If you know me you’re aware that I’m enjoy the political arena. A more honorable way to put it may be that I’m always interested in a more perfect union. That said, tons of my friends and clients “are political” and may find the article below pretty interesting. It’s a good read from a real estate prospective regarding the RNC camping out in Cleveland, Ohio for a while.
Tidbits like the California delegation’s 600+ attendees staying an hour away from the venue, a lobbyist group popping out $60,000 for a house for the week, and a real estate firm buying an Interstate billboard stating, “Leaving the country if Trump or Hillary are elected? We’ll get your house sold!” (Not really my style, but you get what he’s trying to do.)
Ever heard of friends renting their homes or condos in Columbia during the week of The Masters? Cleveland and the RNC is that on steroids. FJ
Republican National Convention is Both Boon and Bust for Cleveland Real Estate
-Cleveland has about 5,000 hotel rooms within walking distance of the arena, which all booked quickly — now what?
Amy SwindermanAmy Swinderman amyswankmediaamys@inman.com Jul 6, 2016
Key Takeaways
-With the convention just three weeks away, there are about 30,000 attendees and visitors still in need of housing for at least the week of the event, if not longer.
-Howard Hanna Real Estate Services is the “official” real estate company for the convention.
Howard Hanna’s properties have been renting from $4,000 to $22,000 for the week, and agents are concentrating listings within 10 to 15 minutes of the arena.
-Another Cleveland area broker is focused on helping area homeowners sell their homes so they can flee the country when the next President is elected.
-Despite the business boost the convention has provided to Cleveland area brokers and agents, demand and prices are both more sluggish than expected.
Real estate agents and brokers in Northeast Ohio are capitalizing on the opportunity brought about by thousands of visitors who need housing during the Republican National Convention (RNC) this month — and even using the polarizing Presidential election to market their services to disappointed voters.
The long, contentious presidential primary road officially ends July 18 through 21 at Cleveland’s Quicken Loans arena, home of the newly minted 2016 National Basketball Association Champion Cleveland Cavaliers.
About 50,000 delegates, RNC staffers, lobbyists, media, demonstrators and others are expected to descend on Cleveland, a city with nearly 400,000 residents, for the convention and its associated, ancillary events.
Cleveland has about 5,000 hotel rooms within walking distance of the arena, most of which booked shortly after the Republican National Committee announced Cleveland as the host city in 2014. The Host Committee has contracted for about 16,000 more hotel rooms, nearly 95 percent of which are located within 35 miles of downtown Cleveland.
Some visitors will be staying even farther away from the venue, however.
Each state delegation gets its own hotel, and California’s 600-plus delegates, for example, could only find enough space at the Kalahari Resort — a tropical-themed water park and hotel in Sandusky — which is about an hour’s drive away from the city.
With the convention just three weeks away, that leaves about 30,000 attendees and visitors still in need of housing for at least the week of the event, if not longer — and real estate brokers and agents in the area are finding great opportunities in helping to ease that pain point.
“We have a lot of unique properties in Cleveland that would probably be triple or quadruple the value of a comparable rental in another market, but that is part of the great low cost of living here,” said Rob Frost, chairman of the Republican Party of Cuyahoga County (RPCC).
“We’ve seen a lot of person-to-person rentals or person-through-real-estate-agent rentals.”
To assist homeowners, property managers and others in putting their digs up for rent, the RPCC selected Pittsburgh-based Howard Hanna Real Estate Services, the country’s fourth-largest real estate sales organization, as the “official” real estate company for the convention.
“After Cleveland was awarded the convention, the first thought a lot of clever people has was, ‘how do I rent out my house or condo?’ There were a lot of websites that offered information about that, but they didn’t give people the kind of individual attention and management experience they needed in order to know how to rent their homes out to strangers,” said Frost. “There was no question that Howard Hanna had the local market expertise we needed. The great experience we have had with Howard Hanna is all due to their local agents.”
Navigating unchartered waters for both brokers and owners
Jared Zak, director of property management at Howard Hanna, said the convention is new territory for everyone in Northeast Ohio — brokers and agents included — because Cleveland has rarely hosted a national event of this size.
“For the most part, we have allowed owners to be in the driver’s seat and counseled them as the deal gets put together on what the going rates are,” Zak said. “We have to the best of our ability tried to inform people about this process, but this is something that’s new to anyone in this region.”
Howard Hanna’s properties have been renting from $4,000 to $22,000 for the week, and agents are concentrating listings within 10 to 15 minutes of the arena. Zak said a few hundred agents have participated in listing rental properties for the convention, and Howard Hanna charges a flat fee of 20 percent of the rental price.
“Most of the homes here are not normally used as rentals, so we have had to inform our clients of the expectations the end user is looking for: That they need to prepare it as if it were a vacation home rental and understand that you are opening your home to strangers, so there is some risk involved,” Zak said.
“This isn’t for someone who thinks they can make a quick buck and everything will be 100-percent okay. We do everything we can to mitigate potential issues by making sure the proper legal documents are in place, money is collected before occupancy and proper lodging taxes are paid — all of the things someone who is not normally a landlord may not be aware of or consider.”
RNC rentals a boon, but sales are still No. 1
Ali Rose, a broker with RMX Lake Realty, a 20-agent Re/Max Beyond 2000 team that specializes in luxury lakefront properties, is focusing on assisting homeowners and property managers rent properties that are located along the Lake Erie shoreline within 10 to 15 minutes of the arena, mostly in the area’s first-ring suburbs like Bratenahl and Lakewood.
“It’s our understanding that the RNC doesn’t want too many people driving to the convention. We want to keep people closer to downtown so they can use public transportation,” Rose said.
Rose’s firm rented out one luxury seven-bedroom, six-bathroom home on Lake Erie in the Edgewater Park neighborhood to a lobbyist firm for $60,000 for the week.
Smaller apartments are renting for about $3,000 for the week, and the firm has a variety of properties that fall within that price range.
“Good things come in all price ranges, and we can accommodate anyone who is a delegate or wants to participate somehow in the convention,” she said.
Rose’s agents are netting a 12-percent commission on the rentals, and the firm is sweetening the deals for clients with a concierge service if out-of-towners need information and recommendations on restaurants, dry cleaners and other local businesses.
Despite the profitable extra business her team has earned from the convention, Rose notes that “sales are still No. 1.”
“If someone calls and says they want to sell their property, that takes priority over everything,” she said. “The RNC then falls into second place. Sorry, RNC, but that’s the way it is.”
The best publicity money can buy
Another Cleveland area broker, Stasek Real Estate Experts, is focused not on assisting people with finding housing for the convention, but on helping area homeowners sell their homes so they can flee the country when the next President is elected.
Capitalizing on criticism of both presumptive candidates, Al Stasek, CEO of the 12-agent, family-owned team that broke off from ReMax three years ago, recently purchased space on a 14-foot by 48-foot highway billboard that proclaims,” Leaving the country if Trump or Hillary are elected? We’ll get your house sold.”
Stasek got the idea for the billboard from a viral meme he spotted in a Facebook group for real estate brokers and agents.
“At first, I was a little hesitant, because you just don’t know how people will react,” he said. “I knew there was a chance I might piss a few people off, but I also know that usually when you do that, you are making a lot of other people happy. So I decided to pull the trigger.”
Stasek asserted that the billboard is not intended to make a political statement, but instead is part of his firm’s marketing strategy.
Although this is the first billboard his firm has put up, he’s no stranger to creative marketing. After the 2008 financial and real estate markets collapsed — and Cleveland lost nearly 50,000 homes to foreclosure — Stasek’s firm charged prospective buyers $15 a head to take a “Cleveland Foreclosure Bus Tour” to view struggling properties and make offers.
“There is no political statement behind it. I just relate to the people who feel no core value connection to either candidate,” Stasek said. “My ultimate goal was to get media attention — and it’s working.”
The billboard went up along I-71 South, one of Cleveland’s main highway arteries, the same week that the Cavaliers won the NBA championship. The billboard was likely seen by thousands of Clevelanders who used the highway to meet the team at the airport upon its return, as well as some of the estimated 1 million people who flocked to downtown Cleveland for a parade celebrating the end of Cleveland’s 52-year professional sports championship drought.
Stasek has been giving interviews to local television and radio shows for the past two weeks, and said the reaction and feedback he has received has been “overwhelmingly positive.”
Stasek paid $12,000 for the billboard’s three-month stint, and he said he fully expects to recoup that investment.
“We already have three appointments from this billboard,” he said, although he did not say where those homeowners are thinking of moving. “If we sell two or three houses from it, it will more than pay for itself.
“I’m not even remotely worried about getting that money back. And for all the media attention it’s received, you can’t buy that kind of publicity.”
But Stasek has an altruistic goal in mind, as well. He hopes the billboard will yield great value for the partnership his firm has with the Cleveland Food Bank. For every home Stasek Real Estate Experts sells, the firm feeds 100 people, he said.
“This is something that is a very big deal to us, and it’s part of our company’s core values and mission to feed 50,000 meals to Northeast Ohio’s hungry,” he said. “Every morning when we go over our numbers, it’s part of our metrics. We’re hoping the sign will help us sell a ton more homes so we can provide more meals.”
Real estate activity slower than expected
Despite the business boost the convention has provided to Cleveland area brokers and agents, demand and prices are both more sluggish than expected.
“My sense is that many mainstream media stories put out reports that raised expectations unrealistically about what kind of housing demand there would be,” Frost said. “People thought there would be thousands of private rentals going for $80,000, but that didn’t happen.”
In fact, at press time, there were nearly 550 rental listings on the Northeast Ohio Real Estate Exchange multiple listing service, with only six properties marked “rented” and six marked “pending.”
Some are concerned that planned demonstrations and possible riots may be keeping visitors away, while others attributed the weak demand to reservations about the presumptive Republican nominee, Donald Trump.
“I’m not a political person, but I think we have seen in this election more than any other that some delegates are hanging back to see what is going to happen,” Rose said. “We’ve been disappointed so far, but we hope things pick up the first week of July.”
“We are hearing the same thing, that it has to do with the political climate,” added Zak. “There are also corporations that don’t want to get behind this 100 percent and aren’t doing the normal sponsorship things they would do. The numbers have so far been a bit disappointing, but at end of day, it’s been a good experience for us.”
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