Cell phones, sunshine, and tanned, rich blonds. That's Orange County, Calif., for you—at least the one popularized by television shows such as The O.C. and Laguna Beach: The Real Orange County. Those series would have you believe that life there is much like a visit to Disneyland: somewhat expensive, mostly idyllic, but at times, banally homogeneous. Turns out those shows aren't too far from reality. Happily sandwiched between Los Angeles and San Diego, Orange County is fronted by sandy Pacific Coast beaches, backed by the picturesque Saddleback Mountains, and recognized as a Southern California banking, finance, and real estate business hub. The county sprawls across 948 square miles—and approximately one-fifth of the land is owned by The Irvine Co.
The 94,000-acre Irvine Ranch, assembled from Mexican and Spanish land grants in the 1860s and incorporated under The Irvine Co. in 1894, covers almost the entirety of the southern portion of the O.C. and includes Laguna Beach, Anaheim, Irvine, Newport Beach, and Tustin. Not bad markets to be in, particularly when you are virtually the only game in town, as is the enviable position enjoyed by The Irvine Co. Apartment Communities (IAC). The Irvine Co. subsidiary, which was briefly a publicly traded REIT in the '90s, built its first asset in 1969 as part of the master-planned community of Irvine, Calif.
For more than a quarter-century, IAC quietly enjoyed its place in the sun. Pride and discipline—not to mention the close watch of the international development community on one of the earliest master-planned projects —kept asset quality and service levels strong across the growing portfolio. Still, IAC had no compelling reason to market its assets. “We built a great product, we serviced it well, but we didn't market it as well,” explains IAC president Max Gardner. “It was almost an order-taker mentality. ‘If you want to live in Irvine, you are going to live with us. We do a really nice product; why wouldn't you want to live here?'”
That all changed in 1996 with the opening of Toll Road 73, a 15-mile four-laner stretching from Newport Beach south to San Juan Capistrano. The toll road bisected the Irvine metro, opening the submarket to competition from L.A. and San Diego bedroom communities such as Riverside and Oceanside, respectively. “And it wasn't just the 73,” Gardner adds. “With the additions of the 241, the 261, the 133, and improvements to interstates 405 and 5, people can get here much easier from a number of communities. As a result, we have had to adjust our whole approach to marketing.”
Irvine couldn't have chosen a better leader than Gardner to accomplish a reinvention. If there's anyone with a grasp of differentiating product amidst growing competition, Gardner fits the bill. “I spent three years in retail after college, and you could read that as three Christmas seasons,” he says. “Talk about marketing pressure—it led me into real estate if for any other reason than there had to be a better way.” The better way was pursuing an MBA at Georgia State University, a degree that led to a seven-year position at Trammell Crow Residential, first as regional partner of finance for the West Coast, and later as president and CEO of Trammell Crow Residential Services.
From 1995 to 1998, Gardner was executive vice president and chief operating officer of Bay Apartment Communities, where he also served as a member of the company's board of directors. After Bay's merger with Avalon Properties, Gardner had overall responsibility for development and acquisitions in the western region. In total, 30 years of multifamily experience that gives Gardner the pedigree necessary for his marching orders—particularly on the marketing front—since joining IAC in 1999 as executive vice president. “The most important thing I can ask is to think on the job,” Gardner explains. “To reach for perfection and not do things because that is the way the last guy did it.”
Over the past decade, IAC has done just that, spending substantial marketing dollars in the process. (The company would not divulge its annual marketing budget, saying only that it is, per door, significantly higher than the industry norm.) The firm's reinvention is a prime example of marketing done right—IAC has recreated its brand identity and tagline, developed an advertising strategy to appeal to the psychological and emotional needs of its customers, trained associates to sell across the portfolio rather than at their specific properties, and energized its communities with fresh design and social activities. The result? A company that delivers on its promise that residents will love where they live.
LIFESTYLE SANS BLUEPRINTS Throughout the marketing evolution, one of IAC's biggest challenges has been differentiating assets across the company's 90-community portfolio. Although wide variation exists among IAC properties in age, price point, design, and amenities, the company's historical market saturation and lack of outreach perpetuated a cookie-cutter image held by consumers.
“Most of our properties are surrounded by our properties,” Gardner explains. “So the challenge becomes appealing to different customer segments so people don't say, ‘I've seen one Irvine apartment community; I don't need to see another one.' It is paramount then to communicate both what we are and what we are not. We do not want to be thought of as the Stepford Properties.”
There's no reason each IAC asset shouldn't be able to stand on its own merits. Case in point: The 31.5-acre The Village at Irvine Spectrum Center, home to 3,000 residents across 1,550 one- and two-bedroom Class A apartments where approximate rents range from $1,525 to $2,050.