For the past several years luxury multifamily apartment and condo developers have experienced phenomenal returns on their investment as rents and sales prices continued to climb. But according to the winter 2017 edition of the Yardi Matix U.S. Multifamily Outlook, the good times are coming to a halt.
The problem is one of supply. As developers chased after the higher rents and sales prices luxury rentals and condos command, they flooded the market with luxury developments everywhere from megacities like Chicago and New York to smaller cities like Milwaukee, Kansas City and Jacksonville.
And the supply isn’t slowing. Yardis reports that 2017 will be the biggest year for new Class A supply since the financial crisis, with 320,000 new units expected to come online.
As supply starts to outpace demand, developers are beginning to struggle to command the top-dollar prices they’ve become accustomed to. A generic “luxury” brand is no longer enough. Now more than ever, it’s the development with a strong value proposition that’s going to stand out and make the sale.
Your value proposition acts as the entryway to your entire brand. By making it distinctive and inviting, you’re able to more easily stand out in the mind of your audience and make their mental shortlist.
Imagine the entryway to your building. Does your doorway blend into the background? Are your walls plain? Are your windows opaque? Is there anything about your entry that makes it stand out from the dozens of other entryways on your street?
Just as you would do whatever you can to increase your curb appeal and stand apart, you should work to make your value proposition as equally as compelling.
A value proposition works to define and articulate the reason why people should want to live at your development. The most compelling reason is often a point of differentiation, which means your value proposition should be defined before you even start development. A powerful value proposition will then literally be built into your building and your brand, leading everything from the design of the building to what amenities you offer to how you approach service.
If your development is already built, look for the aspects that make it special and develop your value proposition from there.
But what if your development is just another luxury building in a sea of similar offerings? That’s when you need to focus on your audience.
Remember, in a city of millions, you don’t need to create a value proposition that appeals to all of them. You need to develop a value proposition that truly resonates with only few hundred people or so. The more you can understand a highly specific audience, the easier it will be to connect with and ultimately convince them to check you out. The goal is make them feel like your building was built just for them. A tightly defined value proposition is just what it takes to get them in the door.
In our eBook How To Differentiate a Square Foot we show you the seven essential steps for building a luxury real estate brand that sells. By following our process, you’ll be able to create a brand that adds value and becomes it’s own differentiation point. Download the eBook now.