A Guide for Creating and Preserving Affordable Artist Spaces
No project should start without a market analysis. While ideally done by a hired professional, any dedicated individual with common sense and an inquisitive mind can assemble the following:
Basic market information:
- Who is your target market?
- How big is the area that the people/businesses/major institutions that make up your market currently reside?
- How many potential buyers are in your market?
- How much do your buyers or renters expect to pay?
- What comparable projects are completed or underway?
- Where are the comparables and how does your value compare in price, location, and amenity?
- What percentage of the total available space does your project represent?
- How long should it take to sell or rent the units?
Useful sources for market information:
- SpaceFinder Mass
- Real estate brokers who specialize in space similar to your project
- Visits to open houses in similar projects
- Completed appraisals for similar projects – appraisals always list comparables, including price, size, location, and amenities
- Web-accessible demographic information by zip code
- Print advertising and classified ads in real estate sections of the paper and in arts magazines
- Town planners/economic development directors – they know what projects are in the pipeline
- Meeting with local arts organizations, individuals, friends, and colleagues to assess interest in new space
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Marketing the Project
All projects require at least some marketing (unless being done for yourself alone). The following is a list of typical marketing projects. Ordered from basic to more in-depth, how far down on the list you need to go depends on the size of the project and how much marketing is needed:
- Connect with colleagues through phone, email, conversations, etc.
- Prepare an accurate written description and rendering for early communication
- Post listings on web-sites
- Post free ads in local newspapers, playbills, etc.
- Create a brochure to give to buyer prospects
- Develop a website describing the project that can be updated easily and frequently.
- Present your project to local arts groups and civic organizations
- Make targeted marketing calls to larger tenants or collaborators, potentially setting up meetings to discuss your project
- Open houses once ready
- Building signage on your property
- Multiple Listing Service (MLS) listing
- Listing with a real estate agent
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Selling Units or Leasing Space
A group or developer is allowed to sell or lease units with or without a licensed real estate broker. Consider the following if selling:
WITHOUT a licensed agent:
- You will need to develop a good property description, as it will be taken seriously (and quoted back to you) by the people who buy or lease studios or live/work units.
- You will need to respond to buyers. A seller (which you will be) provides a service to the buyer...and buyers know it, even when they are joining an artists group or the space is being offered below market price.
- You will need to work with an attorney to develop purchase agreements, negotiate deposit fees, and close the sale of units. Assistance with these tasks is provided by brokers as part of their fee.
- You will have to arrange for and pay for access to MLS listings (see below).
WITH a licensed agent:
- A broker will list, update, and handle inquires for your available spaces on the MLS, allowing the general public to browse the listings for free on the web. Most condominiums, including lofts, are listed on this service.
- You will be required to pay a commission, typically five to six percent of the selling price, split amongst the agents involved.
- You will need to sign a listing agreement which is not immediately terminable should you change your mind.
- You will need to communicate changes, requirements, and special features through your broker and all the cooperating agents who bring buyers to your broker.
- If your group is interviewing buyers (and most are), you may have a minor conflict with the broker (who likes to control the sale).
- You will still pay, one way or the other, for most marketing materials listed above.
Before picking an agent, interview several brokers, noting their expertise in relation to your project. Brokers can be important members of your team, keeping you focused on your public face, relieving you of nuisance tasks, and manning the project during open houses. They do all of this for a fee that is not paid until the closing.