The Perfect Match: Luxury Hotel Brands Meet High-End Real Estate
In the early days of The Agency, we were fortunate to assume the role of exclusive sales and marketing agent for the Ritz-Carlton Residences at LA Live. It was one of the first high-rise buildings and the first wave of branded residences in Los Angeles. We sold 224 of the residences, a total of $375 million, in just 30 months. Since then, we have partnered with many developers to achieve sell-out success, including The Residences at The Sawyer in Sacramento, comprised of 45 luxury residences atop a Kimpton hotel that broke sales records in the city. We are currently representing Fairmont and Rosewood-branded residences within the residential and resort community of Mayakoba, Mexico.
While trends in real estate come and go, branded residences are not only here to stay, they will remain a popular choice for the most discerning buyers for many years to come.
Whether it be a sky-high condominium or a home within a gated oceanfront resort, real estate was a natural evolution for many global, household name hotel brands, including Mandarin Oriental, Fairmont, Four Seasons, Montage, Auberge and many more. They had the brand affinity, an established emotional connection and recognition with guests (which translates to an existing buyer pool), and they needed to accommodate longer stay occupancies with the rise of multigenerational travel requiring larger accommodation options. In recent years, companies from other industries have seen the advantages of entering the real estate market, and we now have Porsche, Aston Martin, Nobu, Equinox, Versace and Armani branding residences. And with the benefits for all involved with branded residences—brand, developer and buyers—it’s not hard to see why they remain a popular choice.
Buyers are willing to pay a premium for the turnkey lifestyle that branded residences afford, but they demand the absolute best in terms of the location, five-star service and amenities that reflect their status, enhance their lifestyle and facilitate their day-to-day activities.
In terms of a location, they seek major cities and remote locales providing the best of both worlds—an ultra-comfortable abode with all the mod cons to utilize while in town for business and a place to escape that will provide endless opportunities for precious family memories to be made and, of course, bragging rights. These discerning consumers are not simply satisfied with a gym and a pool. They want dedicated personalized services, including direct access to a private driver and the house car (Bentley or Rolls Royce, please), one-on-one sessions with the resort’s celebrity trainer, room service at the press of a button from the resort’s Michelin-starred chef, customized spa treatments infusing local, ancient rituals with modern-day treatments or the opportunity to park their Porsche in their living room by way of an automated car elevator at the Porsche Design Tower.
While all the bells and whistles are appealing, there are also logistical and financial benefits, too. These properties are typically sold on spec, and buyers find a big-name brand association an assurance that the building will deliver as expected and have minimal issues during the construction phase. These brands carefully select all partners for a project to ensure their good name and reputation remains intact. Most times, if a hotel is attached to the property, owners can place their property into the rental pool to generate income when they are not enjoying it—making for a “guilt free” second, third or fourth vacation home.
And with all the services on tap, it makes life easy for a busy jetsetter. Owners expect the operator to care for their property while they are away and upon arrival, residences will be stocked full of favorite foods and items and luggage will be unpacked. And when it comes time, should you need to sell, the same brand values that drew the owner will again entice a new buyer.
On the other side of the equation, real estate developers and brands are happy to join forces for a branded residence project, as a partnership of this nature is beneficial for both. Brands entering the real estate game will need the expert assistance as they diversify their assets and take advantage of all that name value recognition and existing buyer pool. And developers are as equally keen to ink the deal; although they pay handsomely for licensing fees, royalties and the like, branded residences command top dollar and come with an elevated connection of prestige.
Mandarina, the latest branded residential project currently rising in Mexico, will feature one of the world’s first collections of One&Only Private Homes. The 54 One&Only Private Homes will debut alongside a 108-room One&Only hotel and will be joined in due course with Rosewood Residences and Rosewood Mandarina. The $1 billion project, just north of Puerto Vallarta, has been an exceptionally planned development that will feature unparalleled amenities for homeowners and guests—including a Kid’s Club designed by an Oscar-winning set designer and a world-class Polo and Equestrian Club replete with state-of-the-art polo grounds, dressage and jumping arenas, stables and more.
It has already captured the attention of buyers from around the world, including Major League Baseball player Mark Melancon, whose wife fell in love with One&Only on a family trip to the Bahamas as a child. When she had the couple’s bucket list made out in calligraphy as a wedding gift for him, she included a stay at one of their hotels. Owning a home in one of their resorts is even better.
Mandarina’s chief business development officer, Ricardo Santa Cruz, spent years negotiating to buy the 640 acres. Unfarmable and uninhabitable without millions of dollars of infrastructure, the site is comprised of sweeping mountains, flatland, jungle and a one-mile-long stretch of beach. It was officially designated an ejido, a land cooperative owned jointly by more than 58 families, with each family member having to agree to the sale. It was a lengthy process, and then came the decision of what hotel brands to partner with.
“It took us a very long time to determine that we wanted to partner with One&Only and Rosewood for Mandarina,” Santa Cruz said. “We spent months reviewing every aspect of the brands and what they could offer, and they spent the same time reviewing what we could offer too. Ultimately, the financials, logistics and vision aligned, and we all want to make this property very special for Mexico.”
Branded residences, like One&Only, Fairmont, Rosewood, The Ritz Carlton and others, will continue to be a sought-after commodity among buyers seeking either a full-time residence or vacation home. The benefits buyers, brands and developers reap will keep this trend alive. It will be interesting to see what’s in store for all parties as we head into another decade of branded residences.