A major property owner recently gave rental services, via its non-exclusive brokerage agreement, sweeping written authorization to advertise its properties. I’m unaware of any other large company that gives rental services blanket authority to advertise its Chicago properties.
According to the company’s brokerage agreement, rental service ads for its properties a) must be accurate and up-to-date, b) must not use the company’s copyrighted descriptions or images of a property, and c) must contain a statement that the ad has been placed by the rental service rather than the property. The rental services are, in my judgment, unlikely to observe these impossible-to-police restrictions.
The company’s action is likely to embolden Chicago’s predatory rental services, and worsen the already bad experience for consumers who are searching Craigslist, Zillow, Trulia and other venues for apartments. It’s also likely to degrade the brand image of the company’s properties, as rental services advertise them with fourth-rate images and incoherent, inflated and misleading ad copy and use them as bait-and-switch fodder to steer renters to other properties. It isn’t difficult to understand that renters, seeing 100s of ads for the same properties, may conclude that they’re desperate for business.
The company in question has been aggressively courting business from rental services in recent months, and this appears to be another effort along that line.
The company’s action comes at a time when a growing number of major property owners and management companies have been publicly and privately supporting YoChicago’s efforts to clean up the advertising mess on Craigslist and other venues, and make it easier for renters to find their next home without being frustrated or confused into using a rental service.
One of my correspondents views the company’s action as a sign of a generally softening rental market:
Market is weakening. I see it. They see it. They need tenants.
The problem [name redacted] faces in my opinion, is that they are doing a value acquisition strategy at the top of the rental market. If rentals fall hard (and they do from time to time) their assets are not the ones people run to. They are the secondary buildings people go to at the top of the market for value. Clearly they think, like gold, the market has a ways to run … But this is still Chicago.
I hope I am wrong – but Q1 this year vs Q1 last year tells me otherwise.
Is this company’s move a smart tactic to gain an edge in a market that’s weakening – or an indication that its properties have a weak appeal in a market that’s showing continuing strength? In either event, it’s a net negative for renters navigating their way through a flood of ads only to find themselves pressured by rental services to rent at properties they might otherwise avoid.
I’m not implying by any of this that the company’s properties are unattractive or don’t represent a solid value for renters. My point is simply that the combination of an ad blitz and the misplaced confidence that many renters place in rental services’ recommendations can easily result in renters being misinformed about their options.
Smart renters will realize that it isn’t difficult to find all of their options in the near-lakefront neighborhoods from the South Loop to Lake View via YoChicago’s comprehensive at-a-glance apartment lists and work directly with the properties that best meet their requirements. As a bonus, they’ll help keep their rent costs from rising or services being limited to pay the cost of the “free” rental services.