Barry Sternlicht on Branding and Social Media

by Joe Stampone on January 8, 2012

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What does it tell you when one of the most accomplished real estate finance professional in the world sits on a real estate finance panel and talks about branding and social media?

At NYU Schack’s 44th annual Capital Markets Conference, Barry Sternlicht did just that. Take some time out of your busy day to watch the video below (the first 14 minutes is all about branding).

Branding is an incredibly important aspect of the real estate business, and no one does it better than Barry. However, he distinguishes between the effectiveness of branding in the hotel, residential, and office space.  In his time with Starwood Hotels, Barry was able to take a Days Inn, convert it t a W, and change the entire customer base, effectively changing the asset pricing. You can’t renovate a hotel to the same brand and get that pop in rates.

In the residential space, owners such as Post Properties received premium rents because of the brand they created. People would pay more because their landscaping was the best and they were recognized as the most beautiful communities.

A recent WSJ article discusses AvalonBay’s new branding strategy with its split into three distinct brands, the ”Avalon”, ”Eaves”, and ”AVA” each of which target specific clientele. However, experts believe this will be a challenge for AvalonBay.

They believe renters are concerned more about location and price. Post Properties Inc. is one exception: It is known for its upscale offerings, but largely in the Atlanta market. Related Cos. is a strong Big Apple brand. But, so far, a national apartment brand has yet to emerge.

Meanwhile, owners have not been successful with branding their office space. The brokerage community can recognize a good owner from a bad owner, but the property speaks more highly for itself. In certain asset classes, like office space, branding is an unexploited asset.

Hear it from Barry himself;

What are some good examples of branding in the real estate space?

 

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  • Adam Davis

    Barry is one of the most impressive speakers i’ve come across in any form and in particular real estate. His confidence in his ability and his ability to be contrarian are incredible. I strongly encourage people to watch this video as the guy is one of the best!

    When you think of branding no one does it better than Apple. A technology company I hear you say. There retail stores have changed the way we shop for computers. People have lined up across the globe to go the new opening of an Apple store. Sure a lot of this is driven by the technology brand but its the retail environment that they create that brings the shopper in. If this wasn’t the case then we would simply just have the computer shipped to our front door! While I live two blocks away from the UWS side I still can’t wait to go see the Grand Central store they have created. Its a great way of a leading company that looked at real estate and created an innovative way to capture customers!

  • http://www.astudentoftherealestategame.com/ Joe Stampone

    Adam, thanks for your comment. I could watch Barry speak all day long. 

    The Apple retail store is a great example of branding. Beyond great products, they’ve created an unforgettable experience. 

    Even the temporary store in Soho was incredible. I can’t imagine what the Soho store is going to look like after a year of renovation. It’s no surprise that people pay the Apple premium, because owning an Apple product says something about you.

    How do you think this model can be translated in the mutlifamily or office sector? What does living in a Related Company apartment say about you? How about a Vornado office building?

    Although these are recognized brands, I’m not sure there’s any sort of cohesive branding message.

    I think there’s a huge opportunity to exploit branding in the real estate space.

  • http://twitter.com/NYUSchack NYU Schack Institute

    If you could watch Barry speak all day; what topics would you like to see him discuss? 

  • http://www.astudentoftherealestategame.com/ Joe Stampone

    Where to start? Here’s a rough list off the top of my head:

    - Branding – both at the property level and company level
    - Entrepreneurship with a focus on small investor
    - Current state and outlook of the capital markets
    - Macroeconomic factors effecting real estate capital flows
    - Advice for young professionals just beginning their careers

  • Adam Davis

    Agreed I could watch Barry all day as well. Imagine a panel of Barry, Sam Zell and Bill Ackman. Now that is something you would pay big money for!

    Your points about discussing topics for the young entrepreneurs and professionals entering the early parts of there career is spot on. Too often talks are given at a 1,000 feet when really the people orbiting that space are quite rare.   

  • http://www.astudentoftherealestategame.com/ Joe Stampone

    No doubt about it. I recently went to NYU’s entrepreneurs panel, and while it was interesting, the members of the panel ran very small
    shops. I’d love to hear from the entrepreneurs who started on their own and built massive companies. These types of people have all sorts of insight to
    provide such as building out company infrastructure, how to grow, how to manage people
    etc.

  • http://twitter.com/confectioner Sean Gregg

    As a Stern grad and student st NYU SCPS would have enjoyed to see former  Stamford neighbor of Sternlicht  family speak.

  • http://www.astudentoftherealestategame.com/ Joe Stampone

    Thanks for stopping by Sean, Barry is one of the sharpest guys in the business.