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The SoHo effect and the importance of market expertise

Oct 5, 2016

denver-neighborhood-207488-edited.jpgI work in LoDo. It’s southwest of RiNo and due south of LoHi. I live in NoMoSoMLK (which I just made up). It’s all in Colorado. You know, where South Park is located. Home of The Lofts and Residences of SoDoSoPa.

These are what Roman Mars and the crew at 99% Invisible call “acronames.” Search American cities from coast to coast and you’ll likely come across one or two of these neighborhoods. While many older cities still preserve traditional names (like River North and Wicker Park in Chicago, where I grew up), the trend got its start in the Big Apple. That’s right, SoHo in New York City.

The name SoHo (derived from from South of Houston, and make sure you pronounce that right) has become so commonplace that it doesn’t warrant the eyeroll so commonly associated with acronames. It’s the newcomers like NOBE (North Oakland, Berkeley and Emeryville) that draw suspicion and ire from locals who see these names as cheap marketing ploys. Regardless, once a name gets a foothold (and is used by residential real estate agents), it’s likely to stick.

Why does this matter in commercial real estate?

Bill Shakespeare had a good question when he asked, “What’s in a name?” When you’re talking real estate, a lot.

Think of your city’s neighborhoods and what those names mean to you and the area’s residents and workers. Chances are you already have a building, street or favorite hangout in mind. Chances are your client does, too. No matter their view, it’s your job to help reinforce, reshape or build the vision around these places to advise them in their property decisions.

Let’s think back to Chicago. The very word “Chicago” conjures up thoughts, images and feelings. Further localize Chicago into “Northside” and “Southside” and those thoughts, images and feelings become more personal. Go down to the neighborhood level, like “Wicker Park” and “South Loop,” and you get an even deeper sense of the everyday lives of the people who inhabit those streets.

Best Practice: The Market Story

If you’re not thinking about your market or submarket in this way and building a vision, it’s about time you start. Even if your client is well versed in the market, knowing what makes it unique and having a personal perspective helps build connection. These things are vital in earning new business. Investors, business owners and tenants want someone who can at the very least talk with them on the same level. Unique insights are icing on the cake.

How to know your market inside and out

Here are some ways to master your geography and become a neighborhood evangelist—and in turn become a market expert to your clients.

1. Canvassing & cataloging

If you have an assigned geographic submarket, you should know every building, every owner and every tenant. Simple in concept, difficult in execution, but very worth it. High performing brokers from all across the country will tell you that dedicating yourself to becoming an expert is an investment. Investments have an upfront cost, but the ROI of knowing your market is what keeps the pipeline full and the commission checks coming in.

Read: Understand Your Subject

To stay abreast of new buildings, their owners, tenants and new developments, set aside time each week for driving, walking or cycling your market. Get your boots on the ground, talk to workers, talk to office managers, introduce yourself to doormen and look beyond the obvious. The things you observe and your personal experiences are central to your ability to understand and articulate the market.

You should also use data tools that include maps. Click around the map, identify ownership, view property characteristics and take note of spatial relativity to things of interest.

Regardless of your method, record everything in your CRM. Take pictures, capture notes and observations and then build out your personal database as a reflection of your market knowledge. In doing so, you are building an incredibly powerful sales tool.

2. Land use & zoning

To know a place like Denver’s RiNo, you have to know what buildings and improvements comprise it and moreover what can comprise it. You must understand current land use, future land use and the underlying zoning code, which is precisely what the city planner in New York did with SoHo.

SoHo’s original name was South Houston Industrial Area. When the time came to analyze the existing conditions and devise a future for the South Houston Industrial Area, Chester Rapkin had a vision. He understood the existing use but saw something other than dilapidated manufacturing buildings. He saw what could be and thus pioneered the approach that made it what it is today.

RiNo (or River North in Denver), along with countless other submarkets around the U.S., has a story that closely resembles SoHo’s. RiNo was largely industrial, but is undergoing a shift to become a creative center for startups, artists, restaurants and retailers. Knowing where the long time tenants still are located, where the new tenants are and where the new retrofits are is essential to knowing RiNo.

The land use and zoning maps for your market should be at your fingertips at all times. The great thing about these maps is that they are visually color-coded, helping burn an image in your head that you’ll see as you canvas your market (take a look at Washington, DC if you want to see an example). With your eyes you’ll see an old brick building with a yard, but in your mind you’ll see the color representing the retail zoning code on the city zoning map.

Whether your submarket is filled with hip new acronames or traditional neighborhood appellations, knowing your market is essential to being an effective commercial real estate broker.

Learn more in the Best Practices Library

Topics: Best Practices

Russ Duncan

Written by Russ Duncan

Russ is Apto's Director of Product Marketing and helps drive product direction through customer discovery, consulting, research and advocacy. Russ is a CRE tech industry veteran and has held several positions at Digital Map Products, including Product Manager, Customer Success Manager, & Solution Engineer. He's a serial observationalist interested in understanding the built and natural environments, systems of engagement and movement of information; and moreover how people use and interact with them.

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