IT'S ALL ABOUT THE BROKER
It's all about turning the design and renovation business on its head and it’s all about partnering with and giving the brokers a tool to help them sell the premium estate residences that they never had before.
So about three and half years ago a terrific, generous, premier real estate broker reached out to me laying out the problem: She was trying to sell a penthouse apartment on Park in the 70s and the master suite had an absolutely horrendous floor plan. It seems that the seller about to list the apartment with her, previously turned the top floor into a hodgepodge of space without a grand and dynamic master bathroom, dressing room, master suite – and the broker reached out to me and asked if I could take a look at the floor plan and offer up a solution. It was 1pm. She said she needed a solution before 5 that day!
So I gathered my troops in our studio together and four hours later produced what was received as a spectacular master floor - we hit all of the buttons that she had asked for and I have to say it was a pretty game changing layout. We sent over the proposed floor plan and we were told "great job - now, put your name on it". I responded:
"really? you want us to put our name on the proposed floor plan?" She said yes it’s fantastic work and you should get the credit for it". So we did.
Four days later, the apartment sold above asking price.
Now here's where it gets even better.... - Two weeks later the new buyer called to discuss the renovation that we designed. Talk about a win-win! It was absolutely a fantastic moment!
Over the course of the next 2 1/2 years, we did similar proposed floor plans for this and a few other brokers that we knew - all efforts resulting with tremendous successes on both the brokers end and ours as well.
However, we only did this sporadically and really didn't focus on it to any great degree. In retrospect, I'm not really sure why but it took a second meeting with a townhouse seller - to really get my creative business wheels spinning and get hit over the head with the A-HA moment!
Here's what happened...
In the summer of 2014, the seller of a gorgeous townhouse on the Upper East Side asked me to walk the house to discuss a possible consequential renovation. While the house had been listed and priced correctly at 16.5 million, - the seller was getting offers in the 13 to 13.5 million dollar region.
It was clear to me that the owner of this house was passionate about the home they had owned for almost 30 years and by the time we got done with a walk-through of the six floors of the house we came up with a scope of work for renovation that was well in excess of $1 million.
The owner reached out to me the next morning ask what my thoughts were on the possible renovation and the associated costs – knowing all the while that the game was to renovate the house in order to get a price point that they were far more comfortable selling at. Given the incredible location of the house and the width (a 22 foot wide townhouse) I knew that if this house were done to a premium level they would be able to sell it for far greater than the asking price.
After chatting for a few minutes with her and her husband (who was conferenced in from his office in Hong Kong) I made the suggestion: I felt so confident that if this house were done with premium level of work and finishes that they could sell easily for 18 if not $19 million –
I offered to do the renovation at 50 cents on the dollar as long as I could split the profits of the sale price above $17 million dollars.
The phone went silent for a couple of seconds and I thought that I had dropped the call considering I was on my cell but then the husband responded by saying that it was:
potentially one of the best business ideas and offers he had ever heard
in his 40 years of running companies all over the world - and that he needed 24 hours to consider it. I said "of course" and waited to hear.
The next morning I received a phone call from his wife saying that she had some good news and some bad news. The good news is that their plan was to leave New York City for about a year and come back and that I would definitely be their designer/ builder on their new project in 2016. The bad news is that just that morning they received an offer for the house at $15.75 million - pretty close to their asking - to which I replied "take it – that makes a ton of sense". I still feel good about the honest feedback I gave them even if it cost me a potential windfall.
But it was that experience and conversation that opened my eyes to the potential which my 24 years of designing and renovating brought to the table and how it
integrates into the real estate and serves the brokers as an incredibly powerful tool.
So I decided to take it to the next level...
With all the new construction taking place in not only Manhattan but throughout many premier communities selling new construction for prices that are almost stratospheric – it is the selling of the estate residences in the premium cooperatives and estate townhouses that is proving to be the most challenging for even the premiere realtors.
Having potential buyers come through these residences with architects and designers and contractors, quoting prices, and budgets that resemble telephone numbers rather than a real, down-to-earth approach to design, and construction budgets - presented a tremendous opportunity for my firm:
To pre-design, specify and document plans and budgets down to the smallest detail - to illustrate what a down-to-earth approach in a high end renovation would actually cost and what finishes it would actually result in.
using these proposals as a developer would in a new construction presentation.
I thought it might be a good idea welcomed on some level by a few people. What would happen next would be way beyond my imagination.
After approaching the idea to two or three premiere brokers for their feedback, it was in a meeting with arguably one of the top five brokers in Manhattan who listened to what I was proposing in total, looked me straight in the eye when I was done and said: "you don't know this but we need you so much more than you need us it's ridiculous". She said:
"we have architects we know who can design these projects but they don't see the big picture when it comes time to establish real and efficient budgets. We know contractors who can bid the work but without the plans and specifications - they are useless."
"What you are able to do here no one else can; you have the design experience, you have the build experience, and most importantly you have the resume that no one else has,"
"your model will help us close the deal. Absolutely Brilliant!"
I walked out of that meeting and was seriously giddy from the positive feedback. In fact that’s all I needed to hear in order to give me the enthusiasm to offer this up to a tight and premium network of realtors that we currently work with.
It has game changed the entire way we approach our business, and equally as important - has cemented our position as the premier design build firm in New York City, all with the down-to-earth, one stop, turn-key approach to a renovation at the high-end.
To date we have pre-designed and specified 15 residences in the last three months and over 60% have sold on our plans and budgets presented to the prospective buyers.
The total value of the real estate sold is in excess of 75 million dollars.
Currently, we have approximately 300 million dollars worth of residences that we are working designs and specifications for - all with the hope of making it a win-win for our firm and the realtor and buyer of the properties.
This is an exciting opportunity for us and going forward we look forward with a tremendous amount of promise as to what it will hold for our future as an organization.