Branded Residential Projects and Emergence Into the Hotel Market
By Tara K. Gorman Partner, Perkins Coie LLP | April 09, 2017
Branded residential projects offer all the comforts of "home" with the luxury, prestige and high level of services offered at a hotel. This is not as easy as it may appear at first blush and savvy developers are jumping into the branded residential sector with an eye toward high level design and quality, as well as, a keen sense of what the potential purchaser is ultimately seeking. The key to a successful branded residential project is the integration of the hotel services and amenities with the security and privacy of residential living. If done well, this can be quite profitable for the developer as the branded residential real estate market is on the upswing with enhanced sales velocity over unbranded residential real estate by 20 – 30%, especially in emerging markets.
Eloise's Life at the Plaza has Nothing on Grandma
"Over the river and through the woods to Grandmother's house we go" – or Aunt Markie's house, or Cousin Arielle's house, or Uncle Johnny's house, or even our own house – but instead of rolling up to a cabin in the woods, or a house in the suburbs, we roll up to a lovely residence that reminds us more of a luxury hotel than a traditional home. What is this all about? Did Grandma move into a hotel? Nope - Grandma is one of the many who have chosen to purchase a unit in a branded residence.
So what exactly is branded residential reality and why would Grandma and so many others want to live in such a place? Branded residential reality units are typically residential units managed by branded hotel chains and are part of a hotel compound. Branded residential reality is not a new idea. Since as early as the 1920s hotels have offered private residences as well as transient guest rooms. Originally branded residences were residential properties linked to an adjacent hotel. Since then the market has matured and widened and developers are now offering an incredible range of services. Much like Eloise from the Kay Thompson's famed children's books – Grandma thought it would be cool to live in a hotel, but this hotel has far more bells and whistles than Eloise's lifestyle at the Plaza.
Branded residential real estate offers buyers the opportunity to own property in a branded residence, enjoy the benefits of hotel services and amenities and as an added bonus – reap any potential returns on their investment. Often purchasers of branded residential reality are buying more than real property rights, they are purchasing "lifestyle" and community. What does that mean? Like many of us, Grandma was probably tired of doing her own laundry, cutting the grass, cleaning the gutters, schlepping across town to the gym, locking the front door at night, etc.
Branded residential reality merges the best of both worlds – the comfort of home with the luxury and services of a hotel. Residents of world-class branded residential reality benefit from the rise in service and facility standards at hotels. The integration of hotel-style services at branded residential developments include 24-hour concierge and security services, room service, private elevators from secure underground parking to home sweet home, integrated entertainment systems, laundry, theatre and restaurant booking and shopping services. And that's just the start – and "typical". Some luxury branded residential facilities include exclusive restaurants and bars, private dining rooms, private cinemas and screening rooms, health and fitness facilities, spas, pet care, climate controlled wine cellars, private wine tasting facilities and even wine consultation services! Often the branded residential component of the hotel compound has its own entrance, elevators, and facilities – so the residents don't have to mingle with the transient guests if they chose not to. Ah ha! Now we understand why Grandma moved. Grandma can kick her feet back at home – just like she did on vacation. What a life.