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Every project in Miami is now a branded residence. This is not exactly true. But it's mostly true. What I heard over the last two days at Elevate is that Miami is the second most active city in the world when it comes to branded residences (after Dubai).
So much so that when a developer sits down with a prospective sales team, one of the first questions they will ask is, "cool, so what's the brand?" Is it Elle? Dolce & Gabbana? Or Pagani? You need a brand. And on average, the end pricing premium is somewhere between 20-30%, in exchange for paying a 3-5% licensing fee (on total revenue).
This makes sense. Brands have value. And I agree with Daniel Langer -- who presented at the conference -- that there is "added luxury value" when it comes to brands that are truly premium and luxury. It's the only way to explain why certain goods & services command a premium. Consumers don't generally pay more for something for the hell of it. They pay more because they believe that they are getting more value.
One interesting example that Daniel gave is a research study involving two groups of people looking at basically the same photo of a woman getting of a car. The only difference is that in the first photo, she is getting out of a Volkswagen, and in the second photo, she is getting out of some fancy car. I can't remember which one, but just know that it's fancy and expensive.
Now, the two groups had no idea this was a study related to "luxury" and they had no idea there was another group and photo, but when comparing the results, the differences were measurable. The fancy car improved perception of the woman in virtually every dimension: she was thought to be more competent, intelligent, attractive, and the list goes on. This is interesting. It demonstrates that brands matter.
So again, it's no surprise that developers are "borrowing" hotel, fashion, car, and many other brands to strengthen the perceived value of their projects. It makes economic sense. But at the same time, I think there are different ways to go about this and I worry about the long-term value and resiliency of some of these branded projects.
For example, in some cases, the brand just seems like a superficial add-on to an otherwise banal project. And in these situations, it may work out for the developer in the short term, but at some point, people will come to the realization that there isn't actually anything differentiated.
To do it well, you want the brand to permeate the project and you need it to survive after completion. This is why hotel brands are a natural fit and what started this category -- they have property brand standards and they are typically there after construction is complete and the building is operational.
There's also the peculiarity that in, adopting a branded residence approach, the developer is by default relegating their own brand to a backseat position. And so there are developers, including one panelist at this conference, who flat out reject this approach -- they want to manage, control, and grow their own brand, not somebody else's.
This is a reasonable approach, but it's a longer game. Brand equity isn't built overnight; it takes time and consistency. Not every developer has the benefit of being in this position, or maybe they don't care to be. They want to remain entrepreneurial and nimble and just tool up on a project-specific basis.
So I guess the answer to the question of whether to brand or not is that it depends on your approach and on how you execute. But regardless, know that this is a massive business and that Miami is one of the branded residence capitals of the world. In the most desirable submarkets, it certainly feels a lot like table stakes.
We just received a bunch of photos back of our Junction House Sales Gallery. So today is photo day on the blog. (Thank you
We are all selfish bastards when it comes to sharing road space and public space.
When we drive, we complain about pedestrians jumping out in front of us, crazy cyclists who get in our way, and under-utilized bike lanes that are taking away valuable driving space and creating traffic jams.
When we take surface transit (such as buses and streetcars), we want all the cars out of the way so that we can move more efficiently. And we complain about drivers who don’t stop to let us off and on when the streetcar doors open. (Toronto specific reference.)
When we cycle, we complain about cars parked in the bike lanes, people who don’t look before changing lanes or opening their car doors, and drivers who honk at you because they just want you off the road and onto the sidewalk.
And when we walk, we complain about cyclists who ride on the sidewalk (they should be on the road!), cars that don’t stop to let us go, and slow walking groups who linearly block the entire sidewalk so you can’t pass.
We are never happy. And we automatically assume that we could do it better. (I know I’m guilty of this.)
But here are a few things to consider the next time you’re flipping the bird to someone on the streets. Here are a few things that we do know about urban mobility.
There is an unprecedented number of condominiums in the development pipeline right now in Toronto. For argument’s sake, let’s assume 75,000 condominium suites – many of which will be built in central areas of the city.
At a parking ratio of 0.6 stalls per unit, which isn’t an unreasonable assumption today, that’s 45,000 new parking spots and potentially 45,000 new cars in the city.
If you think that 45,000 new cars will be able to get fully absorbed into the core and somehow move around in an unfettered way, then I believe you are mistaken.
If you think that there’s something that can be done to magically expand road capacity to handle all of these additional cars in the city, then I believe you are mistaken.
And if you think that adding a bike lane is the only reason you are currently stuck in traffic, then I believe you are missing the bigger picture.
Over a decade ago, we made a decision in this region to encourage building up, instead of building out. And along with that decision came a necessary rethink of how we get around. That transition is what we are living through right now.
The other thing we know is that the 4 modes of mobility that I started this post with are ordered from least sustainable to most sustainable.
Electric self-driving vehicles will reduce the impacts of driving, but it will also transform it into something that feels more like transit and less like the driving we know today. That will be a very good thing.
But I’m not yet convinced that it will solve all of our problems. To do that I think we will need to adopt a much more balanced and unselfish view of what it takes to move around a city. That, of course, isn’t always easy.
Every project in Miami is now a branded residence. This is not exactly true. But it's mostly true. What I heard over the last two days at Elevate is that Miami is the second most active city in the world when it comes to branded residences (after Dubai).
So much so that when a developer sits down with a prospective sales team, one of the first questions they will ask is, "cool, so what's the brand?" Is it Elle? Dolce & Gabbana? Or Pagani? You need a brand. And on average, the end pricing premium is somewhere between 20-30%, in exchange for paying a 3-5% licensing fee (on total revenue).
This makes sense. Brands have value. And I agree with Daniel Langer -- who presented at the conference -- that there is "added luxury value" when it comes to brands that are truly premium and luxury. It's the only way to explain why certain goods & services command a premium. Consumers don't generally pay more for something for the hell of it. They pay more because they believe that they are getting more value.
One interesting example that Daniel gave is a research study involving two groups of people looking at basically the same photo of a woman getting of a car. The only difference is that in the first photo, she is getting out of a Volkswagen, and in the second photo, she is getting out of some fancy car. I can't remember which one, but just know that it's fancy and expensive.
Now, the two groups had no idea this was a study related to "luxury" and they had no idea there was another group and photo, but when comparing the results, the differences were measurable. The fancy car improved perception of the woman in virtually every dimension: she was thought to be more competent, intelligent, attractive, and the list goes on. This is interesting. It demonstrates that brands matter.
So again, it's no surprise that developers are "borrowing" hotel, fashion, car, and many other brands to strengthen the perceived value of their projects. It makes economic sense. But at the same time, I think there are different ways to go about this and I worry about the long-term value and resiliency of some of these branded projects.
For example, in some cases, the brand just seems like a superficial add-on to an otherwise banal project. And in these situations, it may work out for the developer in the short term, but at some point, people will come to the realization that there isn't actually anything differentiated.
To do it well, you want the brand to permeate the project and you need it to survive after completion. This is why hotel brands are a natural fit and what started this category -- they have property brand standards and they are typically there after construction is complete and the building is operational.
There's also the peculiarity that in, adopting a branded residence approach, the developer is by default relegating their own brand to a backseat position. And so there are developers, including one panelist at this conference, who flat out reject this approach -- they want to manage, control, and grow their own brand, not somebody else's.
This is a reasonable approach, but it's a longer game. Brand equity isn't built overnight; it takes time and consistency. Not every developer has the benefit of being in this position, or maybe they don't care to be. They want to remain entrepreneurial and nimble and just tool up on a project-specific basis.
So I guess the answer to the question of whether to brand or not is that it depends on your approach and on how you execute. But regardless, know that this is a massive business and that Miami is one of the branded residence capitals of the world. In the most desirable submarkets, it certainly feels a lot like table stakes.
We just received a bunch of photos back of our Junction House Sales Gallery. So today is photo day on the blog. (Thank you
We are all selfish bastards when it comes to sharing road space and public space.
When we drive, we complain about pedestrians jumping out in front of us, crazy cyclists who get in our way, and under-utilized bike lanes that are taking away valuable driving space and creating traffic jams.
When we take surface transit (such as buses and streetcars), we want all the cars out of the way so that we can move more efficiently. And we complain about drivers who don’t stop to let us off and on when the streetcar doors open. (Toronto specific reference.)
When we cycle, we complain about cars parked in the bike lanes, people who don’t look before changing lanes or opening their car doors, and drivers who honk at you because they just want you off the road and onto the sidewalk.
And when we walk, we complain about cyclists who ride on the sidewalk (they should be on the road!), cars that don’t stop to let us go, and slow walking groups who linearly block the entire sidewalk so you can’t pass.
We are never happy. And we automatically assume that we could do it better. (I know I’m guilty of this.)
But here are a few things to consider the next time you’re flipping the bird to someone on the streets. Here are a few things that we do know about urban mobility.
There is an unprecedented number of condominiums in the development pipeline right now in Toronto. For argument’s sake, let’s assume 75,000 condominium suites – many of which will be built in central areas of the city.
At a parking ratio of 0.6 stalls per unit, which isn’t an unreasonable assumption today, that’s 45,000 new parking spots and potentially 45,000 new cars in the city.
If you think that 45,000 new cars will be able to get fully absorbed into the core and somehow move around in an unfettered way, then I believe you are mistaken.
If you think that there’s something that can be done to magically expand road capacity to handle all of these additional cars in the city, then I believe you are mistaken.
And if you think that adding a bike lane is the only reason you are currently stuck in traffic, then I believe you are missing the bigger picture.
Over a decade ago, we made a decision in this region to encourage building up, instead of building out. And along with that decision came a necessary rethink of how we get around. That transition is what we are living through right now.
The other thing we know is that the 4 modes of mobility that I started this post with are ordered from least sustainable to most sustainable.
Electric self-driving vehicles will reduce the impacts of driving, but it will also transform it into something that feels more like transit and less like the driving we know today. That will be a very good thing.
But I’m not yet convinced that it will solve all of our problems. To do that I think we will need to adopt a much more balanced and unselfish view of what it takes to move around a city. That, of course, isn’t always easy.
Here's the front "gallery" area. The artwork hanging on the wall is by local artist, Leeay Aikawa. Her work is terrific. You can see this space as you walk along Dundas Street West.
Here is the model suite pavilion and main reception area (evening shot). The bar area is absurdly long. It was designed to accommodate beers from Indie Ale House down the street.
Dialogue 38, the designers of the space, really wanted the model suite to be a "pavilion" -- something akin to Mies van der Rohe's Barcelona Pavilion. So here's the ramp that takes you up and inside.
Finally, here's the model suite. The kitchen is by Scavolini. And the backsplash is a penny tile.
The sales gallery is located at 2720 Dundas Street West and is now open every day of the week except Tuesdays. The hours are 1PM to 7PM during the week and 12PM to 5PM on the weekends.
Here's the front "gallery" area. The artwork hanging on the wall is by local artist, Leeay Aikawa. Her work is terrific. You can see this space as you walk along Dundas Street West.
Here is the model suite pavilion and main reception area (evening shot). The bar area is absurdly long. It was designed to accommodate beers from Indie Ale House down the street.
Dialogue 38, the designers of the space, really wanted the model suite to be a "pavilion" -- something akin to Mies van der Rohe's Barcelona Pavilion. So here's the ramp that takes you up and inside.
Finally, here's the model suite. The kitchen is by Scavolini. And the backsplash is a penny tile.
The sales gallery is located at 2720 Dundas Street West and is now open every day of the week except Tuesdays. The hours are 1PM to 7PM during the week and 12PM to 5PM on the weekends.
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