Film producer/developer building $500 million spec residence in Bel Air

Film producer and speculative residential developer, Nile Niami, is pouring the concrete for a spec residential compound including a 74,000-square-foot trophy home and three smaller companion homes which he says will hit the market at $500 million.  The project will exceed 100,000 square feet, including a 5,000-square-foot master bedroom, four pools, a 30-car garage and a “Monaco-style casino.”

If the property sells for anything close to this amount, it might set a new world record as the world’s most expensive residence sold.  The priciest home sale to date was a $221 million London penthouse which changed hands in 2011.  Competitive properties include a $425 million estate in France’s Cote d’Azur, a $400 million penthouse in Monaco and a $365 million London residence.

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Have you met the HENRYs?


If not, let us introduce you. The HENRYs are High-Earners-Not-Yet-Rich households who represent an increasingly important consumer group with strong spending power today and the potential of becoming wealthy. Not defined by age or occupation, they are identified by income. HENRY’s represent a growing group of homebuyers who, in many cases, can afford high-end homes.

Defined as consumers with combined household incomes between $100,000 and $250,000, HENRYs come in all age groups (no, they are not all young). They are excellent prospects for luxury home purchases, beginning at the entry level of luxury and moving up. About 25 million U. S. households fall into this category. That’s about 20% of total households. More important, HENRYs make up about 90% of the affluent consumer market.

HENRYs

HENRY’s are also a key market segment for luxury Realtors. In almost any spending category, the affluent top 20 percent account for about 40 percent of total consumer spending, as measured by the Bureau of Labor Statistics. While this group may not be buyers and sellers of homes in the double digit millions, they are often buying in the top 10% of the market. And – they may get richer!

Here are a few characteristics of HENRYs which Unity Marketing has identified:

  • They appreciate a high level of service and want to work with pleasant people
  • They respond to stories. What stories are you telling about your listings?
  • They are executives and managers and they don’t leave their smarts at the office. They are careful buyers and their bragging rights come from making a good deal. So, think VALUE and remember that a good deal isn’t always lowest price. 
  • They buy premium products. Is your service premium or standard?

How do you find them? How about using one of your Institute for Luxury Home Marketing member benefits to acquire target lists of HENRYs in the geographic areas you serve. You can select by income, education level, family size and other criteria. Then, farm the list with a market update report, and other information rich materials. HENRYs represent great potential in the high-end market for SLREPs (Successful Luxury Real Estate Professionals)!


FAA releases new temporary regulations on drone photography


image from upload.wikimedia.org

Is your drone photography breaking the law?

Excited about the idea of using drone photography for your latest luxury listing? Choose your drone photographer carefully or you may be violating the Federal Aviation Administration’s latest rules and regulations and subjecting your photographer, yourself, and your seller to injunctions and stiff fines.

In order to legally use drones, or what the FAA calls “unmanned aircraft systems” for a commercial purpose--including real estate photography--new temporary FAA guidelines require that your photographer apply for and receive an exemption from the FAA to operate drones commercially. Final regulations are not yet in place, but proposed details can be reviewed in the Federal Register. To see if your photographer has an operating exemption under the newly released temporary guidelines, check the list of exemption holders on the FAA website. For more information about how to apply for an exemption, visit the FAA’s "Section 333" information page. New regulations are expected to be published later this year.


High-End Security Systems: Really, Really Safe

In luxury homes, security often goes beyond a simple alarm system (and sometimes beyond the bounds of imagination). For luxury real estate professionals, it’s important to be in touch with the particular security concerns of high-end clientele, and the most popular and effective luxury home security systems available. Also, be aware that it’s commonplace for sellers to ask real estate professionals and prospective buyers to sign non-disclosure agreements covering their safe room or bunker.

Home security systems favored by high-income homeowners all share the same central goal: fast and secure isolation from potential intruders.

CreativeHomeEngineering

  • Safe rooms – The most popular luxury security option is the safe room, or panic room, which is typically centrally located so that it can be quickly and easily accessed in an emergency. There are dozens of companies that specialize in designing and installing bulletproof, entry-resistant rooms, which vary in size and comfort. To add an extra layer of security, many luxury homeowners ask that their safe room’s entrance be disguised. Companies like Creative Home Engineering specialize in customized and secure secret passageways, hiding safe room entrances behind bookshelves, mirrors, or even movable staircases. These security features could also be used to securely store your wealthy clientele’s art, valuables or guns.
  • Bunkers – Another less common security option is the bunker. Bunkers are hugely expensive and meant to withstand not only home invasion, but also natural disasters and even bombs. Bunkers are (of course) underground and typically designed to allow people to survive there for weeks or months. Check out this Forbes article about the trend of millionaire’s in-home bunkers.

There are a plethora of security solutions for luxury homeowners, but the best of today’s high-end security companies are offering all-in-one smart home technology that allows the homeowner to control things like climate, energy consumption, lighting, entertainment, and security, remotely and with ease.


Losing buyers due to poor headlines?


NowhereCreating a compelling headline requires more thought than using the street address as your property marketing headline. In fact, using the street address as the headline is one of the biggest mistakes real estate professionals make. It’s also ineffective. Unless the address is the most important thing about the home (1600 Pennsylvania Ave. for instance), use the street address elsewhere in your copy and begin to tell the home’s unique story in your headline. For instance, which headline is more likely to generate interest?

“7432 Johnson Drive”
or
“Just featured in Architectural Digest...yet only $750,000.”

Will a reader be more likely to want to know more about,

“1030 Edgewood”
or
“Small house, small price, BIG yard!”

Don’t be afraid of long headlines or long copy. If it’s good copy, it will be more effective than short copy. Yes, really. Advertising research backs this up, especially if you are writing about a product – like a property listing - that not everyone is familiar with. We’ve been taught in real estate to keep copy short, when in fact, we’d be creating more effective marketing pieces if we’d work to tell a compelling story about the home with plenty of descriptive copy. Here’s a combination headline and sub-headline that illustrates these principles. 

Your offer to buy must come with this promise:

  • I will appreciate the sweeping lake views, 
  • I will open the master bedroom wall and sleep under the stars, 
  • I promise not to gloat too much over the $445,000 price reduction!

This is likely to be more effective at attracting a buyer than, “1657 Hill Crest Lane.”

As you write your copy, do break long copy into short paragraphs and use some bold paragraph headings to help tell the story and create visual interest. Also, be sure there is plenty of white space between the lines. You can even use long copy online, if you format it so that it is reader friendly. Obviously your MLS descriptions have to be short. But don’t use MLS blurbs elsewhere, instead use good selling copy.

You should be getting the idea. In summary, headlines should begin to tell the story of your listing and should create curiosity. One advertising text book says that your headline should capture the reader and make them want to read the subhead and the subhead should pull the reader in to read the body copy.

Think about it this way: every home has a story and it’s your job to tell it in a compelling way. The headline is how you grab the reader’s attention by sharing something important about your listing. And once you’ve captured attention, don’t be afraid to use enough copy to weave your home’s story. After all, stories sell.


Monaco’s royal heirs develop super luxe residences

Monaco Royals Andrea and Pierre Casiraghi, heirs to Monaco’s throne and grandsons of Grace Kelly, have introduced one of the principality’s most expensive and exclusive condominium apartment developments as part of a plan to add new residences to Monaco’s scarce residential supply and reinforce Monaco as a destination for Ultra High Net Worth Individuals (UHNWI).

A conversion of the abandoned headquarters of the former Banca Commericiale Italiana, the project is in the desirable trophy neighborhood next to Monaco’s Casino Square. Named La Petite Afrique, the building is slated for completion in Winter of 2016 and is a joint project of the Casiraghi’s Fine Properties Monte Carlo and construction firm Pizzarotti Group.

Quietly being marketed by word of mouth only – which highlights how exclusive it is -- the building redo is the work of “starchitecht” Isay Weinfield. The two story penthouse is reported to have been sold already for about €200 million. Seven other residences of around 7,500 square feet each are also reported to be under contact. Prices for those apartments were believed to be in the €85,000 per square metre range (US$8,483 per square foot), or about US$72 million each. As of the end of March, only two units on the fifth floor are still available.

More details in this WealthX article.


A mini-movie for Valentine's Day

Romancing your listings is something we teach in our Institute for Luxury Home Marketing two-day training class. Other purveyors of luxury products and services strive to romance their products, too.

Since today is Valentine’s Day, we thought we’d share a marketing mini-movie with you, one that’s all about romance. Here is uber- jeweler Cartier’s latest mini-movie (actually, it is a composite of three mini-movies which you can also view individually):

(View video on YouTube)

In our opinion, Cartier knows how to tell an effective story that ties emotion and their jewelry together with a big red bow.

Happy Valentine’s Day!


Could what you “know” about millionaires be wrong?

The number of U.S. millionaires is at an all-time high. Research results indicate that there are 12 million U.S. households with a net worth of a million dollars or more. (Remember net worth is calculated by all assets minus all liabilities equals net worth.) In fact, the U.S. has twice as many millionaires as the next top 10 countries combined.

Real estate professionals who have taken our luxury home marketing training know that many common perceptions about these millionaires are often clouded by myths. Who are these very successful Americans and what do we know about them? Just for fun, test your millionaire savvy with this quick trivia quiz.

Are the following statements True or False?

  1. Most millionaires live in a home valued at less than $500,000 and drive a car which is at least two years old.
  2. The largest share of millionaires earn between $100,000 and $249,900 annually.
  3. There are as many millionaires created by inheritance as there are self-made.
  4. Most millionaires own luxury goods from brands like Rolex, Gucci, Prada, and Louis Vuitton.
  5. When it comes to shopping, the top two destinations for high net worth shoppers are the internet and discount department stores.

6. Which of these words best describe the average millionaire's spending habits?

  • Saver
  • Big Spender

Scroll down for the answers!

 

 

 

 

 

 

 

 

 

 

 

 

ANSWERS: Let’s see if you are millionaire savvy or have fallen prey to millionaire myths.

  1. True. The majority of millionaires do live in homes valued at less than $500,000 and the cars in their garages are at least two years old.
  2. True. Millionaires earn less than you might guess. The majority earn between $100,000 and just under $250,000.
  3. False. The vast majority of millionaires in the U.S. (and in the world) are self-made and their money comes from business ownership and employment-related income.
  4. False. Far from being conspicuous consumers, typical millionaires don’t purchase high-end brands such as Prada, Gucci, Rolex, and Louis Vuitton and may not even recognize these brands. Yes, really!
  5. True. The favored destinations for high net worth shoppers are the Internet and discount department stores. In fact, 68% of affluent households with an average of $250,000 in annual income shop at discount stores according to research done in 2014 by Unity Marketing.
  6. Saver.  The typical millionaire is generally frugal, saving 15% to 20% of his or her annual income each year.

If these government statistics and research findings documented by Unity Research and the American Affluence Research Center surprise you, find out more about the wealthy and how to reach those who are interested in luxury homes by joining us at one of our upcoming Institute for Luxury Home Marketing training classes, or register for our online class.


Is the 80/20 rule really true?

You’ve heard the statistic – 20% of Realtors do 80% of the business.

MLSIs this true or is it just another sales myth that’s bandied about in the real estate business? A recent blog post by Ted Jones, Chief Economist for Stewart Title reports on a study by the WAV Group that provides some insight to this question.

The research company surveyed about 150 Multiple Listing Services regarding listings and closed transactions for the first half of last year. The accompanying charts show the percentage of agents who had listings in that time period, as well as the percentage with closed transactions.

Certainly some people subscribe to the MLS for reasons other than listing or selling residential properties. This includes commercial Realtors that keep tabs on the residential market, appraisers, or others that use MLS data. However, the 39 percent who had no closings in the first half of 2014 and the 43 percent who had no listings is still remarkably high and indicates that about 40% of MLS subscribers are not listing and selling (for whatever reasons).

Add to this, the fact that another 50% only had from one to ten closings in a six month period, bringing to 89% the total of those who had from zero to ten closings in half a year and you can conclude that the remaining 11% of the agents are doing a high percentage of the business. It’s pretty much the same with listings. Only nine percent of MLS members had ten or more listings in the first half of 2014.

Our conclusion? If we are talking about numbers of transactions, the 80/20 rule may not be far off the mark in real estate.


Blockbuster penthouse sale breaks $100 million price barrier in NYC

One57_from_Columbus_Circle,_May_2014New York City residential property sales bounced as high as $88 million in the past several years, but as of late December 2014, the sale of a penthouse encompassing the 89th and 90th floors of the new One57 tower has closed for $100.5 million, setting a new record for the most expensive residence ever sold in New York City.

The buyers name remains a mystery since the purchase was made in the name of a limited liability company, P89-90, LLC. Of the apartments sold in the building to date, reports are that more than half are in the names of Trusts or LLCs for privacy’s sake. While the property sets a record for NYC, at least three other U.S. properties have sold for more than $100 million in the past year.

The nearly 11,000 square foot duplex unit boasts the longest south to north city views ever offered by a NYC condominium and includes outstanding views of Central Park and other landmarks. The distinctive blue building was designed by Atelier Christian de Poirtzamparc, the Pritzker-prize-winning French firm. The building sponsor is Extell Development Company.

One57 is among several high rises to break ground on “Billionaires’ Row,” where the tall new towers cast shadows over Central Park. A group led by investor Bill Ackman is reported to have paid at least $90 million for another duplex on the 75th and 76th floors of the building, but the sale has not yet been recorded.

NY Times: $100.4 Million Sale at One57