In Manhattan residential real estate, Wall Street bonus time is business time, and business is good.
With news that this was the best year ever for bonuses, and following a strong 2005, real estate brokers and agents are primed with strategies to capture a portion of Wall Street’s good fortune. According to the New York state Comptroller’s Office, Wall Street bonuses set a record of $21.5 billion in 2005, surpassing the previous record of $19.5 billion set in 2000. That translates into an average bonus of $125,500 – also a new record, though that number tells only a small portion of the story.
Depending on a person’s role and level, bonuses can easily reach into the millions of dollars, sending many in the Wall Street crowd out shopping for cars, jewelry, and, of course, Manhattan apartments.
The Hudson Condominiums, a new luxury building at 225 West 60th Street marketed by the Developers Group and Halstead Property, where apartments range from $795,000 to more than $2.5 million, isn’t at all bashful in its effort to attract Wall Street buyers. Ads placed on telephone kiosks around the city shout: “You Know Where You Should Stick Your Bonus,” “As If Your Friends and Colleagues Weren’t Jealous Enough,” and “A Home Address As Enviable As Your Work Address.”
Ramona Mahtani, director of sales and project management for the Developers Group, which dreamed up the ads, said she viewed the pitches as “a bit of a risk,” but when she vetted the campaign with her investment banker friends they got a good laugh.
“I wanted to have a little bit of fun with it,” Mahtani said. “When you are targeting the investment banking community you can be a little tongue-in-cheek – they aren’t going to be offended by it. Everyone knows the real estate community is targeting them at bonus time; you may as well have a laugh about it.”
Cantor Pecorella Inc., which is marketing one- and two-bedroom condominiums and penthouses at 555 West 23rd Street, ranging from $750,000 to more than $1.4 million, also took the direct approach. A recent Wall Street Journal ad for the building suggests to “Live Your Bonus” by purchasing one of its units that comes with an “Executive Package,” sporting amenities such as a year of free parking and a membership to the nearby Chelsea Piers sports complex. The package includes valet service and other amenities targeted to young, busy, affluent people, said Cantor Pecorella principal Richard Cantor.
“The real key,” he said, “is that the people who are interested in living in this community require, by-and-large, the amenities we offer in this building.”
Not all agents get big marketing campaigns. Dulcie Lin, a sales associate at the Corcoran Group, is drawing on nine years’ experience in institutional trading at Goldman Sachs & Co. to make contacts. It also has provided intimate insight into what kind of service Wall Street clients require.
“You have to have your Blackberry, your laptop and your cell phone – you have to be connected to the office at all times,” Lin said. “They are used to reacting quickly for their own clients and when they look for service providers, they expect the same.”
Edward Herson, vice president at Halstead Property, has developed a plan to target Wall Street customers. His general marketing approach includes mailing quarterly postcards with updates on the status of various real estate developments, or a recent one on which a mortgage broker discussed what the appointment of the new Federal Reserve chairman might mean for interest rates.
“I’m not asking for an appointment. I’m not asking for something from them,” Herson said. “I am giving something to them.”
In October and November, in anticipation of bonus season, Herson steps up his mailings by sending out data on the current state of the real estate market and an outlook for the coming year. He also travels to potential clients’ offices, often at investment banks, to do a 25-minute informational presentation with an attorney and mortgage broker about the New York real estate market for groups of four or more.
“The real value is a viral marketing – the getting in front of people.” Not every presentation leads directly to a sale, but instead sometimes leads to a referral, Herson said. “If they bump into someone [looking for a broker], hopefully they’ll remember me and mention my name.” Herson estimates that he gains one buyer or seller from every 10 appointments.
Like Herson, Jacky Teplitzky, executive vice president at Prudential Douglas Elliman, provides Wall Street clients extra information, including charts, that show how the New York real estate market has evolved over several decades and a lot of information on recent comparable sales data to satisfy their need to be sure they are making a sound investment.
“You have to be about numbers and you have to be very accurate,” Teplitzky said. “You have to give out a lot of information. Now more than ever they are concerned they are going to be the last fools on the planet paying too much for whatever they buy.”
Part of the marketing for Blue, a new 32-unit condominium development on the Lower East Side, includes a Web site that contrasts sleek blue graphics with a gravely recording of Etta James’ “At Last.” The marketing message may evoke feelings of nostalgia in some, and, for the Wall Street mind, could suggest that the building offers an opportunity to get in on the ground floor of something new and “buy low” – an important investing principle.
“There is a lot of value in this neighborhood,” said Corcoran Group senior vice president Barrie Mandel, who is exclusively marketing Blue. “The neighborhood is coming into its own, and it’s at the very beginning of a lot more building going on on the Lower East Side in the next three to five years.”
While appealing to and working with Wall Street clients requires a more tailored approach, some parts of the transaction can be easier than working with a wider customer base. Wall Streeters tend to be more comfortable than other customers with the big numbers involved in buying property in Manhattan and are typically realistic negotiators, said Barbara Fox, president of Fox Residential Group.
“They are generally very reasonable,” she said, “and they understand that to make a deal there’s a give and take.”