The Marketing it Takes to Put a City on the Map
Ever been to Serena del Mar? Probably not, because it’s a Colombian city that hasn’t been built yet. Developers and masterplanners have come together with a vision to build a city neighbouring the old city of Cartegena, taking inspiration from the culture and heritage and integrating it playfully with modern architecture that honours nature and urban amenities (Much like Currie, just, you know, more tropical). The principles of social inclusion, environmental friendliness, and an enriched quality of life are woven through the plan. Chicago-based VSA Partners and Colombian consultancy Novus Civitas were challenged with defining a place that won’t be completed for at least 20 years.
The big idea? Dreams meet reality, shape the world around the land, and evolve alongside the earth.
The visual identity, inspired by the early vision of the project is derived from “los morros”, a geographical feature of the land that includes the mountains and the ocean.
In Colombia, watercolour is a treasured art form so the logo often appears on a watercolour treated backdrop in application. The brand colour palette is both modern and indigenous to the region.
Check out the project video: https://youtu.be/PZmGOYfbdM4
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Seeking Construction Financing in the US? These 4 Trends Could Have an Effect
In 2015 in the USA, it was still easier to obtain a construction loan than back in 2011. Here are four trends that outline how lenders are beginning to be more cautious this year.
- Bank underwriting is tightening. Debt lenders run debt-coverage-ratio tests or debt-yield tests to restrict proceeds for apartments. The for-sale market hasn’t seen quite the same stringency for condos, subdivisions, and townhomes; lenders are simply being more cautious in these markets.
- Banks have exhausted their construction allocations. Some lenders have a certain allocation for construction and have recently exhausted or nearly exhausted it. They need time to recover the funds from previous construction loans in order to move forward with new ones. Of course, no lender wants to advertise that they don’t have the money, because borrowers will simply go to the competition.
- There are new regulations. One such regulation is the High Volatility Commercial Real Estate (HVCRE) requiring lenders to prove that a borrower has 15% equity in a project at stabilization. Even when a project is a success, it is a difficult proposition because the as-stabilized value may exceed 15% cash equity in the deal. This means the bank will be out of compliance, which in turn means they will need to reserve more against the loan. The inability to put that money out costs the bank, a cost which they will eventually find a way to pass on to the borrower.
- Banks are increasingly concerned about submarkets. Open secret: some banks won’t lend in certain submarkets until the products are in the process of stabilizing at their pro-forma rents. The same lenders have no issue funding deals in the overall markets.
Knowing these issues and understanding the deal going in is critical for approval success. Read the case at GlobeSt.com
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What’s the Next Strategic Move for Phoenix Developers?
Colliers International released an annual report on the Phoenix, AZ real estate market. Here are the highlights:
- The market for office space in Phoenix improved year-over-year (YOY) as vacancies decrease and rents increase. This has prompted new construction.
- The industrial market strengthened in the last quarter of 2015. Development of industrial space slowed in the second half of the year, then vacancy decreased due to a surge of absorption from a few major users.
- Though the retail market was slower to recover than other sectors, vacancy rates still decreased YOY. Rents have started to increase following several years of annual decreases; the average asking price went up 3.4% in 2015.
- The housing market will be the top driver of land sales, with single-family permits increasing through 2015 and into 2016. In fact, it is estimated that permitting of single-family homes will increase by at least 40% YOY in 2016. The price of a new home has remained steady.
- Even though multifamily permits decreased in 2015, they are expected to bounce back in 2016, simply due to timing. Those who bought sites in 2015 will now begin seeking permits in Q1 and Q2 of 2016. Densities will increase, but prices will remain steady based on pricing per unit.
So how do developers react strategically this year?
Density is one consideration; higher densities provide more value for the developers in many cases. Location is another major deciding factor of opportunities. The strengthening of the local housing market and employment outlook means land sales in Phoenix will continue to accelerate in 2016.
For the whole story, visit GlobeSt.com