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Brokers Important : Presentation Counts in Overbuilt Office Market

April 06, 1986|EVELYN De WOLFE

In today's highly competitive market, an office building's image goes a long way in commanding higher rents, and the success of a project is often tied to marketing creativity and sensitivity, geared to a network of cooperative brokers and the clients they serve.

Robert Ortiz, a senior vice president of Cushman & Wakefield, believes that marketing information centers may be a key adjunct to image-building and leasing power.

"In most cases, buildings that are being leased are not yet completed, and the features outlined in a brochure are not sufficient to give the prospective tenant a true feeling for the finished product," Ortiz said.

Marketing centers that, ideally, overlook the site and provide the latest in multimedia techniques, allow developers, marketing consultants and brokers to spell out all the facts in a concise, visual and almost tactile presentation.

Slides, in the marketing of major office buildings, became popular in the early 1980s, according to Ortiz, though in the late 1960s, Arco Plaza may have set the tone for the more sophisticated marketing style now prevalent.

Should Be Cost Effective

"The cost of marketing centers is well justified providing they are realistically utilized," he said, "but the concept may not be economically feasible for some suburban buildings.

"If, for example, we're talking about a million-square-foot complex, and the ambiance of the center helps the developer in the pre-opening phase to get just 50 cents a foot more per year, that's $5 million over a 10-year period," said Ortiz, whose firm has leased about 3 million square feet of downtown office space in the last decade.

Christine Chatterton, a principal of Chatterton Jezek Partners, has been involved in the creation of numerous marketing information centers, whose costs ranged from $250,000 to $400,000.

"Costs, depending on the building, range from $100 to $150 per square foot," she said. This includes construction, design fees, furnishings and audio-visual installation within a space of 1,500 to 2,500 square feet.

'Sensitive to the Image'

"Just spending money in itself, does not guarantee a first-rate result," Chatterton said. "Creativity and merchandising sensitivity are the key elements for success. We try to be sensitive to the image of the developer, to the types of people who will occupy the building and to the building itself. And we rely on input from the other professionals involved with the project."

In downtown Los Angeles, office space has increased dramatically, both in terms of square footage and in options offered to tenants. In 1976, there were 12 million square feet of office space in the central financial district. By 1982, it had reached more than 17 million, and it is expected that there will be about 21 million square feet by the end of this year.

A proven, major strategy for successful leasing in today's downtown tenants' market is granting concessions, including everything from a year's free rent, or more, plus liberal improvement packages, noted N. Richard Lewis, president of Lewis & Associates, a Los Angeles-based advertising, public relations and marketing agency.

Also, more and more, there seems to be a higher demand for marketing professionals--the brokers, consultants and designers--to assist with the leasing process, both clients and owners.

Tenants Hiring Brokers

More tenants are reportedly hiring commercial brokers to locate property, to project lease value analyses and to resolve complex aspects of the leasing agreement. The rental rate is only a part of what the tenant must consider; he must be made aware of operating expenses and real estate taxes, cost escalation, janitorial services, after-hour air-conditioning costs, parking, rental adjustments, lease terms and options for lease renewal.

Reliance Development's Henry Lambert, who heads development of $225 million in properties in downtown Los Angeles and has another 11 projects completed, in the planning process or under construction across the nation, believes in courting the elite of downtown's brokers.

He frequently invites them to gourmet dinners at the Los Angeles Hilton Hotel's new Italian restaurant, Cardini's, to remind them of the charm and daring architecture of his 1000 Wilshire project.

Lambert, who also owns a chain of Pizza & Cheese stores, believes in the importance of flair and visual impact. "I don't want to see buildings like every other architectural box in town," he said. "The mood created within a building is important. It shouldn't just keep you out of the rain--it should make you keep coming back.

'People Buy Style'

"People buy style, and what we've done to bring back the Hilton, for instance, was to go over every inch of the hotel and to maximize its potential in grand style, with lots of pleasant surprises. Good marketing, with any project, means knowing how to build a better mousetrap."

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