Chicagoland provides a diverse range of housing options that can meet the needs of most consumers. Downtown condominiums, spacious single-family homes out in the neighborhoods and town home options are all available for discerning buyers. Strong demand and a low inventory of existing homes are contributing to a wave of innovative new construction projects going up throughout the Chicagoland area.
For a project to be a success, builders need to be able to reach the homebuyers they’re targeting, regardless of location or price point.
Every development takes on a life of its own through the planning and construction phases. The builder starts with a clear vision of what the project will entail, with an eye to the people who will ultimately be looking to buy the new homes. In a competitive market, that can often prove difficult, so showcasing what you have to offer requires a smart strategy and excellent networking.
“The biggest challenge that we face is trying to make people understand the benefits of purchasing a new construction home,” says Brian Murphy, area vice president for K. Hovnanian Homes. “We are constantly competing against resale in the market. Sometimes potential buyers will see a more attractive price point for resale, but don’t take all the benefits of a new construction home into consideration. Our marketing strategy is designed to focus on those benefits.”
K. Hovnanian is currently in the close-up phase of Sauganash Glen, its development of single-family homes on the city’s northwest side, with just four units still open. K. Hovnanian is also on course to open six or seven new developments in the next year in places as far north as Libertyville and ranging from Plano to Plainfield and Yorkville.
K. Hovnanian works closely with brokers to determine how to best market to potential clients, particularly in focus groups that enable the company to survey brokers directly about what people want in homes. This relationship with the broker community is essential to their success.
“We want to ensure that the broker community feels like they’re in good hands,” Murphy says. “Communication is so important. We have the same interests in mind and the same ultimate end goal: to sell a home.”
Greg Heinrich, marketing manager for K. Hovnanian, provides valuable support during this process.
“We sit down with them and figure out what’s important to their clients in the area and where they see the trends, he says. “That helps me wrap my head around what employment corridors and different areas people are coming from, so it helps me target people better.”
Compass Development, which is the new construction sales and marketing division for Compass, stays engaged with its development projects from inception to sell-out. “When a developer engages with Compass Development on a project, we are there from the first meetings until the end of the sales cycle and provide market research, planning and design services, marketing strategy and highly tailored sales teams to a project,” says Heather Gustafson, managing director of new development at Compass.
Gustafson says her company has taken on several high-profile developments throughout the city since she joined this May. Those projects include the infill project 530 West Dickens near Oz Park with Ranquist Development Group, as well as Hayden in the West Loop and Menomonee Row in Lincoln Park with Sulo Development.
“Smaller infill projects that can commence construction immediately without a certain number of pre-sales is very compelling for buyers,” Gustafson says. “In this case, the developer can often begin construction right away and provide a more accurate closing date expectations with buyers.”
@properties is currently working on a variety of projects throughout the area that range from smaller infill developments to higher-end housing.
“We have an opportunity today — given the technology that’s available — to develop a rich narrative around a lot of different components of a development,” says Peter Olesker, executive vice president of developer services and corporate communications.
Some developments that @properties is marketing right now feature the work of notable interior designers who offer distinct visuals that appeal to a wide variety of buyers.
“The value they bring to a project is demonstrated in high-quality renderings of unit interiors and common areas, in models or vignettes, in selections displays within the sales center, in video interviews with the designer, in live Q & A events featuring the designer, in news articles, social posts and more.” Building a well-rounded portfolio of materials and opportunities makes buying a new construction home a lifestyle experience.
“The sum of these efforts creates a story that makes the value tangible, and then word-of-mouth occurs as brokers and buyers begin to talk about it on their own,” Olesker says. “You can do the same thing around amenities, finishes, architecture, location and more. It is absolutely essential for developers to include high-quality renderings of amenity areas as part of any pre-construction marketing package. Homebuyers know they’re paying for these amenities, and they want reassurance that they’ll be getting quality, thoughtfully designed spaces.”
Attracting potential clients often takes a great deal of creativity and a willingness to try multiple approaches before hitting on a formula that works. K. Hovnanian uses several strategies to reach potential buyers, but remains conscious that there are differences in how to approach clients from Chicago as opposed to those from the suburbs. Their marketing efforts include email blasts, pages on Facebook and other social media platforms, and geo-fencing and geo-targeting to draw in smartphone users. The company also uses more traditional methods such as newspaper advertisements and signage, along with advertising on sites like Realtor.com and Zillow. Providing opportunities for potential buyers to meet homeowners in the community has been especially fruitful.
“We have tried and had success with a number of different social gatherings, including community events, home tours, wine-and-cheese nights and more,” Murphy says. “If we get our homeowners involved, they can tell the story of why they are so happy with their community. By choosing a new home, you are getting the opportunity to pick your neighbors. When buyers have a positive experience, they share that with their coworkers, family and friends.”
At @properties, a marketing group consisting of some 25 people works to take each project individually and create a brand around it, then develop a marketing program around that brand. The marketing group creates logos, project identities and marketing materials to reach multiple audiences, including brokers and individual buyers.
The marketing plans for @properties developments are under constant evaluation to ensure they are working at optimal levels. The goal is to bring marketing in under budget while retaining the important elements that bring in clients. Their strategy is also now focused more on events to attract potential buyers.
“We’re turning to experiential events to bring to life the key amenities in a development, even before a building is built,” Olesker says. “At 1000M, for example, we’ve done a series of lifestyle events that highlight some of the more unique amenities in the building, including: a mixology event to highlight the building’s private bar; a massage and meditation event to highlight the spa and meditation studio; and a private concert to highlight 1000M’s music conservatory. These are small, intimate events that give buyers a sense of the lifestyle that awaits them.”
“We believe the success of a development from a marketing standpoint lies in creating a strong and unique project brand and then tailoring a marketing program based on a variety of factors,” he says. “These are things like price point, location and the target audience,” adds @properties co-founder Mike Golden.
Understanding a project’s audience and who the buyers are going to be begins with becoming deeply familiar with the surrounding neighborhood and all of its nuances. Compass works to tailor each project to that audience and takes a hyperlocal approach to marketing.
“A project in Midtown Manhattan is going to obviously look and vibe and feel different than a project in Logan Square in Chicago,” says Gustafson, who grew up just outside of Chicago. “We really try to get a keen understanding of the target audience, work with the creative agency, if there is one involved, to create a brand and identity that caters to who the audience is. Having a keen understanding of the nuances of a neighborhood is important to the success of a project.”
As part of their sales and marketing efforts, Compass introduces local brokers to new projects through a pre-launch campaign designed to help generate early interest. Pre-launch events, adding inventory to the Private Network and directly contacting the brokerage community have proven effective in getting Realtors interested in a new project even before it officially hits the market.
“It allows our broker partners, the Realtors in our region, to preview a development, determine whether it’s a good fit for their clients and then share the project with their client,” Gustafson says. “This is a win for the project, our developer clients, local Realtors and their clients.”