“Man on the Street” Interviews -- the Best Approach to Pre-Marketing Office Buildings

Background. In the late 1970’s Trammell Crow Company set up a downtown office building division within the Company. This group’s mission was to build large office buildings in downtown Dallas. From 1980 to 1986, the group built four office buildings within a four-block radius, each building ranging from 900 KSF to 1.2 MSF in size. None of the three partners – including myself -- had built office buildings on that scale before. Over that six-year period, we compressed 10+ years of learning into 6 years. Along the way – through trial and error – we learned some valuable lessons about what worked and what didn’t. Here’s one such lesson that still applies today and especially to owners with an ongoing building program concentrated in a submarket.

“Man on the Street” interviews and pre-marketing

It Starts with a Design Competition. High-rise structures are commercially risky due to long lead times. They also change skylines forever. As we saw a multi-building program emerging, we took both responsibilities seriously. Beginning with our 3rd building (about 950,000 SF), we hosted a design competition among 2 or 3 architects to win the right to design our next building. We gave them a small stipend and 3-4 weeks to come up with their concept including standard floor plan showing multi-tenant and single tenant corridor, an elevation, a 3D cardboard model (old school technology), and a couple of artist’s perspectives from different viewpoints. That’s standard fare these days.

Pre-marketing. The next step was to use our connections --- which were deep for Trammell Crow Company on our home court in Dallas --- to arrange interview sessions with prominent leaders (and potential tenants) to get their input on which design they liked and why, including their opinion on certain details and features in each design. These were heads of major law firms, accounting firms, insurance companies, utility companies, independent oil and gas companies, and out of state banks (the larger in-state banks had their own buildings). At least two, but usually all three of us partners would attend these meetings and pay close attention to what our guest was saying.

What we learned.

a. Business leaders liked being asked their opinion and having it systematically listened to ----though they had – for the most part – no background in design they were happy to offer their comments on esthetics, functionality, and operational fit with their own business.

b. Business leaders liked interacting directly with “partners” or “owners”. Versus a broker. We also found it important to study their business beforehand and acknowledge them personally as business leaders whose opinion was valued. Through this process, we were often successful in establishing a “peer” to “peer” relationship. This differentiated us and often influenced these leaders toward our project and toward us personally – i.e., we appeared in stark contrast to other landlords who (i) did not approach them early or allow “before the decision” input into building design or (ii) worse yet, delegated pre-marketing to brokers or junior staff who attempted to “sell” the owner’s decisions to date.

c. Sometimes we got adoptable suggestions. These leaders were not professional designers. However, occasionally, we did get a design insight that was worth pursuing. Note: we seldom felt compelled to explain why we did not adopt a suggestion. Everyone knew we were talking with several leaders and that it was unlikely everyone’s opinion would agree.

d. Pre-empting “commoditization”. By establishing a relationship with leaders of key businesses early on, we made it harder for others in their organization to judge our building purely on price (Occupancy Cost / SF). This paid off down the road when competing for a leasing decision in our submarket. Selectively, to increase the odds of a favorable outcome, we were sometimes able to offer to shift a portion of our legal, accounting, or insurance business to prospective tenants. We would not have had access to do this had we not formed relationships with executives with broader P&L responsibility during the pre-marketing stage.

Conclusions. As principals in a “to be constructed” office project, there is no more important responsibility than getting unfiltered feedback from the prospective occupants – especially considering all the pandemic-induced change confronting the use of office. Done right, this provides a unique opportunity to form relationships at the top with key tenants in the market and develop brand recognition for caring about the long-term usability of what’s being built.

If you are a landlord embarking on a long term, multi-building presence in a sub-market, by my experience, this pre-marketing approach is one of the pillars of setting yourself apart from your competitors and creating a premium brand.