S.E.C. Real Estate Observer

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For 30 years I have been asked the question: “Why in the world should I take several days out of my schedule, spend money, and maybe travel a couple thousand miles to attend a marketing session?” The answer is because a marketing session will create transaction closings that could be achieved by no other marketing method. Through attendance at Marketing Sessions you are able to:

• Make a detailed personal presentation of your property/cash and the objectives of your client to a room full of other real estate professionals who are there actively expecting to initiate a closable transaction.
• Get a room full of real estate professionals to help you find a way for you to make your transaction.
• Expand your Equity Marketing expertise in the areas of formulas and solutions.
• Expand your specific market expertise within a property type.
• Expand your market expertise regarding specific geographic markets.
• Expand your network of market experts who are willing and able to help you with opportunities located outside your market and/or expertise.
• Find partners and lenders so you can become an investor principal.

In today’s marketplace, it is easy to find hundreds of property listings online. The S.E.C. now has an excellent property listing web site. So, why is attendance at these meetings soaring during a time in the marketplace where cash is in abundant supply? Why don’t the S.E.C’s just stay home and write cash deals? There are sites on the Internet with excellent computer programs for matching haves and want that will structure up to 5 and 6-way exchanges. Why is it that all this wonderful technology has NOT replaced the marketing session and made it obsolete?

THE ANSWER IS IN THE PEOPLE ASPECT OF DEAL MAKING. The best Equity Marketers know that our business functions through the interaction of brokers, developers, builders, investors, lenders and owners. Marketing sessions provide a unique opportunity to identify the people aspect of a property offering. Ultimately, people own property to receive the benefits of ownership such as cash income, capital growth, development for profit, direct personal use, etc. Owners go into and out of title to property or cash only because they need to change their benefits. In a marketing session there is joint focus by the participants on the people and the benefits aspects of each presentation. This focus will very often expose transaction opportunities that cannot be uncovered by any other means. When two or more principals/brokers exchange detailed information relative to their needs in a transaction, opportunities naturally unfold. When 70 experienced Equity Marketers are in the room working on a transaction, the results can be amazing!

CASE STUDY: Even a for-sale-only offering can lead to a totally unexpected transaction. During a session in 2004, a for-sale-only 50% vacant office building in a Midwestern city was presented. The two owners needed the cash from the sale for another business venture. The ideal taker, who was offering a free and clear development site, was represented in the meeting. The moderator identified the taker and elicited some “quick pitch” information about the taker and the development site. The taker property was not in the presentation book and would not have been presented except that the presented office building fit the taker perfectly. The taker was a partial user for the building. The quick pitch information resulted in a developer at the meeting saying that he was a taker for the development site if he could obtain some additional investor capital. Two participants indicated that they had potential investors for such a development deal. At lunch, all the players in that deal met and structured a multi-step transaction that resulted in the sale of the $2.3 million office building for cash and the development of a retail strip center in a ready-to-go location. That transaction closed about five months later after diligence and the arrangement of some financing. Everyone, including the brokers, were happy. This is NOT a unique example.

Marketing sessions are the primary venue in the EQUITY MARKETING segment of real estate because it is nearly impossible to match principals and their needs effectively using only traditional marketing and online property listing tools. Marketing sessions provide the opportunity to expose properties and investors with a focus on the benefits sought by the people that cannot be achieved in any other marketing forum. There is certainly no helpful owner information offered in a multiple listing offering!

The combined experience, expertise, knowledge and skill of the participants in a session can produce results that would not otherwise be possible. Even the most creative equity-marketing broker who has taken dozens of courses on creative structures and deal making techniques cannot always recognize when a formula applies to a property or people problem they are working on. When all of the participants in the room are focused on any one presentation, the resulting problem solving power is beyond measure. This is why part of the price of admission to a marketing session is each participant’s willingness to help all the other participants to complete a transaction that will meet the benefit needs of the owner or investor being presented to the group. This creates remarkable synergy in the room.

There are numerous other benefits to attending marketing sessions. (1) The exposure to ideas and creative solutions to ownership problems that surface during marketing sessions are quite often more valuable than the material presented in a majority of real estate seminars and courses. This is because the solutions presented are within the context of an actual potential transaction or ownership problem with real owners and real numbers. (2) The opportunity to establish personal face-to-face networking contacts across a wide geographic and expertise spectrum is invaluable. Having the correct phone number to call for help when you face an obstacle in a transaction is often the difference between closing and not closing. Sometimes it is the difference between wasting time and not wasting time on a prospective project. (3) Listening to property presentations at marketing sessions is like getting a market report for both the property type and the geographic location of the property being offered. In a multi-day marketing session one can get a feel for costs and the market in perhaps 10 or 20 different geographic areas across the country just by listening to presentations and quick pitches. This knowledge provides a great point of reference for working in ones home market. (4) Most sessions include cash “havers,” which often include 1031 money. If a participant does not have what the investor with the cash wants, they may know of the right property in their market. Having the source of the cash taker for a property you would like to list in your market is a great door opener.

Most importantly, Real estate is a PEOPLE business. PEOPLE own property, PEOPLE sell and exchange property and PEOPLE broker property. Adding the PEOPLE context of the brokers, the investors and the owners into the mix to create a transaction will greatly increase the opportunities for achieving a closing. PEOPLE can relate to benefits offered by a variety of types and locations of property. PEOPLE can encounter obstacles to completing a transaction and PEOPLE can creatively find a way to eliminate or compensate for such obstacles. Groups of PEOPLE can combine their knowledge, skill, expertise and experience and get results exponentially greater than the sum of the parts. This is why the top professionals in the Equity Marketing world attend a lot of marketing sessions. Attending a lot of marketing sessions is the most certain precursor to attending a lot of closings. SEE YOU AT THE NEXT MARKETING SESSION!