One of the most complete and thorough glossaries of words and terms used by the real estate development and investment sector was compiled by SKB, a real estate merchant-banking firm based in Portland, Oregon.
SKB has given THG permission to share this glossary with visitors to the THG website. The glossary is the most visited area of SKB’s own website, with many of the readers being college and university students who see it as being an important learning tool. To view the glossary click here.
Other terms frequently used by THG and its associates include the following. This is a starter list which we will continue to expand. Intrawest in particular had countless proprietary words and terms that became part of the company’s unique business vernacular and that have since found their way into the global development culture.
At its simplest, how an organization makes money. A model, a way of doing business, used by the company to generate revenue and make a profit from that revenue. The model includes the components and functions of the business, such as development, construction and operations, as well as the revenues the business generates and the expenses it incurs.
A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It contains background information about the organization attempting to reach those goals. It also identifies market opportunities – vacuums that exist in those markets – and how your company, its competencies and its brand are uniquely suited to fill those gaps. When the existing business is considering a major change or when planning a new venture, a 3 to 5-year business plan is required, since investors will look for their annual return in that timeframe. My experience is that while the primary audience for a business plan exists outside the company, the real beneficiaries of a business are internal to the company and those who have participated in its preparation, who understand it and who enthusiastically support it.
COLD VERSUS WARM BEDS
Describes the difference between condo-hotel units and other forms of individual resort residences (cottages, chalets, etc.) that are occupied exclusively by their owners. Cold beds refer to lodging that is seldom used by its owner. Warm beds are residences that are placed into a rental pool and therefore have the highest level of year-round occupancy. Warm beds generate revenue for the shops, restaurants and attractions that make up a resort destination.
It is difficult to operationally and financially sustain a resort that has a high percentage of cold beds.
Intrawest pioneered this resort concept and made it the centerpiece of its real estate strategy. One, two and three-bedroom units were sold to individual buyers and then placed in a rental pool of resort residences that behaved like a vacation hotel.
Connectors are typically multi-talented, knowledgeable and highly social people with a wide circle of trusted friends, associates and contacts. Connectors genuinely enjoy those relationships and are willing to connect or “link” people together in an unselfish way that is to everyone’s benefit. Connectors often have many interests – the arts, politics, sports, environmentalism, technology, etc. – that allow them to become the intermediary between different social, organizational and corporate worlds. Connectors are one of the business archetypes identified by Malcolm Gladwell in his best-seller “The Tipping Point.”
A process that engages a company in collectively authoring a shared ‘future story’ of an enterprise or project. It is a powerful imagineering and strategic planning technique. Envisioning involves both the company’s leaders (the insiders) and outsiders – thought leaders who can help you look at your world though fresh eyes, who can stimulate and expand your thinking, and who can help you bring your story (your vision) into sharper focus.
FIRST WE SELL IT, THEN WE BUILD IT
The mantra for an approach to development pioneered by Vancouver-based Intrawest. It was one of the company’s pillars of real estate success. It required discipline, belief in the product and a toolbox full of marketing and sales techniques and technologies. It helped manage risk. The view was if you can’t pre-sell projects then there was something inherently wrong with either the product or the current market conditions. Intrawest’s pre-sale reservations were enough to cover the cost of construction.
FRACTIONAL REAL ESTATE
Also an Intrawest invention, the term describes a number of different types of resort real estate ownership. Each is a variation of Timeshare where each person owns 1/52 of a specific unit down to a much more expensive and exclusive ¼ (quarter share ownership) where each owner has the right to the unit every fourth week.
NEW BUSINESS DEVELOPMENT
This is the process of creating sustainable long-term value for the company by strategically drawing on existing relationships with customers, associates and trusted suppliers, a network of personal and corporate contacts, memberships in industry organizations, and the halo of your company’s brand. At its heart, business development is all about figuring out how the interactions of those forces combine to create opportunities for growth. Long-term value in its simplest form is cash, money, profit – the lifeblood of any business – but value can also be market access, brand equity, intellectual property, or anything else a company possesses that propels its growth.
A basic tenet in new business development is The Principle of Reciprocity. This principle defines our need and tendency to want to give something back when something is received. This need is strongest when the gift is given without expectation of return. But even at the lowly (but important) level of “thank you” (in response to a referral, introduction, or piece of business insight) is followed by another reciprocal gesture “you’re welcome’. Malcom Gladwell’s, The Tipping Point, introduced The Law of the Few and a vocabulary about connectors (defined more completely in this glossary), social networks and hubs, weak tie, mavens, persuaders, Stickiness Factor and Power of Context. Inherit in these is The Principal of Reciprocity and its role in business development, and in particular by those who reciprocate.
Every step we take – no matter how small – to understand the needs of our current and prospective customers will increase
Rather than owning a specific unit, the owner acquires a number of points (that he or she can optionally continue to add to) that translates into usage. For example, the owner can spend a small number of points for a romantic weekend getaway or more points for an extended vacation with one’s entire family. In some instances points-form owners collectively own the timeshare company and all its assets. In other situations, the resort developer and/or the operating entity own the physical assets.
PRIVATE MEMBERS’ CLUBS
Private membership clubs are the fastest-growing segment of the fractional industry. While not all of these clubs, also known as resort or destination clubs, offer their members an ownership stake in the clubs’ properties, they do represent the top tier of luxury vacationing, with members paying a one-time initiation fee.
A method of allowing individual owners of a resort’s condo-hotel units to place their unit into a “pool” managed by the developer of the hotel, who then shares the resulting rental revenues with the owners of the condos.
A verb, much like Xeroxing and Googling. For me, the act of ‘smithing’ (by Paul Smith) refers to the ability to take a memo and turn it into a powerful story.
A writing that puts forth the answer to two business questions – “What If?” and “What Now?” meaning what’s the actionable and doable plan? People want to hear something more than dry facts – they want to hear a story they can believe in. A story that comes from the hearts and minds of the leaders themselves. As Steven Pinker of Harvard University Department of Psychology explains, ‘the mind best understands facts when they are woven into a conceptual fabric, such as a narrative. Disconnected facts in the mind are like unlinked pages on the WEB, they may as well not exist.”
STRATEGY & TACTICS
Strategy is making choices – choices about what you will do, and what you will not do, to create advantage over the competition:
- What is winning vision?
- Where will we work?
- How will we win?
- What competencies must be in place to succeed?
- What management & measurement systems are required to execute?
Tactics are the steps to achieve strategy.
THE ELEVATOR PITCH
The real purpose of the traditional 30-second elevator pitch isn’t just to offer a short-form description of your business, it’s to offer something so compelling it begins a conversation. At Intrawest, we described it as begging the “tell me more” response.
Social media and social marketing are forcing the whole world to be more succinct and at the same time more engaging in the way they describe their businesses and their products. For example, every Steve Jobs pitch for an Apple product easily fit within 140 characters allowed by Twitter. (iPod: “1,000 songs in your pocket.” MacBook Air: “The world’s thinnest notebook”).
For example, “our company…wants to grow its business…but there are roadblocks and impediments to that happening…so here’s what we must do to remove them.
THE LOGIC AND THE MAGIC
At Intrawest we brought together a process that we called envisioning that aligned magic and logic. This is a quote from an Annual Report:
“The Magic – places that give people experiences that enrich, enlighten and excite; places that bring friends and families together and leave legacies of indelible memories. The Logic. Behind the magic is rock solid logic – a business based on understanding our market, mitigating risk and generating profit. Without the logic, there is no magic. Without the magic, there is no profit. And therein is the real magic.”
Once a shared Vision has been agreed to by all the people who have the responsibility for bringing that vision (future story) to life, the Mission describes the overall purpose of an organization: what we do, who we do it for, and how and why we do it. It sets the boundaries of the organization’s activities and keeps everyone focused on providing guests, visitors and residents with a great experience of the company and the services and products it provides.
Reflects the deeply held ideology of a company – known as its CORE – that doesn’t change over time. Values are what your organization lives, breathes and reflects in all its activities – rather than what business textbooks tell you what should believe. The CORE addresses the question, how do we carry out our mission?
Describes an ideal future. It answers the question, “What impact to we want to have on our business sector?” How do we want our many constituencies to experience us? Our employees? Our financial and operational partners? Our clients? The community we call home? The media?
The vision is articulated in a written narrative – a future story – that the entire leadership of the organization has helped author and therefore supports.