Greenville Business Magazine 2010 July issue : Page 28
the changing landscape of Greenville REAL ESTATE N BY BRANDY WOODS SNOW | PHOTOGRAPHY BY NILL SILVER PHOTOGRAPHY ationwide, the real estate market has been battered. The housing bubble of the millen- nium long ago burst, the nation is in the real estate trenches, laden with record numbers of foreclosures and a forever-changed lending process. Here in Greenville, we’ve felt the ripples from this collapse, though the Upstate has fared tremendously better than neigh- bors. In fact, this June,Builder Magazine ranked the Greenville area in the top 20 healthiest housing markets in the U.S. In commercial real estate, the Upstate’s minimal speculative development in the office, industrial and retail sectors has created significantly fewer vacancies impacting the market, especially when compared with figures from Atlanta and Charlotte. While the resilience of our market hasn’t resulted in crisis, the shifted economy has driven thoughtful reflection and introspection of buyers and realty companies alike. Many have critically examined the past, gained clarity on the current situation and then used that knowledge to create a forward-looking plan capable of strengthening their business platform to facilitate the most future success. 28 GREENVILLEBUSINESSMAG.COM | JULY 2010
The Changing Landscape of Greenville Real Estate
Brandy Woods Snow
Nationwide, the real estate market has been battered. The housing bubble of the millennium long ago burst, the nation is in the real estate trenches, laden with record numbers of foreclosures and a forever-changed lending process. Here in Greenville, we’ve felt the ripples from this collapse, though the Upstate has fared tremendously better than neighbors. In fact, this June, Builder Magazine ranked the Greenville area in the top 20 healthiest housing markets in the U.S. In commercial real estate, the Upstate’s minimal speculative development in the office, industrial and retail sectors has created significantly fewer vacancies impacting the market, especially when compared with figures from Atlanta and Charlotte. While the resilience of our market hasn’t resulted in crisis, the shifted economy has driven thoughtful reflection and introspection of buyers and realty companies alike. Many have critically examined the past, gained clarity on the current situation and then used that knowledge to create a forward-looking plan capable of strengthening their business platform to facilitate the most future success.
It’s a buyer’s market, and buyers, now more than ever, are demanding more bang for their buck. They want education, enlightenment, consultation, lender assistance – you name it. Greenville’s real estate companies have responded, aligning themselves seamlessly with customer demand to provide the most comprehensive, value-added real estate package around.
These are some of the Upstate’s major real estate players and an in-depth look at the changes they’ve implemented into their business plan. Though each company has its own opinions on strategic alignments going forward, they all agree on one thing – they are going to move forward, stronger, smarter and more adequately prepared for whatever the future holds. The real estate landscape in Greenville is definitely feeling the winds of change, and it promises to be a breath of fresh air for anyone looking to relocate to our area.
To Affiliate or To Not Affiliate? That is the Question...
With RE/MAX more than 15 years, in February Jim Fritzsche decided to start his own company, WOW Upstate Realty.
In 2009, his RE/MAX Foothills franchise was number one in sales volume in S.C., but because of the market turn, Fritzsche began to see once top-selling agents struggling to pay franchise fees and even leaving because of the burden. Though he enjoyed the franchise, he was unsure of its sustainability in the changing Greenville market.
Fritzsche wanted to create an innovative way of selling Greenville real estate. “I wanted to instill a positive and up-lifting spirit in everyone connected with the company,” says Fritzsche. “WOW is a multi-faceted catchphrase alluding to the excitement and magnitude of our properties, our agents and the city itself.”
WOW invests its marketing funds directly into the Greenville market and focuses on selling the city, properties, and quality of living as a complete package. They’ve even secured a “WOW” location at the Hyatt on Main Street, a space Fritzsche feels embodies the excitement and spirit of downtown. “We display prime Greenville properties on a big screen in our office that draws numerous walk-ins. It’s a terrific lead generation tool.”
“We think Greenville is a ‘WOW’ place to live, and we’re bringing that excitement to the world. We’re participating in a variety of cross-branding activities, making local businesses aware of our recruitment efforts in a collaborative vision to sell Greenville internationally.”
Since March, Fritzsche has seen a 38 percent increase in agent income and has added five agents. “I can see growth happening before my eyes. With a record amount of properties listed now, we are positioning ourselves to capture the Greenville market by demonstrating the ‘WOW’ factor.”
But what about those who choose to affiliate with a national franchise? Milton Shockley was the first RE/MAX established in Greenville and the only one remaining today. He says that his business concept hasn’t changed since Fritzsche’s departure, and he credits the franchise’s educational and marketing tools and the company’s synergy combined with his team’s experience in remaining successful.
“I’ve been in the real estate business for 38 years, and I’ve seen firsthand the economic ups and downs. Our 63 agents are seasoned industry experts with an average 13 years experience each, and four are ranked in the top 10 agents in the state,” says Shockley. “I believe the depth of training and the RE/MAX name recognition give us an advantage.”
Agents have access to a host of training resources through RE/MAX University, including an on-demand collection of video-based training; programming on foreclosures, short sales and distressed properties; and more than 30 designation courses. Through the Design Center, agents can access professionally designed print and multimedia marketing templates that can be fully customized and distributed in addition to the $54 million national marketing campaign budget. On Mainstreet, RE/MAX’s members-only extranet, agents can send/receive referrals and interact with other associates worldwide.
“RE/MAX offers proprietary technology and insight into real estate trends as a solid platform on which to successfully build our local business.”
Increasing Local Presence
When Tommy Stevenson joined the state’s first Keller Williams (KW) as Team Leader at its Greenville/Airport Road location in 2006, he had no idea how quickly the company’s presence would expand into the Upstate. But expand they did, eventually adding offices in Greer, Mauldin and Spartanburg. When the market began to shift in 2008, KW began to thrive, actively seeking further opportunities for expansion into the Anderson and Powdersville/Easley areas. In 2009, they merged with two local real estate groups, Barnes and Tripp Real Estate and Terri’s Team Realty, bringing in 16 and 53 agents, respectively. Cindy Fox Miller of Barnes and Tripp Real Estate and Terri Anderson of Terri’s Team came in as part-owners to form Keller Williams Western Upstate. The merger established four distinct KW ownership groups: Greenville with 141 agents; Greenville Central with 95; Spartanburg with 95; and Western Upstate with 86.
“We looked to merge with seasoned independent agents who had already realized great success on their own accord. They joined with Keller Williams because it was an excellent opportunity to align with a recognized franchise that offers the best training in the industry and believes agents are our biggest asset. If they succeed, we all succeed,” says Stevenson.
He credits the agency’s focus on core training and the company culture as key reasons why expansions were needed and wanted. Stevenson believes that adequate training teaches agents how to generate leads in this shifted market through database management, and more knowledge allows realtors to represent their clients at a high level. Consequently, the intense focus on training has helped KW increase sales and gain market share over the last two and a half years. A collaborative environment built on teamwork is also attractive to many agents but KW’s profit-sharing program is, perhaps, one of the best draws. Approximately 45 percent of profits go to agents with 55 percent to owners. The amount paid in by each agent per year is capped and once the threshold is met, agents retain 100 percent of the commission. Since its opening seven years ago, the KW Greenville office has profit shared $865,000 back to agents.
In an economy that had many hunkering down to ride out the storm, how was KW able to go ahead with expansions? Stevenson says that available liquid capital makes all the difference. “Keller Williams is a ‘no debt’ company. With no financial burdens, there is freedom to pursue new markets and access cutting-edge technology without incurring burden.” In fact, KW mandates every franchisee maintain at least three to four months’ expenses in a money market account at all times. Stevenson even raised the capital privately to open the office in Powdersville/Easley without borrowing a dime to finance the venture.
“I am thrilled with the Keller Williams model. Being a real estate instructor, I love the emphasis put on training and how agents are given the opportunity to get involved. My agents are happy with the merger. Agent retention and growth have always been my goals at Terri’s Team and now here at KW,” says Terri Anderson, Broker-In-Charge of KW Western Upstate and Owner of Fortune Academy Franchise.
“I wanted to be a part of KW to take Cindy Fox Miller and Associates to the next level and offer the best training to our agents. The new business model has already proven successful in less than seven months!” says Miller.
So far in 2010, KW Greenville Airport Rd office is up 32 percent in sales and 52 percent in profits as compared to 2009. Stevenson is optimistic for Greenville’s real estate future. “Greenville’s remained in the top ten places to live in the country and recently announced the arrival of major corporations to the Upstate, undoubtedly drawing in other new business. As more people move in, there will be an increase in appreciation of our real estate.”
“The fact that KW in the Upstate has grown from 12 agents in 2003 to over 400 today speaks volumes about the power of our systems, training and culture,” says Dan Hamilton, Founding Partner and Operating Principal, KW Greenville-Upstate. “Our success is directly attributed to the quality of the agents with whom we’re in business.”
Staying Ahead of the Curve
Coldwell Banker Caine (CBC) has a history of pushing the envelope, staying ahead of the curve in real estate trends. It’s something that started with R.M. Caine, who founded Caine Co. in 1933 and was exemplified by Frank Halter who brought conceptualization to a new level in Greenville, introducing strip stores, mixed-use developments and building McAlister Square, the first enclosed mall in South Carolina. Needless to say, Halter’s innovations became staples in the Greenville landscape, and now his son, Brad Halter, demonstrates a knack for that same forward-looking vision. When the market began to cycle downwards, Halter realized in Q4 2007 that their current business model wasn’t sustainable, and they embarked on a proactive effort to secure market position.
“We realized that the future of real estate called for smaller, fully-equipped facilities offering convenience to both clients and sales associates,” says Halter. “Our agents had to interrupt their day to keep returning to the office to do business. With the advent of today’s newest technologies, we could eliminate this burden.”
CBC closed 30,000 sq. ft. of office space and began consolidation in anticipation of rolling out their new strategy. The goal? To create a company where representatives across the Upstate could move seamlessly across locations and county lines without barriers, giving agents and clients the opportunity to easily access all available business tools at any location any time.
Halter and his team opened the Main Street Real Estate Gallery in downtown Greenville, a new business model that Halter believes will eventually become the industry norm. The space features a ‘technology bar’ equipped with internet connections, extra computers and printer access. The meeting area upfront is outfitted with state-of-the-art presentation equipment where training can be custom-fitted for a small group or redesigned for a significantly larger number. Flat screen televisions on swivel poles in the front windows can be turned into the meeting room for demonstration purposes or redirected to attract passing pedestrians with a catalog of available properties. Many CBC agents have embraced the new model, which offers them complete flexibility, on demand support and increased compensation plans.
“The gallery offers agents and clients an ‘untethered’ experience, along with the convenience and full-range services demanded in our new economy,” says Halter. CBC plans to open future galleries in high-growth corridors of the Upstate, including a Butler Road location to be followed by others across the state.
The Main Street Gallery is also a forum through which CBC seeks to forge deep connections with the community. The walls display a pictorial history of CBC’s Upstate presence, as well as a showcase for local artistry. Facilities can be utilized for HOA meetings, economic development groups, and more. “We want to be an integral part of Greenville, fully connected to the people and relevant to the agents and buyers of the future.”
In the coming year, CBC will continue to focus on recruiting top-notch real estate talent. The Real Estate Gallery model will support these efforts by providing agents with easy access to support where and when they need it. The firm also remains committed to the community, acting as an integral part of the neighborhoods it serves. The new Galleries will be positioned in high growth, highly visible communities where CBC will continue to grow and solidify relationships in the area.
Retaining Good People Keeps the Business Successful
For C. Dan Joyner Prudential, the old saying “if it ain’t broke, don’t fix it” rings true. They’ve found their formula for success and though progress has required minor alterations in marketing logistics, their core values and business model have remained constant and profitable.
“The key to being successful in both good times and bad is to have good people on staff and a strong company that carries them throughout their career,” says Joyner. “There is no substitute for these two ingredients.” The company has continued to recruit, retain, train and support agents throughout the troubled economy.
Joyner has maintained much of his traditional advertising plan, including producing the Big Blue Book of Dreams, which has proven a valuable resource in obtaining listings, recruiting new agents and gaining market share through its distribution. The company has revamped its website during the past year in response to the staggering statistics that nearly 82% of people are looking online for homes compared to only 8 percent in the previous decade.
Joyner attributes his success to developing agents’ leadership potential in a collaborative environment and with resources provided by the Prudential franchise. “We constantly evaluate and determine programs that best serve the company’s mission, discontinuing and implementing new programs if necessary,” says Joyner. “Agents should enjoy working here, and clients should enjoy doing business with us.”
Agents are encouraged to attended several educational courses throughout the year to gain insight into latest real estate trends. Likewise, Joyner utilizes the Prudential corporation and his position in the National Association of Realtors to stay abreast of the business.
Joyner’s business model has paid off. Bringing in $1 billion three years ago, they maintained viability throughout the recession, reporting more than $500 million each subsequent year and $622 million in 2009. They are on pace to finish even better in 2010, already $50 million ahead of last year’s figures in the same time period.
“Fortune Magazine recently named Greenville as the fourth best location in the U.S. to retire and that, combined with incoming industries and first-time home buyers, will keep the Greenville real estate market solid. Historically, the housing sector has always been able to pull us out of any economic slump, and I believe we shall see this pattern repeat,” says Joyner.
Expanding the Network of Commercial Service Offerings
In the current economy, large companies are examining their balance sheets, especially real estate holdings which comprise a significant portion, and re-evaluating their needs. According to Steve Smith, Executive Vice President at The Furman Co., they have positioned themselves to succeed in the market by formally affiliating with CB Richard Ellis Group.
Smith says the decision was based on CBRE’s international reputation and host of value-added services. “CBRE is truly a global company with offices all over the world and a considerable amount of clients that are also located in our area. They offered a comprehensive platform to bring overseas areas directly to our clients.” In fact, CBRE is the number one commercial real estate brand in the world in both volume and revenue and does business with 88 percent of Fortune 100 companies.
“Clients are demanding more value-added services than ever before, and our alliance with CBRE allows us to be their one-stop-shop,” says Smith. Through the new affiliation, Furman Co. has expanded services to include project management, global corporate services, valuation, consulting, financing and more while offering clients a single point of contact from start to finish for the most convenient transaction possible.
“We’re now in a much better position to move forward with more resources and a greater market share,” says Smith. “There are currently 15 to 20 transactions in process as a direct result of this alliance, and we expect these to bear fruit by Q4 2010.” Furman Co.’s commercial property management team, which also allied with CBRE, has experienced positive change, picking up an additional three million sq. ft. of commercial space since the affiliation.
“We see great things in the future. CBRE has a considerable presence and market share in Atlanta and Charlotte, and we believe this bodes well for continued development of the I-85 corridor.” GBM
The Current Market
According to the data provided by the Greater Greenville Association of REALTORS ® Multiple Listing Service, at the end of April 2010 though buyer activity declined slightly, closed sales were up 25.6 percent over the same time period last year, at 711 units. For those in the buyer’s market, 1,779 new listings entered the market with 8,011 active listings available at month’s end, up 5.7 percent over last year. Median sale prices rose to $139,450, up 8.9 percent since 2009. The percentage of original list price received at sale was consistent with 2009 figures, rising only 0.5 percent with sellers getting over 91 percent of their original asking price.
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