Models on the rocks in recession

The crash of the commercial and residential real estate markets has brought its own kind of turmoil to companies that do renderings and model making: They are closing or thinning their ranks to skeleton crews.

And the downturn may not just be changing the way they do business now. It could have permanent repercussions to both their workloads and the way they prepare property visuals for consumers in the future — after the economic recovery.

Indeed, there’s already at least one company that’s trying to capitalize on the new emphasis that developers have put on cost-cutting with do-it-yourself rendering software.

Marc Lamoureux — president and CEO of Alpha Vision Group and Pure, two sister companies based in Miami that create renderings for many New York real estate developers — said developers are increasingly making do with renderings from architects as opposed to using the more elaborate images from a professional renderer.

And his companies are trying to make that process easier, while simultaneously creating a blockbuster product for themselves. Alpha Vision has developed tools so developers can quickly upload their floor plans into Alpha Vision’s viewers, software that makes them interactive for customers.

Lamoureux is confident in the technology, noting that when the market does pick up, developers may still not have the money to build model homes or apartments. Alpha Vision has also already created a new tool to enable it to put together digital model homes or condos cheaply.

Developers and real estate marketing executives speculate that the future of renderings and models may be permanently scaled back.

“I see that kind of marketing medium being used less and less now, purely because the market is dictating that buyers want to physically see and touch and feel a space,” said Shaun Osher, founder and CEO of Core, which specializes in new developments.

Osher estimated that the developers he’s working with on future projects are spending about 90 percent less now than during the boom for this type of marketing. For example, two condo projects about to begin marketing in Downtown Manhattan, which Osher wouldn’t name, are using only photographs and no renderings in their marketing.

With presales no longer happening at new development condos, photography is a logical and cheaper option than renderings, he said.

“People are a lot more budget-conscious than they have been in the past, and [renderings and building models] were one of the first things to get value-engineered out of a project,” Osher said.

The recession “has killed the industry,” said Lenon Kaplan, the owner of Lenon Models, based in Manhattan, which creates building models for residential developments, government projects and cultural institutions, many in New York City. “Like 99 percent of the work is gone. We are considering closing, but we’re not.

“I know firms that have closed, and large-staffed firms that are down to a few people.”

Meanwhile, rendering and model-making companies worry that preconstruction sales may not come back in vogue once the economy bounces back and development begins anew.

But Steven Charno, president of Douglaston Development, known for its large condo and rental apartment projects, said it’s possible that lenders, now more cautious, will make presales a condition of loans even in the New York area, which bodes well for renderers and model makers.

Even if that isn’t the case, there will always be a need, to some degree, for renderings and building models, he said. Developers will always want to impress potential buyers. “You’d still have a sales office, and a building model can be illustrative in terms of showing different things. The cost of a model compared to the cost of your project is not a giant cost,” Charno said.

“You would still do renderings, because you still want to get word out and show people your product as early as possible,” he added. “Even if presales aren’t required by lenders, maybe some people will buy before the building’s complete, because maybe the pricing will be better early on.”