ULI Fall Conference – October 2015 – San Francisco, CA

Brian Chesky—cofounder of AirBnB

34 years old, unemployed artist/designer 7 years ago, living with mom and dad. Told him you need to start paying rent—find a job that has health insurance. Brainstormed with friend in SF-upcoming conference, rented out their room with 3 air mattresses—hence the name.

Aha moment—when put in a challenging environment, see if you can survive, helps you realize your potential—need to be deeply passionate about your work. China has lots of potential for their business—1/2 business today is France and England. Last week had over 1 million guests in airbnb’s around the world.

Charles Kenny—today 10% of the planet lives on less than $1.25/day. There has been tremendous economic growth over the past 20 years due to global output.

Survey—more and more people are saying they are happy with their lifestyle.

Global medium income is $3,650.00, top 10% is $34,000.

Rest of the world is getting richer, great news for U.S. in that developing countries are investing in us and vice versa. Carbon dioxide output is increasing—China is largest culprit. There are still billions of people living lives of deprivation worldwide. There are reasons for hope however.

Jack Uldrich, Futurist

AHA—awareness, humility, action

Trends transforming the world:

  • Wearable technology-Fitbit-Oculus-Facebook bought for $2 billion—shop on line looking at a Nordstrom’s pocketbook for example from all angles and make a decision to purchase right then.
  • 3D Printing—GE printed all components for a jet engine recently. 2017 will have other airplane parts. China is building homes with 3D.
  • Advances in Nano technology—self healing materials like concrete, passive radiant cooling—reducing energy consumption.
  • Robotics revolution-drones and self-driving cars
  • The Internet of things—adding so much new technology—opportunities for smart buildings-10,000 sensors in Paris building—reduced energy consumption by 85%.
  • Gene sequence technology—need to prepare to live to 110-120.
  • Artificial intelligence—computer processing power.
  • Data storage—Amazon and grocery delivery business. Their end goal is that you can get anything you want from them. Have filed a patent for predictive shipping.

Humility—what color is the yield sign—used to be black/yellow—now is red/white, point is that taxis used to be yellow—now UBER-has a $50 billion valuation and all you need is access to an automobile. WeWork has a $10 billion valuation.

Action-take a week to think about the future—read and reflect

Trends—net zero energy buildings—Walgreens, –organic farms, online education, and Nano degrees.

Jack can be followed on Google Plus, recommended reading The Economist—4 times/year publish here is what is coming.

How many bullets can the economy dodge?—Brad DeLong, Ph.D. from Berkeley

Prime age employment rate is 25-54, only 77% employed. Fall off in employment is one half of the baby boom generation. Hope is economy grows and brings them back into employment.

U.S. real long rates—decade ago expected long term rates of 3.75%, Fed believes in secular stagnation, Fed Funds down to 3.5%, will have permanently low interest rates for a long time.

  • Forces for higher inequality still on the march—political counter measures are anemic, large concentration of income and wealth at the top. If income is $121k/year that is top 10% in U.S. Income inequality has been rising—our customer have more free cash flow available—what this means for recreational real estate: Good cycle for us, top has lots more income than we thought and feel relatively flush, have $ to spend.
  • We spend 15% of GDP on food. Technology is a leisure time sink, not a money sink. Rising inequality trend is likely to continue. Valuations would have been bid sky high by historically low interest rates, but we are at the end of a 33 year bull run for bonds—interest rates will not fall any further.
  • Question about how to address inequality?—lots of people who should be going to college are not because they are concerned about student debt. If you make it rich, you should pay some of it back to your university.
  • Drug companies have too much power/control over generic brands.
  • NIMBYS are a powerful restriction on growth.
  • Proposed free public education and rents on intellectual property.

Content Marketing—Toni Alexander—InterCommunications

What has not changed is the need for overarching strategy and storytelling. Content Marketing should be authentic, relevant, intriguing, timely.

Content is a product, develops awareness and sells the idea, establishes credibility/authenticity, resonates with the younger demographic, encourages action.

 How does CM work for real estate? Compelling strategy for the brand, unique value proposition, build awareness, comprehensive story that will resonate with your audience.

Results of good real estate content marketing:

  • Allows prospects to learn before they buy,
  • Gives you a list of prospects that want to hear from you and
  • Can track the results of your investment $ and refine your communications.
  • It is content that can work over time.
  • Case study—Potomac Shores—30 miles south of D.C.—almost 300 sales in 2 years at an average price of $600k.
  • Case Study—Four Seasons Private Residences—very high end in Hawaii
  • Emotional pitch,
  • Cultural/creative—brought in a design expert—designer for Elton John and Jennifer Lopez.
  • Rational/risk mitigating—video and high gloss brochure
  • Intellectual—provide brokers with IPads
  • Results—40% reserved before groundbreaking—61 units total, penthouse sold for $50 million. Strategic partners reinforce credibility.

Not your grandfather’s country club—

  • Adam’s Rib Ranch, (Colorado)—rebranded to Frost Creek—Fred Kummer started Adam’s Mark Hotel—lost his major investment in this property—new owners built 7 cabins btw 2500 and 2800 square feet with 4 bedroom/ 4 baths for members and guests.
  • Weiskopf golf—mountain bikes for members to use, pickle board is popular, wants to be year round club, provide snowshoes for each cabin, jeep for members use, initiation is $15-$20k, annual dues of $5k-$7k.

Tom Benniston—Club Corp.—Acquisition and Reinvention Strategy

Partnered with IA to determine what next generation club would look like. Developed pricing strategy and value proposition—anytime lounges—members come in to relax—like an upscale Starbucks. No more white tablecloth, making them as family friendly as possible with media rooms, outdoor dining and lifestyle features—touchdown rooms—office for day/hour for members. Spending $1to $4 million reinvesting in their clubs.

  • ONE concept—member pays $25-$65/month-gives them a discount for food and non-alcoholic beverages at their home club-members are using more and bringing guests. Simplified process for members to use other clubs—have 27 in Dallas. Other benefits include golf at Firestone, etc.
  • Las Colinas CC-built in 1963—Irving, Texas. Spent $2mil on outdoor space with TV’s, fire pits, interior modernized and more dining opportunities.
  • Morgan Run-Rancho Santa Fe—outdoor dining, motion studio, baby sitting services, reinventing practice facilities—better turf and good music!  Started reinvesting in 2007, $60 million in various clubs—results include more members, more revenue, better EBITA—unlevered cash on cash of 15-20%.
  • Bay Club has 24 properties in California—mainly fitness centers, country clubs, and swim/tennis. Started as Fitness/Athletic clubs-very price sensitive. Fitness platform is their base—maybe 5000 members-ages 30-55, modern mom, creating great social networks. Cost from $150/month all way to $25k initiation for exclusive country clubs.

New Ways to Deliver Successful Master Planned Communities

Westrock is the new Meade West Vaco. 3 communities around Charleston—East Edisto, Summer Corner and Springs Grove

Lifestyle is key—partnered with Clemson’s Master Gardner program, makes their community real, authentic and credible. Have flexible areas like pop up tents,, food trucks and farmer’s market. Making memories for families, cobranding with YMCA, repurpose the clubhouse—cooking kitchen—lots of events for stakeholders.

Harvest communities, (6 in Calif.)—common theme is food and edible landscaping, community gardens, rich programming and strong community partnerships. Master gardening programs, lifestyle director. Housing is secondary, all the other stuff is what is important. A lot of resources are already in place so no real need to spend lots of $-find partners as resources.

Note—go to Nexton website and Next Door—privately owned web platform.

Summer’s Corner—people are starved for human contact—wine and food events for stakeholders, Info center café—welcome center-capitalized on Charleston foodie reputation and brought in restaurateurs from there.

New ways to deliver product and segmentation:

Insist on product innovation, must relate to existing surrounding community. Roofs are large open spaces that are being utilized more for events, etc.

Seeing some townhome rentals as opposed to stack flats—2000 sf, getting density of 16-20/acre—looking at sf/acre in Calif. Today’s renters are tomorrow’s home buyers.

Emerging Trends 2016 report identified Charlotte as a market to watch—reflects desires of millennials and other demographic groups to gravitate to 18 hour cities for job opportunities, urban lifestyle and amenities!!!

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