Open houses dangle door prizes, food to draw brokers

MEMPHIS, Tenn. — When most people drop by a real estate open house, they might be offered a cookie or something to make them feel welcome.

But at two open houses Brian Califf attended earlier this year, he left with a $500 iPad 2 and a $25 gift certificate to Cafe Med. Not to mention free lunches and thank-you cards stuffed with $50 cash.

Califf is a commercial real estate broker. He’s frequently invited to attend his profession’s version of open houses.

“We call them ‘exclusive broker events’ or just ‘broker events,’ ” said Eric Fuhrman, a broker with Investec Realty Services. According to Califf, Fuhrman has a reputation for hosting really good ones.

Broker events are organized by a broker who is trying to sell or find tenants for a client’s building.

The events are often held to get brokers to familiarize themselves with buildings “which aren’t in the mainstream,” said Greg deWitt, vice president with Grubb and Ellis.

The client foots the bill, which for Fuhrman’s events typically runs between $3,000 and $3,800.

Invitees are not prospective buyers or renters, but other brokers who could steer a buyer or renter to the property.

The invitation list is exclusive, limited to perhaps 20 to 40 brokers who are known to be deal makers and to specialize in the type of building being marketed (office, retail or industrial).

For example, about 35 brokers recently accepted Fuhrman’s invitation to come tour a two-story office building. The 12,668-square-foot building is for sale for $699,000. It sold for $1 million in 2007.

As the brokers arrived, they were given thank-you cards with $50 inside and were later treated to a lunch catered by Cafe Med.

They listened as Fuhrman talked about the building, emphasizing that in this economy the seller is motivated, the building is underpriced and the broker’s commission is a healthy 4 percent.

Finally, to reward the brokers for staying to the end, business cards were drawn for $800 worth of door prizes. The top ones were $200 gift certificates to Jos. A. Bank clothing store and Sunglass Hut.

“With this concept, we guarantee our owners, ‘We’ll get you 30 to 40 brokers in the door to look at your property,’ ” Fuhrman said. “By the time you spend an hour and eat lunch, you know the building well; you can talk about it with clients like it’s yours.”

The building owner gets a thorough accounting of the money spent and the event.

Fuhrman has held three broker events so far this year. Each led to either a letter of intent or a lease.

Grubb & Ellis’ deWitt in May hosted a broker event to show 15,000 square feet in an office building.

“We had 40 people show,” deWitt said. “We didn’t give cash. We gave cocktails and great hors d’oeuvres,” as well as drawings for Simon gift cards worth several hundred dollars and tickets to a concert.

About 10 years ago deWitt won a two-year lease of a Mercedes in a drawing he qualified for by showing and finding tenants for a group of buildings. Last year, he won an iPad.

“At the end of the day, it’s about making sure many people who are in the real estate industry know what you have available,” deWitt said.

“The incentives are there just to get the people there.”