A More Efficient Process

by Chris Sally

Selling real estate may be an old profession, but the method of conducting business is changing rapidly.

Technology has leveled the playing field and is enabling small firms to compete and win in the marketplace.

Selling real estate may be an old profession, but the method of conducting business is changing rapidly. The days of lugging around a portfolio stuffed with notes, contact lists and calendars, and spending most of the day in a crowded sales office are almost over. Those days remind me of a scene from the real estate movie Glengarry Glen Ross, with this inspirational message from the broker to the sales agents: “First prize is a new car. Second prize…a set of steak knives. Third prize is you’re fired.” Technology has leveled the playing field and is enabling small firms to compete and win in the marketplace.

As a partner in a small downtown real estate development and consulting firm, recent advances in technology enable us to receive information quicker, communicate with our clients more effectively and deliver services that, until now, have been offered only by much larger firms.

Success in real estate development hinges on a developer’s ability to identify opportunities, craft a sound development plan, secure financing and bring the project to the market in a cost-effective manner.

Finding development sites once required countless hours of driving neighborhoods and knocking on doors. Even after finding a potential site, we only could hope that the project was located in the right zoning, incentive and market area. Sophisticated software can reduce this process to just a few hours. Using Geographic Information Systems (GIS), you can purchase readily available data that can map a vast array of information quickly. This software allows developers to eliminate the guess work and identify quality projects.

GIS software packages also allow you to query sites that meet project requirements. For example, you could search for vacant lots of a specific square footage and the program would return matching parcels. Demographic information then can be overlaid, along with zoning, tax abate-ment zones and potential state financial incentives. This information can reduce thousands of potential development sites to a handful, and allow you to identify which properties match your criteria quickly.

Once the development site has been identified, conceiving a feasible project and attracting financing is the next step. The previously laborious process of architectural-massing analysis and pro-forma evaluation can be expedited utilizing pro-forma software. These programs allow developers to complete sensitivity analysis comparing construction costs, density and other sales variables in a fraction of the time as traditional means.

Even marketing the property is easier. Today, pre-sell requirements by lenders make branding the most essential element of the development process. Regardless of audience, investors or potential buyers/ clients, most of us are still living in the Show-Me State. Technology is cheaper than brochures, watercolor renderings and hours of sales pitches. Computer- driven renderings and animation turn concepts into reality and bring a project to life.

National interest in Kansas City’s real estate market has raised the bar in terms of the need to position your project in a competitive environment. The entrance of Cordish, MCZ, and Time Equities into this market has introduced national experience and innovative concepts.

There are companies that specialize in this area. They create virtual photographs that convey both the architectural details of a project and, more importantly, illustrate lifestyle and culture. These tools can be incorporated into a project web site, e-mailed to potential tenants and incorporated into DVD-based video tours of the development. These programs reduce the pre-sales period dramatically and ultimately secures financing, allowing developers to realize their vision.

Creating the experience prior to construction not only enables developers to complete their project, but also increases the bottom line. If a picture is worth a thousand words, what is the worth of a professionally narrated, 5,000-frame computer animation DVD that virtually walks you into and through a project? You do the math.

This is a new age—and winning a set of steak knives just doesn’t cut it anymore.

Chris Sally is a Partner with Development Initiatives, Inc. and an Ingram’s 40 Under Forty honoree from 2003. He can be reached at 816.808.9848 or by e-mail at csally@di-kc.com.