Inside Third & Bond: Week 118

This week the bloggers from Hudson Companies confront the reality of the sales market.

Last October, we dipped our toes into marketing and sales for Third + Bond. The catalyst for opening sales was the unveiling of the Pratt-furnished model residences. We got great press for the Pratt models and we wanted to leverage it to get the news out to potential buyers.

That part worked well. Really well. Our brokers at Corcoran are still getting inquiries daily and many of them cite the various media outlets that reported on the Pratt collaboration. (Thanks Apartment Therapy and New Tang Dynasty TV!)

The part that didn’t work so well was getting buyers to sign on the dotted line…

…Unlike the last five to ten years, the days when buyers sign a contract based on a floor plan are definitely over. We knew that going into our October Pratt marketing launch but we hoped that with the models completed and multiple units mostly built out, buyers would be ready.

We were wrong. Buyers want more than the security some beautifully outfitted models provide. They want a lifejacket, a lifeboat, and a bevy of strong Baywatch swimmers treading water next to the lifeboat. Buyers have seen the skeletal residential buildings around town and they’ve heard the anxiety-laced talk of pre-sale requirements. To be comfortable with signing for a condo they love, they want a project at or very near completion. They want to look at it from the sidewalk and see a finished building. Anything that looks construction-y suggests the risk that it will get stalled.

Buyers also want a sense of security that closings are imminent. They don’t want to be waiting around with their deposit tied up and their unit spit polished for move-in. Here you can see a bit of a chicken and egg problem.

Our evolving strategy: save our advertising dollars for when Third + Bond is less construction-y, then cannonball into the market. This is what we’ve been counting on since November of last year. We pulled out of advertising everywhere but Corcoran’s website and www.thirdandbond.com in part because no one’s looking for a new home November to January but then stayed out because of the feedback our brokers got from buyers: I like it but call me when it’s finished.

We’ve experienced this reaction at other projects as well. At Riverwalk Court on Roosevelt Island, sales were sluggish during construction. Once the lobby, hallways, and publics were complete and in move-in condition, our sales activity took off.

With a first TCO at Third + Bond anticipated in April, we’re readying our marketing dollars for a late March push. Happily, our construction completion coincides with the ramping up of the spring sales market. Attitudes are always better in the springtime—birds tweeting, baby lambs, all that stuff.

Despite having pulled back on marketing and despite the construction-y look of the site, there have been some hard-nosed buyers. The studios are popular with the investment-seeking crowd and we’ve signed a contract on one of those. We’ve also turned down some low-ball offers. Our first contract though was with a really great couple of whom many things can be said but not that they scare easily… you’ll get that joke next week.

Inside Third & Bond: Weeks 1-117 [Brownstoner]
Our legal fine print: The complete offering terms are in an Offering Plan available from Sponsor. File No. CD080490. Sponsor: Hudson Third LLC, 826 Broadway, New York, NY 10003.