How to Communicate About Your Development in a Tough Market
by Sean Hathaway | Special to Banker & Tradesman | Sep 17, 2023
Since 2020, the “death of the office” has been discussed ad nauseum, spilling beyond the real estate industry as a focal point in conversations on the future of work. Three years on, there is still uncertainty over the eventual endpoint as companies adjust hybrid policies and in-office requirements.
As this plays out, dark clouds continue to hover over the real estate industry. But real estate is a cyclical game, and this is not the first time the industry has been “down.” You don’t have to dip too far into the past to recall the local development boom that followed the Great Recession.
Conditions change, and it’s vital to be cognizant of that when discussing a specific development or a strategic direction. Making definitive declarations is a premature exercise and offers the savvy communicator opportunities to tell a more positive story by following five principles.
First, focus on the horizon. Real estate coverage in the media tends to focus on the present and short-term future. Those brief windows, however, usually contradict the industry’s actual timelines, which take a much longer view. Deals do not happen overnight, and development projects are often pursued for their impact over decades of time rather than immediate returns. These are long-term plays and should be positioned as such in any communication around a development. This not only serves to counter skepticism over the current market climate, but it also reinforces the long-term vision that’s driving the project.
Second, highlight quality. As much as possible, playing up key, attractive fundamentals around a specific development, like location or quality of the product, can improve sentiment. Even within the current sour atmosphere, flight to quality is still active and underscores that appealing factors are always king. Drilling down on the key distinguishers can help to set a development project apart from competition and prevent being lumped into negative stories.
Stick to Your Guns
Third, stick to your guns. Saying the right things, however, is not enough. Actions speak louder than words, and the developer who preaches patience and confidence should continue to advance projects, proving that they disagree with cynical narratives and that they believe in the long-term vision. Conversely, a truly disciplined communication strategy also avoids potential pitfalls. For instance, if a developer preaches patience but does not demonstrate that in practice, the words will ring hollow. Much in the same way that momentum reflects confidence, backing out of projects or rapidly selling off properties can have the opposite effect.
Fourth, keep it simple. The wise developer will also avoid overcompensating for negative headlines with overly optimistic predictions that call credibility into question. Even in better times, heavy speculation is a risky move with the potential of blowback, and those risks can be magnified when investors are jittery. Prognosticating a rosy future that does not come to pass could be perceived as a lack of awareness or even worse, as an attempt to deceive. This has the potential for damaging reputations with both members of the media and potential investors or tenants.
Finally, aim for understanding – not sympathy. Given the state of the broader real estate industry, it’s natural to want others to understand the challenges at hand. It is understandably a difficult time to broker deals and raise capital. While there are strategic opportunities to share first-hand accounts and contextual background that shed light on what’s happening, appeals for sympathy are highly unlikely to yield the desired result. At best they fall on deaf ears, and at worst they are subject to mockery. Regardless of how one feels about that, it’s the direction the wind is blowing, so don’t go looking for consolation.
Real estate media narratives may point to doom and gloom, but that does not mean you have to sit on the sidelines with a good story to tell. Long-term strategies and strong fundamentals have always been at the heart of successful development projects, and communication is the same. Focusing on the value proposition of a development ensures conversations veer in a positive direction. While it may not prevent a negative story from running, it can result in favorable positioning that counters harmful storylines.
This article first appeared in Banker & Tradesman on September 17, 2023.