Starboard Commercial Real Estate

Hans Hansson | May 22, 2006

As the saying goes, baseball is life. Any real-life situation can be matched to a baseball fact, rule, or happening. This season, Barry Bonds may pass both Babe Ruth and Hank Aaron to become baseball's all-time home-run king. Yet, like a real estate deal with "hair"-when a property has a legacy of scandal-Bonds' achievement will forever be marked by the steroid rumors.

If Barry Bonds did take steroids and did hit more home runs because of it, he also lost opportunities to hit home runs: He has been intentionally walked more times than any other player in the history of the game. Barry also played a large percentage of his games at Candlestick Park, where he lost many home runs due to strong winds, in the same way that Willie Mays did when he played there.

When Babe Ruth played for the Yankees, the team moved the right field fence to less than 300 feet from home plate and lowered the height of the fence-sparking talk that this contributed to his record. Henry Aaron hit the majority of his home runs in a park known as the "launching pad" because of how the wind picked up and carried the ball-could this explain his dominance? Willie Mays lost two of his potentially most productive years serving in the military; when he did play, he lost many home runs in the winds of Candlestick Park-do these facts make him any less great? In other words, the home-run records have "hair" on them; if Bonds breaks these records, his use of enhancers should not affect his legacy or eventual induction to the baseball hall of frame.

How does this relate to real estate? Let's look at a couple of iconic buildings as examples. Chicago's 1 Waterspark is one of the tallest buildings in the world; it has the best views of the lake of any building around-yet it has struggled as an office building because of perception that it is too far away from trains and from the core downtown. Large firms have failed to show interest in moving there, leaving multiple small tenants (less than 3000 square feet) paying far less in rent than the building should demand. The view, great retail support, and an appealing external environment have failed to change the perception of this building.

The Empire State Building has a similar stigma that owner after owner has failed to change. As the rumored site of an impending terrorist action, this building has not been able to catch a positive break for almost 50 years.

How does a salesperson deal with "hair" on a deal? Accentuating the positives is certainly one way. Repositioning the building is another way. You could change the address or rename the building. In San Francisco, 24 California Street became 20 California Street because 24 in Chinese means double death. 444 Market Street became One Front Street to reposition it away from a Market Street address, which to many, has always been considered an inferior address.

Many great buildings or projects have been stigmatized by an event or by it's location and are simply waiting for a new approach to make their projects succeed to its highest level possible. Building owners are waiting for direction so that they can take the "hair" off of their project, just like we are waiting to see if Barry Bonds can survive the "hair" from the steroids scandal to break the ultimate baseball record and have history regard it as a true achievement without an asterisk by his name.
Posted 13 years, 6 months ago on May 22, 2006
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