Challenges and Opportunities in the Current Market

BLACKLINE Thought Leaders Forum

BLACKLINE was created in a think tank of industry experts from across Canada. As part of our ongoing commitment to improving BLACKLINE, we are interviewing thought leaders in the pre-construction industry across North America. For this article we interviewed three of the brightest minds in the business:

Barrett Sprowson is Vice President Sales — Intracorp, Vancouver, BC.
Barrett is a highly accomplished sales leader with one of North America’s most successful and prestigious condo and apartment developers.

Tyler Strateman is VP of Client Services — InterCommunicationsInc., Newport Beach, California
Tyler leads the Client Services team for InterCommunicationsInc., a global leader in pre-construction marketing.

Michael Grossman is Director/Project Manager — Altus Group Practice, Eastern Canada.
The Altus Cost Consultancy practices is recognized as the Gold Standard in Canada. The world leader in real estate and construction data and information. Based in Toronto, Altus has 75 offices around the world.

Q1. What is the most valuable lesson learned from the market last year?

Barrett: “Expect the unexpected and price it to sell because the market changes quickly and catches everyone by surprise. The lesson is to be aggressive in pricing to garner market share and avoid holding onto inventory when the market slows down.”

Tyler: “You can’t ignore the importance of accepting the subjective interpretation of marketing communication. I believe that the externalities in the market have made clients more demanding and seeking a higher level of certainty due to the uncertainty in the market. Additionally, the
element of differentiation has become crucial to people, and the demand for unique, almost bespoke communication and visualization assets has increased.”

Michael: “The most valuable lesson learned from the market last year is perseverance. I emphasize the importance of continuing to do what works, even in a challenging market. I believe that if you are too anxious and start to worry, it can be detrimental to your success. I advise individuals to lean on fundamentals that have brought them success in the past, ignore the noise, and trust the process. I also believe that at this level, none of us are learning the formula, and we already know that it works. The key is to have faith and perseverance.”

Q2. What’s the biggest challenge you faced in the market in 2022?

Barrett: “The biggest challenge we faced was not getting greedy and overpricing inventory at the beginning of the year. By selling the inventory early, we managed to de-risk the building and avoid the current market‘s challenges. We currently have only three unsold homes, which we
are patient about selling at a profit. I suggest being flexible and working with the market, rather than holding inventory, is a better strategy.”

Tyler: “The biggest challenge my business faces is the desire for unique, bespoke communication, that draw people to want to be in a place. This makes it challenging to communicate the value proposition effectively, and it requires a lot of effort to create a case that makes sense to clients.”

Michael: “As a leader, an ongoing challenge is helping my team deal with market conditions and client expectations. At Altus, we care a great deal about the people on our teams and feel a responsibility to help them thrive, not just professionally but also personally. The quality of their work environment is paramount. Recent years have presented unique challenges and I am proud of how everyone on the Altus team has worked together to help our clients achieve their business goals, and in so doing, help Altus achieve our corporate targets.

Q3: What’s the greatest opportunity in the current market?

Barrett: “I believe the current market presents an opportunity for those who are ready to act when the market stabilizes. I suggest that realtors should know where they stand in the market, price their products correctly, and be ready when the signal is there. I believe that the greatest
opportunity is to be ready today and take advantage of the market when it turns. I think that being ready will help realtors catch the upswing early on. I also believe that there is a big opportunity in getting rental projects in the ground because of the ongoing demand for housing and the ongoing inflation of prices, which is pushing more and more people into rental as
opposed to owning.”

Tyler: “I suggest that the current landscape offers an opportunity to position oneself in the market, as not everyone is sprinting at it and buyers have pulled back. I advise that the opportunity is to ride through the cycle to get sales, and to acquire assets that developers have spent a lot of money on, but which have now pulled back. I suggest that this may be the best
time to buy.”

Michael: “I’m focused on the real estate market and the opportunities available in a down market. I like to point out that during the 2008 market downturn in Florida, smart buyers took advantage of the low prices and have since made significant profits. I also note that there are now smart sellers in the market who are willing to negotiate on pricing and terms. I emphasize that although there may not be as much upside potential in the current market, there are still opportunities available for those willing to take advantage of the slowdown.”

Q4: What’s the most strategic pivot you plan to make in 2023?

Barrett: “I believe that the most strategic pivot I plan to make this year is to get rental projects in the ground. It takes a long time to move the ship, and some of the projects that were in the pipeline five years ago are just now coming to fruition. The focus in 2023 will be to get these projects on the ground and be ready to lease them up in three years. I believe that the ongoing demand for housing and the ongoing inflation of prices make rental properties a tremendous strategy for real estate companies.”

Tyler: “I have two key strategic pivots for 2023. The first is the emphasis on compelling reasons that would make people want to buy a product, particularly focusing on the emotional and lifestyle decisions of the customer. The second pivot is to focus on what clients really need rather than what they want. I recommend that clients focus on a handful of things such as a well-done website, impactful videos, and communication pieces that tell a story. I also mentioned that it’s crucial to have something that’s authentic and believable, which is not superficial, but genuine.”

Michael: “I believe that there are opportunities to be found in the current real estate market, despite the downturn. We approach buying by being willing to pay more than others, as long as we get the terms we want, which ultimately benefits both the buyer and the seller. I stress the importance of being courageous and working within the current parameters of the market. I also note that big players in the market are still making purchases, indicating that there are still opportunities to be found.”

Q5. What’s the next part in your sales and marketing process you plan to digitize?

Barrett: “Digitization can help optimize the sales and marketing process. BLACKLINE helps us start selling in four to six weeks, while the presentation center is being built. I know the importance of maximizing revenue from remaining inventory and the BLACKLINE system gives us the
ability to do so. Qualified leads mean a lot to us. We agree that the BLACKLINE system is set up well to do the early qualification process. I suggest starting with the BLACKLINE process to figure out the demand while the presentation center is in construction. I also suggest lining up
the strategic timeline of going to the market and doing certain things digitally with the presentation center.”

Tyler: “I believe that video has become one of the most important tactical assets for conveying information about an opportunity. People are becoming more interested in watching videos than reading lengthy prose. I think that video is a thoughtful asset that can be used at a lead
generation level and also at a deeper stage of the onboarding process. Video can be spliced up and put in different mediums, like email or short blurbs, to touch potential customers repeatedly over time.”

Michael: “We are currently working on a project management style software that will streamline our processes and push us beyond the future. Typical project management software can manage things such as minutes, cost reports, budgets, change order flow, and monthly reporting, but there is a nuance and variability to it that certain software cannot capture.

Altus Group, being at the cutting edge of some of the technology in real estate software, is excited about the potential of their new software. Once fully implemented, it is expected to be a game changer for the company. ”In summary, Altus Group is focusing on digitizing our project management processes with a new software that will streamline our operations and provide us with a competitive edge in the market.”

Q6. What digital tools are you using to enhance customer engagement success?

Barrett: “We are definitely using digital tools to enhance customer engagement. Which is why we work with groups like yourselves, with the platform that you provide, helps us, when we bring a project to the market. We’re able to de-risk that and be really efficient about it.”

“And that’s one of the things that we like about your platform and your system that’s really efficient with our launch program and then we can kind of take advantage of the demand when it’s there and make the most of it. If you’ve lots of demand, we can write deals before we get people into a physical space.”

“I think if we try and line it up so that if we’re taking the risk of building the PC and having it sit for a little bit longer than we’d like. Then layering in, and maybe we start, while the PC’s in construction, with that BLACKLINE process of figuring out the demand.

Then when we can get people into the PC to touch and feel, then we’re converting that to contract. But we’re definitely relying heavily on that early kind of qualification process through the BLACKLINE system which is set up well to do so. It’s the goal that we’ve got interest from people, and then what does that mean is in terms of what are they interested in, at what price and that type of thing.”

Tyler: “Digital tools can be valuable in more mature stages of the project, particularly when generating new leads and trying to move people through the sales process in an effective and streamlined way. However, in the early stages of a project, personal relationships are more important and digital assets may not have as much weight.

It is important to be careful about how and when digital tools are introduced and to bring them in at the right stage of the project. For example, during the first round of insiders or founders, it is important to handle things differently and focus on personal relationships rather than relying too heavily on digital assets. As projects progress and more customers are involved, having polished and efficient digital tools becomes increasingly important to avoid losing prospects.”

Michael: “Customer engagement is an important part of our business plan and is especially challenging in the current market. We are so focused on client priorities and deliverables on a day-to-day basis rather than engaging with customers through social media or other organizations. No question that we need to improve on our customer engagement and I want
also to do more internal events to keep employees engaged and excited about working here.

Q7. What are the pain points you’re seeing for your clients?

Tyler: “The main pain point for clients is trying to sell products before having everything ready. This leads to the question of whether they have enough information to allow the buyer to make an informed decision. In the early stages, having a non-polished product is okay, but clients want to be in the market, but they know they cannot get out there without having enough to capture a spectrum of people who are highly imaginative or not imaginative at all. Clients struggle with covering that spectrum and they want to be able to do so.

There is not one buyer type that you can create your assets around and trick; you’ve got to be able to capture people that fall within a spectrum. The challenge occurs when the timing of the market does not align with what the client has available that’s defined on the design end of it. The delays are usually due to indecision or lack of timely decisions on the client’s end.

You can make all the critical paths in the world, but as soon as the client breaches that, they don’t think anything else on the critical path is going to move. You talk to the client and say, in order for us to hit this target, which is the one you want, this is when things have to happen. If something doesn’t happen, then if we lose a week, then it moves a week. The challenge is the client always being impatient about getting to market and not having enough assets to really do their job. Clients need to get comfortable with having enough to get people to that point where they’re willing to make a reservation or make a commitment on a purchase in an early stage.”

Thanks to our panel of experts for their tremendous thoughts and insights.
And thank you to our readership for taking the time to read this article.

We hope you found it educational and inspirational.

Look for our next article coming soon!

Peace ✌