When you think Buckhead, do you think boutique or bargain basement?
Saturday and again next Saturday, the Buckhead Coalition will run full-page color ads in the Wall Street Journal promoting all of Buckhead’s empty condominiums and vacant office space as being “historically affordable.”
But act now, the ads urge.
With more than 1,000 new luxury condos and 2 million square feet of newly constructed office space, now is the time to invest in Buckhead, an ad reads: “But hurry, opportunity doesn’t knock twice.”
It’s unusual for communities to advertise the affordability of their real estate on a national level, said Tim Calkins, a professor of marketing at Northwestern University’s Kellogg School of Management.
“Advertising price is always risky for a premium brand, but there’s little downside to this effort,” he said. “Buckhead is a community with a lot of history. I suspect they must believe people are not thinking about buying in Buckhead because they are worried about the expense. This is clearly an attempt to change that. The tougher question is whether it will drive a lot of incremental sales.”
There are bargains in Buckhead because of excess supply, said former Atlanta Mayor Sam Massell, president of the Buckhead Coalition, a nonprofit group of about 100 CEOs of major firms, including developers and bankers. “If you want to live, work or play in Buckhead, make an offer and we will work out a deal,” Massell said.
The coalition’s move comes as Buckhead struggles to deal with several years of overbuilding. Marquee projects like the massive Streets of Buckhead have been stalled because of banks’ reluctance to lend to retailers. And mega-builder Cousins Properties took a $39 million write-down earlier this month on its swanky Terminus 200 building as sales have faltered.
More significantly, the coalition may be trying to get ahead of future financial hurdles, said Tim Mescon, president of Columbus State University. Economic forecasters predict builders will refinance debt in the next 12 to 24 months, which will further erode Buckhead values. Because much of the building took place between 2005 and 2007 when construction prices were soaring, builders find themselves owing more than most of the properties can fetch.
“We haven’t seen the real price adjustment yet,” Mescon said. “Bargain buyers with massive cash are waiting for the real bottom to hit. The developers know this, the coalition knows this and what it sounds like is they are trying to get ahead of it.”
Massell was coy about the cost of running the ads — which were created free of charge by Atlanta-based Fitzgerald + CO — but said the price is well in the six figures. Newspapers’ ad rates often depend on numerous variables — the reach of the paper, for example. According to the Wall Street Journal’s Web site, a full-page, full-color ad in the U.S. edition may cost up to $277,000.
The Buckhead Coalition chose the Wall Street Journal because of its national and international reach, Massell said, and because it’s a business publication.
The ads feature Buckhead’s skyline against a backdrop of vibrant reddish-orange colors “that harken to the dawn of a new day,” said Matt Blackburn and Nik Bristow, who created the ads.
“It’s bright and bold and optimistic,” Bristow said. “The economy is supposedly on the upswing; they want to take advantage of that — to show Buckhead is being reborn on the forefront of that.”
