Developer Case Study
Residences at Mandarin Oriental Atlanta
The Mandarin Oriental Atlanta, which includes a hotel and luxury Residences, was designed by acclaimed New York architect A.M. Stern. The project was initially branded as a Rosewood Hotel and Residences and was completed in 2008, a time in which the housing crisis was in full swing. As a result, sales of the Residences were stalled, and the perception was of property in trouble.
In 2010, new owner/developer Istar Residential took over the project and re-branded the Hotel and Residences under the Mandarin Oriental name in 2012. But the name change didn’t jumpstart sales as expected. Sales remained almost non-existent during 2012 and 2013, despite a heavyweight real estate firm handling the sales and marketing.
In December 2013, the developer hired Karen Rodriguez to take over the stagnant project based on their phenomenal success in selling out the nearby Ritz-Carlton Residences in a challenging housing market.
At the time Karen took over the project, just 15% of the Residences had been sold in three years, sales office traffic was very low and the perception of the property needed to be turned around. Her challenge was to re-position the building as a premier address and erase the negative effects of the building’s previous lack of sales and low pricing.
Karen Rodriguez and her GROUP KORA team quickly assessed the current sales and marketing strategies, conducted market analysis to identify gaps about the luxury market demands and determined that the Residences needed a completely new branding, marketing, and sales campaign.
Karen quickly puts a plan into action which included capitalizing on the equity of the Mandarin Oriental name and integrating the hotel brand and services into all facets of the sales process. This included revamping everything from the sales presentation to the advertising, publicity and marketing materials. They also created ambassadors by educating the hotel staff on the Residences and getting them excited about being part of the project so they would spread the word as they interacted with hotel guests.
The results were immediate as sales increased by 150% within the first 90 days of GROUP KORA'S involvement.
Once Rodriguez proved that GROUP KORA’s sales and marketing strategies were working, she began working on the crucial next step. Previous consultants had convinced the owners that luxury buyers wanted to make all of their design and finish decisions, so GROUP KORA was working with unfinished spaces. With a starting price point of $2 million dollars, the Residences were not being presented to potential buyers in the best possible light.
Rodriguez believed that just the opposite strategy was needed to maximize sales.
She convinced the owners to begin building out the shell spaces into finished homes using three pre-selected palettes, the finest craftsmanship and finishes and open concept floorplans. Together with the team at Harrison Design, they also made the bold decision to use a clean, contemporary design aesthetic, which would set the Residences apart from most of their Buckhead competitors which were deeply traditional in their design.
Eight homes at a time were built out, which meant that busy luxury buyers were able to see a few different finished properties, make an offer and close much more quickly than in the past. This also allowed GROUP KORA to create demand, build momentum and raise prices as certain floor plans and floors became limited. Also, it showed potential buyers and Realtors that the new ownership was committed and financially stable.
In a marketing coup, GROUP KORA teamed with HGTV to create an Atlanta Urban Oasis Dream Home at Mandarin Oriental Atlanta in 2014. GROUP KORA worked with top celebrity interior designers and leading modern brands to create a drop dead gorgeous residence with cameras following along every step of the way. The special aired in prime time on HGTV, with numerous repeat airings and represented an estimated $500,000 of free advertising and publicity for the project.
The housing downturn claimed many victims in the luxury residential space. The Residences at Mandarin Oriental Atlanta flourished instead because of the strategic planning and decisions GROUP KORA brought to the project. Take a look at the results since 2014:
- Increased sales by 150% within the first 90 days
- Exceeded sales absorption numbers by 60% year over year
- Increased price per square foot by 25%
- Increased pricing by 10% year over year
The Mandarin Oriental Atlanta was the #1 Atlanta Luxury Project in Sales in 2014, 2015, and 2016.
THE RITZ-CARLTON RESIDENCES, ATLANTA BUCKHEAD
Located in the heart of Buckhead, this 129-unit luxury condominium building began construction in 2008 and was completed in 2010. Its construction took place during the worst period of the housing crisis when neighboring buildings were going into foreclosure or never completed, and the luxury condo market primarily came to a screeching halt.
Karen Rodriguez was brought on by the developer in 2009 for pre-development advising and to oversee marketing and sales for the building, and her results defied the market conditions. The Ritz-Carlton Residences became a true phenomenon as Rodriguez, and her team facilitated a quick sell-out, netting more than $100 million in 2-1/2 years.
A key component from the outset was crafting a strong message of stability for the building. The developer was able to financially cover the costs of the build-out, forgoing the usual approach of hitting a pre-sale requirement. This provided much-needed confidence to buyers who were seeing just the opposite situation in competing buildings. Through a thoughtfully-constructed PR effort, marketing materials and a highly-informed sales team, Rodriguez was able to get the message out – this developer is financially stable and committed to seeing the project through.
The Right Price
Next, Rodriguez set a realistic pricing strategy. She was able to promote that while the homes were built to the highest standards, the prices were reflective of the market slowdown. This competitive pricing at the outset allowed small price increases along the way, even as everyone else was making major price decreases and further communicated the message that The Ritz-Carlton Residences were stable and an attractive investment.
Turning a Negative into a Positive
The Ritz-Carlton Residences were not part of a Ritz-Carlton hotel, but shared the Ritz commitment to excellence in amenities and service. Therefore, the HOA dues were the highest in the city. Rather than focusing on this as a negative, the sales team was able to craft a message that provided a benefit: residents would not have to share the staff’s time, the services and the amenities with hotel guests; they would be exclusively reserved for residents. This proved to be a compelling message and owners were willing to pay more to have this level of security, privacy, and service.
Rodriguez knew that half of all luxury homebuyers want to finance a portion of their purchase and she also knew that traditional financing was going to be out of the question for many in the current climate. She spent months working with a handful of lenders who were willing to come up with creative methods of providing financing to Ritz buyers. While other buildings were only able to work with all cash buyers, Rodriguez’s strategy paid off for all involved, and Ritz buyers were offered financing options which significantly increased the buyer pool.
Because of Rodriguez’s involvement from pre-development until the project’s sell-out, she was able to provide the type of results that made the Ritz-Carlton Residences a true success story during a time when casualties far outweighed successes in the housing market.
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