Last year I was selected to compete in a hypothetical real estate development competition. The participants were placed in teams of four and given 10 months to come up with a project that would be pitched to some of the most prominent names in real estate. At the pitch event, the three high-profile judges who scrutinized the plan from all angles. Imagine “Mr. Wonderful” from Shark Tank scrutinizing a real estate development. In fact, if one of the guys was bald, you wouldn’t be able to tell them apart. Despite how ruthless Mr. Wonderful was, he had to pick a winner, and that winner was my team. We are the champions!
Let’s start by understanding what this was all about. In our case, 10 months ago we were given a piece of dirt in the heart of Phoenix. Our task was to pretend as though we’ve gone through the entire life cycle of the asset. From due diligence, to design, to financing, to construction, to marketing and leasing, to stabilization, and ultimately to the disposition of the asset. We were provided a set of assumptions about the market and we went on our way. 10 months later we had 20 minutes to persuade the sharks that our proposed development was better than the rest.
In a nutshell, we succeeded because we did everything well and did nothing poorly. We gave them no reason to mark us down. It’s easier to lose points than it is to win points. I broke down the reason we won into a few key areas. These techniques are timeless and transferable to any kind of pitch or sales presentation.
Our goal was to persuade 3 judges that our development project was cool, desirable, parallels the community and city goals, and most importantly that it would make money. We knew our judges and their place in the real estate game. We knew what would be important to each one of them. We then catered our message to specifically touch on the areas where their focus would be.
Despite the level of intelligence and sophistication of the sharks, they like all people, are wooed by cool images and pictures. We gave it to them. We started our pitch by showing a movie with emotion-drawing music. The images plus the music left them intrigued and emotionally drawn to the project. They felt that way before we had even said a word! We also made our presentation full of images and graphics and very few words.
Sales 101. If you know your prospect will have an objection, overcome that objection before he/she even recognizes the objection. We were able to address the areas they would have concerns and provide a solution to those concerns before they had time to bring it up. When we were done with the presentation, they really had no objections because we had overcome them all during the pitch. I take that back, Mr. Wonderful had to complain about something. He thought our project would be too risky because he didn’t think we would be able to find a tenant for one of the key components of the project. Luckily, one of the other sharks respectfully disagreed with him because she knows of three groups interested in that product in that particular area. Score!
Just as a skilled author or movie producer preps his/her audience and then guides the audience through a magically fluid and orchestrated set of descriptions and events, we were able to describe the project in a fluid manner that corresponds to the way one would want to learn about a project. In our case we started by describing the community, it’s strengths, it’s shortcomings, and what the community is lacking. We then described the site and it’s strengths and weaknesses. We then described the end users and the solution we have provided them. Then we described the project from a macro level down to the more granular components of the project. Yes, this sounds like common sense, but a few of the groups lacked focus and a fluid presentation.
Just as a successful entrepreneur starts with a problem, followed by a thorough analysis of the people that face the problem, only then to design and create a product that creates a solution to the problem. If the entrepreneur creates a product and then tries to find a problem that the product will solve, he will most likely fail. The same goes for real estate developments. We understood our market, the needs of the users and the community. It was only after we understood the real problem we were to solve before we began designing the product itself. It was obvious some groups designed the product that they wanted, and subsequently tried to find a market for that product. That is why they failed.
One of my mentors, Gerald Clerx, is a master of winning pitches. His whole process boils down to one simple strategy. Bridge The Gap. In every pitch, the prospect is searching for a solution to take him to his desired reality from his current reality. In our case, the current reality was a valuable piece of dirt. The desired reality was a profitable, community-enhancing mixed-use development. We articulated clearly how we would take the judges to that desired reality.
This list is just a few of the techniques and tactics used to find success in pitching. Regardless of what we do in commercial real estate we will, at times, have to be persuasive to sell ourselves or our ideas. Start with these and you’ll be on the right path. If you’re involved in a pitch competition, give me a ring. I’d be happy to take a look at your project and provide you with my feedback and suggestions.