A First Time Buyer’s Guide to Branded Residences

This sector of real estate has really taken off, but what is it exactly? The Branded Residence sector started out with hospitality brands (Four Seasons being the pioneer, then Ritz Carlton following suit), combining their knowledge and systems within the hotel world and bringing this to residence ownership. Living in a high-rise with the same service as the hotel became a sought out status symbol, and still does to this day. Fast forward to present and there are several types of industries now taking part than just hospitality brands (think fashion, jewelry, auto, culinary, etc.) I’ve seen everything from Jacob&Co, to Bvlgari, to Armani to Bentley take a dip in the development pool to give their clientele an immersive opportunity to actually live within the brand.

Why are these different?

Branded residences are not comparable to other condos, or homes. The branding is what sets them apart into their own ecosystem. There is a level of expectation and service that is built from the brand itself, which does not exist in other types of real estate. Take for example Four Seasons, you are recognized as a homeowner all over the world within their entire portfolio when traveling. Have a food allergy? The chef at George V in Paris already knows about it before you walk through the door. This is classic Four Seasons culture, and they weave it throughout their Residences as well.

This plays into the consistency within a branded residence. You know what type of service you are going to receive at a Mandarin Oriental, or an Aman, or (insert other fancy hotel brand name here). This feeds into the confidence that potential buyers feel when looking at a branded residence, it’s an underlying assurance their investment is a good one, which also plays into resale as branded residences have a historical track record of having higher resale potential than non branded properties

Is a Branded Residence a Smart Investment?

As with any purchase it depends! Buyers need to understand the value they are paying a premium for, and know that this will appeal to the same type of Buyer when they go to resale. There are advantages, in my opinion, as the name itself lends to a different level of service and can be an instant recognition for buyers globally. Think about it - A buyer lands in Miami from their Four Seasons residence in Vail, which they love. Those Buyers are going to give priority to viewing Four Seasons Residences in Miami, as they know the brand and already love it. Depending on the rental capabilities (usually found in resort markets), having a branded residence will gain higher rental rates and more consistent bookings giving the investor higher occupancy numbers and making it a more attractive purchase.

These have been touted a “safe bet”, but let’s be honest - no investment is 100% safe, but putting guardrails in place (i.e. a brand with a long history of service, consistency and global recognition) is a great avenue to explore.

How would I choose the right one for me?

This can take an individual approach, for the majority of people it comes down to two basic points : location and brand. Location is important no matter what you are looking to purchase, when looking for a branded residence it is also just as important to make sure you are choosing the right brand that aligns with your goals. Whether you are looking for personal use (what elements do you enjoy the most, what is important to you from an experience standpoint, how do you like your service) will lean heavily into making a decision on what brand to live in. When looking from an investment standpoint there are other factors to consider like what are the rental restrictions, what do the rental numbers look like, how is this managed, etc. Does the brand align with the market, for example does the brand resonate with the environment and would this be a top choice for people to rent when visiting?

Where is this sector going?

To put simply, the branded residences sector is going up. There has been an explosion of growth not only in branded residences that have been delivered but also in the pipeline. There is a demand for branded residences that I see coming from buyers wanting to feel confident in the reputation, service and consistency that the brand they buy into has proven.

Branded Residences are evolving from once just having hospitality brands to now having everything from fashion, jewelry, automobiles, culinary, wellness, etc. I read recently there is even a Hello Kitty development somewhere in the pipeline! This sector is branching out to appeal to a much larger volume of potential buyers going far beyond the original hospitality arena.

More questions? Reach out to have a confidential conversation about the Branded Residence landscape and to learn more about how these could be a fit for you.