Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 199

"Modern luxury is the ability to think clearly, sleep deeply, move slowly, and live quietly in a world designed to prevent all four." -Justin Welsh

Here's a question for you: Would you rather have the car of your dreams or would you rather live longer? (Maybe you don't care at all about cars and so this is an easy question, but bear with me, I'm sure you get the point.) This is a question that was posed to the audience at Elevate earlier this week and the entire room responded by saying that they would choose the latter. This is perhaps obvious. What good are material possessions if you don't have your health? But it's still an important frame of reference. And it's why Brazil-based developer AG7 , who was at the conference, has centered their entire practice around "building wellness." Forget the fancy brands . Their buildings are focused on one thing: to help you live better and longer. This, to me, is a compelling value proposition. Because I think there's an easy argument to be made that there's no greater luxury than our own health and wellness.

Cover photo by Alex Perri on Unsplash

For the last 16 years, I have been going on an annual ski and snowboard trip with some of my closest friends from Penn and from Toronto. Two years ago we went to Park City. Last year we went to Les 3 Vallées. And this winter we'll be going to Hokkaido, which has been on my bucket list for a very long time. I enjoy doing a lot of different sports, but nothing comes close to snowboarding for me. It's my first love. There's just something about being in the mountains. So I look forward to our "annual" all year.

Because of this, I have long had the goal of building a house and short-term rental in the mountains. Firstly, I felt that there weren't a lot of design-focused options in many mountain towns. You know, something clean and minimal. And secondly, I wanted a place that could embody and share our love of the mountains with others. As many of you know, this resulted in Parkview Mountain House . Globizen partnered with two regulars on the trip and we created what we refer to as a "creative retreat."

Here are a few photos of the house:

Today, I'm super excited to announce that bookings are now open at PMH! If you'd like to book a stay, you can visit AvantStay's website (who is our hospitality manager) or you can book through Airbnb , if you prefer that. Because we've just gone live, all of the rates are at an introductory level while we build up our initial review base. So now is a good time to get something in the calendar this winter (or next summer which is also a really beautiful time). Neat B and I, and a few friends, will be there later this month and we can't wait.

Cover photo by Alex Moliski on Unsplash

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.