E Blast social media stats? How many people are looking at the property through there, how many buyers have signed up, signed confidentiality forms to look at the property information? How many have toured, and ultimately how many have offered? So if you're looking at that report every other week and you see, okay, we're two months in, a hundred people have looked at the property, 20 have toured, and 10 have bid as a seller, I'd feel pretty good that we covered the market and we know that we have the right pool of buyers and attention on this, that we can now bring this to a head. So the reporting and the metrics, to your point, are really important to make sure that your broker's done the right job.

And this is my last question, and I wanted to talk about the trends in marketing in general. So what trends have you seen emerging? Like, if you want to talk about AI, if you're thinking about using AI in your marketing, what can you share with our audience?

Well, as far as new technologies adopted, and sure, we're talking about social media, and that's been around forever, but I think even podcasting, the fact is that we're putting information out there. I think this is helpful. And whether or not it's not property specific, I think there's a lot of things that you do when you're working with a broker to be top of mind. Right. So writing this book was not just to, you know, hopefully deliver a lot of value. But. But also, again, we're just. What we're doing is we're growing our, our audience, which is helpful in the process. So I, I want to, I want to say that before we talk about, you know, new ways. Look, I, I think with AI, and I know there's technologies that exist today where, you know, could you have a chatbot actually reach out, engage with buyers directly, that that technology already exists, you might be thinking that you're texting in to get request information on an apartment for rent. And it's not a human being, it's a chat bot that can answer your questions. Is there a pet policy? You know, what, what's. What are the terms of the lease? What are the amenities of the building? Schedule a tour. And then you show up and you say, well, hey, where's Angela? I was texting with her. Well, Angela's not even a real person. Like that exists. That's real. I think that works for apartments. I don't think that works for commercial. Commercial is really complicated. There's a lot of different aspects. There's a lot of nuance to it. I know there's also technology where if you wanted someone to make calls on your behalf and go and reach out and canvas. I mean, I don't know ultimately what, you know, I went through a process to get a license with the Department of State. If you had some automated, you know, AI doing that outreach, even if it's possible, like making quote, unquote cold calls, you know, does that work? Is that legal? I. I don't even know. But what I would say is that I think there's no substitute for that knowledge and that experience, and a lot of that isn't in the. The public domain. Right. So if you think about it, AI is basically just taking whatever exists right now online. But what doesn't exist is, you know, that. That knowledge, that experience. So we're certainly watching it. We're thinking ways. We're always thinking about how can we be more efficient with our time. So we're absolutely using a. Whether it's to generate research reports, whether it's to, to look at our own process and how we do things better as a team. But as far as the actual marketing and outreach, I don't think we're at the point where we would feel comfortable outsourcing that to AI Yet. Yet.

Thank you for sharing your wisdom today about the right marketing process. So the two main takeaways from today's episodes are maximizing, maximizing the exposure of your property and doing it in a controlled process. In our next episode we will discuss how to negotiate the best deal, what the bidding process is like, how to qualify offers and how the contract process work so you don't want to miss the next episode. Thank you James and thank you all for listening to the Insider's Edge and the Sell High series. Until next time, maximize your property's potential and sell high.

Thank you so much, Anneliese. This has been a lot of fun as always. And for those of you listening, if you've not gone to jamesnelson.com, you can do that now. Where you can find shows notes for this episode, there's also a lot of helpful tools there, white papers, video resources to help you gain the insider's edge to real estate investing. That's also where you can find how to connect with us. So again, until next week, thank you.

Maximize your property's potential, Sell High.