3:15pm | You haven’t heard much about real estate companies making money in the past few years, and you seldom hear about new home sales anymore. However, a downtown Long Beach based real estate firm is reporting today it had over $50 million in new home sales for 2009.
And if you ask the firm’s head how it was done, he’ll tell you it was “Sales 101.”
“We actually did well and made money in 2009,” says Scott Hamilton, president of DOMA Properties, which has its headquarters in the historic Walker Building on Pine Avenue.
As the real estate markets were in steady decline across the country and many condominium communities began auctioning off inventory, DOMA took a different approach with Stadium Lofts, a 390-unit condo project near Orange County’s Platinum Triangle developed by Windstar Communities and Cornerstone Real Estate Advisers.
DOMA developed a series of programmed sales “events” that led potential homebuyers to the property. Unlike an auction, which limits the number of homes sold and often suggests a project may be distressed, the “event” format maintained a positive perception of the community and allowed for a greater number of sales, Hamilton says.
DOMA sold 83 homes at their last event in March 2009, for a total of 335 homes sold by DOMA by the end of April 2009 and eventually resulting in a sold out project by the end of 2009. The firm was able to overcome the challenge of selling these homes in one of the worst economic downturns anyone has ever seen, and how they did it was back to the basics, says Hamilton.
“First off, everybody had their own sales agent who stayed with them the through the entire process, from showing the units to closing,” Hamilton says, adding that a “stepped” process in which potential buyers were shown units, prequalified and some were even invited to a pre-sale event, “sort of built a sense of urgency.” The final “event” saw 20 sales the day before the big day, and another 40 on the day of the “event,” Hamilton says, adding that “drop out was minimal.”
One key to sucess was instead of an auction with an impersonal presentation of units, in which potential buyers usually deal with several agents in a “cattle call” atmosphere, Hamilton says the “events” and the way in which they were set up gave buyers a “value proposition.” He adds, “It’s Sales 101, I guess, but not a lot of people practice that anymore.”
“Value proposition,” and “Sales 101,” may be Realtor lingo for “Deal.” Having the units priced right was a big part of the equation, Hamilton notes. Two-bedrooms were priced in the mid-$300,000’s and one-bedrooms were in the mid-to-high $200,000s. “They were priced right for the time,” he says.
Having properties that are well priced seems to be playing a big role in sales throughout Southern California, including in Long Beach, where DOMA has seen multiple bidding on many of the real estate, or bank owned, properties the company is contracted to sell, Hamilton says. “On our REOs, we’ve had 10-15 offers on every home that gets released,” he says. “There are so many people who are homing in on these properties.”
In the Walker Building where they are headquartered, just a few weeks ago there were at least four condos purchased immediately after being put on the multiple listing service, Hamilton notes. “If you are looking for a good deal, so is everybody else who is out there.”
Big Deal
A few years ago an office-building sale wasn’t worth mentioning; nowadays it’s a rarity to see a sale mentioned, as they are few and far in between.
Struggling commercial firm Maguire Properties Inc. sold an office complex in Santa Ana for $90 million under efforts by the firm to reduce debt and right itself financially, according to a Los Angeles Times story on Wednesday. The transaction was the largest office sale in Southern California this year, according to CB Richard Ellis Inc., which represented Maguire Properties in the deal.
Buyers Lincoln Property Group and Angelo Gordon & Co. paid cash for the Griffin Towers complex next to the Costa Mesa Freeway, a twin 13-story tower office complex built in 1987. The offices are 77% leased to tenants including Corinthian Colleges and engineering firm CH2M Hill Inc, the Times story states.
Office has been one of the biggest losers in the economic meltdown, getting hit with a double whammy as financing for buyers shrank and sellers began sitting it out as property values fell, and growing unemployment left offices increasingly vacant. Hopefully the Maguire sale is the first of many, and we will see that slumping sector finally begin to right itself over the next few years.
Grand Prix View
And for the last time…I promise. I’m still a few properties short for my column on how people use their properties during the Toyota Grand Prix of Long Beach and as I mentioned the last two weeks, I’m looking for a little help from lbpost.com readers.
I know, for example, that people in the International Tower hold parties or corporate events during the event each April. Anyone doing something like this in that building this year? I know West Ocean and Aqua also have good Grand Prix views, and there are some offices with stellar Grand Prix views.
If you know of anyone who is doing something Grand Prix related with their residential or commercial properties, or if you yourself are, please e-mail me at [email protected].