From Eloise's 'Tippy-Top Floor' To Yours: The Rise Of Branded Residences In A Changing Real Estate Landscape

Eloise, the young girl of storybook fame who lives in the "room on the tippy-top floor" of New York City's Plaza Hotel, has captivated children's imaginations since her creation in 1955.

And now that those children have become adults, many of them are purchasing opulent residences that have the cache of brands such as the Four Seasons, Ritz-Carlton or St. Regis. While many of them are attached to luxury hotels, others are associated with fashion brands such as Armani or Versace. Even former President Donald Trump is going for exclusivity with his Trump Tower properties in cities around the world.

Branded residences blur the lines between hospitality and homeownership. They offer a blend of opulent living and the service and prestige associated with luxury brands.

Though the branded residences sector is dominated by hotels, it's diversifying, and it's estimated that by 2030, nonhotel brands will account for 20% of the total supply.

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Dubai is the biggest hotspot for branded residences with 51 in operation, according to real estate firm Savills' report "Spotlight: Branded Residences — 2023." South Florida is a close second with 42 properties. Both markets appeal to international buyers seeking trophy assets and have seen significant growth in recent years.

 The Lure Of Branded Residences In Exotic Destinations

Other resort locations also are popular for branded residences, particularly those around the Mediterranean and the Caribbean. In the Caribbean, the Bahamas has the largest supply of branded residences with a 27% market share, followed by Cayman Islands at 26% and Turks and Caicos Islands with 23%, according to the Savills report. The supply is set to double from 23 to 44 branded residential properties and account for nearly 3,300 units by 2030.

Branded residences in ski markets also are gaining in popularity. They're following their clients from cities to beaches to ski-in, ski-out slope-side residences under brands such as Four Seasons, One & Only and Six Senses.

Properties that are affiliated with a luxury brand command premium pricing — an average of 30% higher — compared to comparable nonbranded residences available on the market.

In addition to attracting buyers who want to live in them, branded residences can be good investments because of the rental programs many participate in. Buyers can put their units into the program to offset service charges and other costs and generate income while they're not using their property.

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But some properties, especially those where high-net-worth individuals are owners, limit short-term rentals to maintain a sense of security, privacy and exclusivity.

If the owner of a hotel-branded property wants to participate in a rental program, it's likely they will have to purchase brand-approved furniture, fixture and equipment packages.

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