Maximizing: Creating a New Section in an Already Established Community

Red Earth’s engagement with the award-winning Santa Fe, NM community of Las Campanas began with the request of an audit of their ongoing real estate operation. The Dallas based capital group wanted to make sure they were optimizing their incredible asset they had acquired a few years earlier and had the feeling that their current group at the time didn’t have the bandwidth to bring home the results they were looking for. Our seventy-five-page audit of their operation and the assets that they had acquired showed unbelievable unrealized opportunity. The audit not only provided the assessment of the current operation but provided a formal business plan, absorption study and budget to increase the company’s margins, profitability, and sales absorption.

After presenting the report, the managing directors of the capital group signed Red Earth to a multi-year Signature Management agreement. With that, Red Earth’s team got to work, immediately relocating experienced management and marketing staff to the project. The new Red Earth team members, working with some of the existing team members had immediate success, exceeding the first-year sales goals. Las Campanas is a high-amenities private club with 4,700 acres. Complete with two Jack Nicklaus Signature courses, indoor pool and fitness, tennis center, stables, and indoor riding arena. Originally developed by Lyle Anderson, the club had fallen into the Dallas developer’s hands during the tumultuous 2010-2011 time period.

Once Red Earth had been installed for a few years, the proposition of developing and releasing a section of new homesites was discussed. This was looked at as a potential risky proposal as millions of dollars of due diligence, engineering and site work had to be complete before the first sale, all the while there was a decent amount of existing resale home inventory in the community already. The group wanted to make sure adding inventory, with new homes was a wise investment decision on their part.

Our plan was to release two undeveloped tracts of land. One to sell to a large regional or national builder that had the capability to do a single large take down, and the other section to be released to the public for a custom lot program.

The first section, ended up with the Albuquerque division for Pulte Homes. Red Earth worked with their team to help create plans and standards that would fit into the demanding architectural review standards, including representing and supporting Pulte through the review process meetings.

The second section was to be developed into a custom home site section, was named Black Mesa. With fantastic views of the Sangre De Cristo and Jemez Mountains, Black Mesa was designed to feature estate sized properties with long range mountain and golf course views.

The issue was, how do you mitigate the financial risk of the enormous capital investment, but build up demand for a product that isn’t complete or ready for homes yet? Compounding the issue, is the buyer’s general distaste for all things “launch” or “released.” In other words, Red Earth had to create a buying environment that treated a very sophisticated customer with patience and respect, all the while creating pent up demand.

Red Earth’s CEO Pinter stated, “We figured, let’s reward those customers that have a sincere interest early on in the process and let’s reward them with the greatest selection, and by inviting them on the development journey with the development team. Continuously dripping new information to them, allowing them to secure their selection if they choose to proceed.”

The onsite team mapped out a ten-week campaign that had the section over-subscribed with interest beyond the goals of the property release. Each week, new information was released, from aerials, to construction photos, pricing, and developer incentives. Even customers that had “casual” interest began to take notice. The end result was that on the release day that the developer could officially take contracts they were rewarded with ready and willing families that selected their properties and committed to custom builds.

Black Mesa’s development and release was very intentional and very strategic. Red Earth’s knowledge of lead generation and conversion enabled the developer to properly make decisions on the cost-benefit of this development.