The luxury housing market is slumping, but household names in hospitality are keeping some new residences on an upswing.
There were nearly 39,000 branded residences across more than 200 developments in the United States last year, according to Savills data reported by the Wall Street Journal. The figures mark a 40 percent increase in such residences since 2010.
Buyers pay an average 30 percent premium for the hotel-branded residences, which include services, like in-room dining, housekeeping, babysitting and butler service, Savills director Rico Picenoni told the outlet.
Many branded residences are affiliated and co-located with hotels, but some companies outside of hospitality are branching out into developing their own branded residences, including Italian fashion label Diesel and luxury car brand Bentley.
South Florida has become a major hub for branded residences. At the start of the year, there were more than two dozen such condo projects in the planning states or under construction in the region, mostly in Miami-Dade County.
Developers pay branding fees, which can range from 3 percent to 8 percent of sales, but name recognition can be a boost to developments even before construction begins, Craig Studnicky, CEO of ISG World previously told The Real Deal.
The brand’s involvement could mean spending more on the residence’s design and construction, but means the developer “can sell these for more money than the project next door,” Studnicky said.
On the Boston Harbor waterfront, developer Jon Cronin has sold more than half of the units at a standalone St. Regis Residences. While the average luxury condo in the neighborhood went for $1,654 per square foot last year, according to Miller Samuel, Cronin sold a unit last month for more than $4,000 per square foot.
Montage International last year posted a company record $1.1 billion in branded residence sales, up from $800 million a year earlier; the company sells homes attached to Montage and Pendry luxury hotels across the continent.
More of these types of residences keep popping up. Rosewood Hotels & Resorts partnered last month with One Turtle Creek on a high-rise condominium two blocks from the Mansion on Turtle Creek Hotel in Dallas. Prices will start at $3 million and amenities will include a rooftop swimming pool and lounge, fitness center, library, dedicated dog park and private dining room.
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