Let's Shvo: Real Estate Becomes Fashion
[Real Deal] 9/13/06
If Gordon Gekko stepped out of the 1987 film "Wall Street" and into today's New York real estate market, he might look like Michael Shvo. The character played by Michael Douglas often touted the sheer thrill of dominating the deal – any deal – and became the fictional personification of the heady days of the late 1980s stock market.Shvo, founder and CEO of his eponymous firm, could be considered the embodiment of the still-booming New York housing market.Reviled by some and admired by others, barely into his thirties and less than a decade into real estate, Shvo, formerly a top producer at Douglas Elliman, is head of a year-old company that's marketed luxury condos such as the Lumiere and Bryant Park Tower, and paired noted architects with developers. The controversial marketer said his edge is bucking conventional wisdom when it comes to understanding buyers, especially younger ones.The Real Deal recently sat down for a chat with Shvo as part of our regular podcast series. The entire interview can be heard under the "Audio Interviews" section of the Web site. THE REAL DEAL: How do you market projects differently than your competitors?SHVO: We look at real estate as a luxury brand. I'm not selling four walls. What we do is probably 20 percent real estate, 80 percent branding and marketing. Real estate to me today is a complete luxury brand. I'm marketing real estate the same way that Gucci is marketing their sunglasses, Chanel is marketing their perfume, the same way that Ferrari is marketing their new F430. Our whole idea is not to market real estate as another piece of real estate.TRD: Where do you draw your employees from?SHVO: A lot of people I've hired are not real estate people. I bring in a lot of people from fashion companies, people from investment banking, some people from other marketing companies. Right now, we have over 50 people working here. We are not a brokerage company – that's something that most people know or don't know.TRD: This is sort of the requisite question to be asked: Do you think there's a housing bubble above the New York market?
SHVO: The people that have created the bubble is the press. If you look at the fundamentals of the market, there is no real reason for the market to go the other way. I still don't think that the supply is going to overdo the demand in New York. If you think of the fundamentals of the housing market in New York, there are just over 2 million residential units in the city. There are 65,000 condo units. The proportions are so wrong between the two numbers.But if we are going to see the press continually write negative articles and talk about the bubble and say that there is a bubble, eventually they will be able to get into people's heads and change their mood. Because people today are not only buying because they necessarily need housing, they are buying because they are in the mood.[However], I do believe that a year from now – and you have this on tape – you are going to see products sit on the market. It doesn't mean that the market is going to go down. But today people are buying like herds. Right now, there is very little inventory still, so they are buying what's out there. The minute that you are going to want to live in Chelsea, and there are eight buildings and you can go to eight sales offices, you are going to be able to decide where you want to live, and the market is not going to decide for you where you're going to live.
If Gordon Gekko stepped out of the 1987 film "Wall Street" and into today's New York real estate market, he might look like Michael Shvo. The character played by Michael Douglas often touted the sheer thrill of dominating the deal – any deal – and became the fictional personification of the heady days of the late 1980s stock market.Shvo, founder and CEO of his eponymous firm, could be considered the embodiment of the still-booming New York housing market.Reviled by some and admired by others, barely into his thirties and less than a decade into real estate, Shvo, formerly a top producer at Douglas Elliman, is head of a year-old company that's marketed luxury condos such as the Lumiere and Bryant Park Tower, and paired noted architects with developers. The controversial marketer said his edge is bucking conventional wisdom when it comes to understanding buyers, especially younger ones.The Real Deal recently sat down for a chat with Shvo as part of our regular podcast series. The entire interview can be heard under the "Audio Interviews" section of the Web site. THE REAL DEAL: How do you market projects differently than your competitors?SHVO: We look at real estate as a luxury brand. I'm not selling four walls. What we do is probably 20 percent real estate, 80 percent branding and marketing. Real estate to me today is a complete luxury brand. I'm marketing real estate the same way that Gucci is marketing their sunglasses, Chanel is marketing their perfume, the same way that Ferrari is marketing their new F430. Our whole idea is not to market real estate as another piece of real estate.TRD: Where do you draw your employees from?SHVO: A lot of people I've hired are not real estate people. I bring in a lot of people from fashion companies, people from investment banking, some people from other marketing companies. Right now, we have over 50 people working here. We are not a brokerage company – that's something that most people know or don't know.TRD: This is sort of the requisite question to be asked: Do you think there's a housing bubble above the New York market?
SHVO: The people that have created the bubble is the press. If you look at the fundamentals of the market, there is no real reason for the market to go the other way. I still don't think that the supply is going to overdo the demand in New York. If you think of the fundamentals of the housing market in New York, there are just over 2 million residential units in the city. There are 65,000 condo units. The proportions are so wrong between the two numbers.But if we are going to see the press continually write negative articles and talk about the bubble and say that there is a bubble, eventually they will be able to get into people's heads and change their mood. Because people today are not only buying because they necessarily need housing, they are buying because they are in the mood.[However], I do believe that a year from now – and you have this on tape – you are going to see products sit on the market. It doesn't mean that the market is going to go down. But today people are buying like herds. Right now, there is very little inventory still, so they are buying what's out there. The minute that you are going to want to live in Chelsea, and there are eight buildings and you can go to eight sales offices, you are going to be able to decide where you want to live, and the market is not going to decide for you where you're going to live.
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