Branding drives condo sales
Developers and marketers strive to associate their buildings with well-respected brands.
NEW YORK (CNNMoney.com) -- These days, everyone and everything wants to be branded - including condo developments. The proper branding association adds instant recognition, cachet and, probably, value.
"Branding real estate is something we really believe in," says Michael Shvo, founder of SHVO, a marketer of condo projects all around the United States. "The market today has evolved. People need a reason to buy real estate."
During the boom, the condo development industry had a "Field of Dreams" quality: Build it and they will buy. No longer. Now many condo projects are languishing.
"What's sitting on the market is bland, cookie cutter properties," says Arthur Gallego, communications VP for SHVO.
Branding is, of course, ubiquitous in many aspects of life. Marketers work hard to get the public to think of their brands. Style-conscious Americans may only drive a BMW, drink Evian water and dab themselves with Chanel Number Five. Shvo says Americans identify with brands as never before.
"What they wear, where they live is what they are," he says.
Shvo says he won't even take on a job marketing a property unless the developer agrees to brand it. His staff who all hail from the luxury brands industry, generally spends eight weeks or so researching and deciding on what brand would work best with the particular project.
And it doesn't matter to Shvo whether the market is booming or busting.
"You want to do this in every market," he says. "In bad markets, you'll sell when nobody else does. In good markets you'll get a substantial premium on the market price.
Branding, though, can be tricky. For one project in the New York financial district, Shvo and the developer decided to partner with Armani Casa. He reasoned that the location in Wall Street would attract the hard charging trader types and that Armani's muscular design sense would attract that kind of buyer.
For another condo building in hipper, more bohemian Chelsea, Shvo enlisted the skills and name of jewelry designer Jade Jagger, daughter of Mick and Bianca.
Many times the condo developer is the brand. That's why Trump puts his name on every project he's involved with. Other developers, not so notorious, have to borrow their branding from other sources.
The project can take its branding from its location, next to a park, a square or a district of the city. It can add sheen to its image by incorporating a name restaurant or health spa. More rural condos may associate with famous golf course designer such as Jack Nicklaus or Greg Norman.
One of the more direct branding connections is through a strong fashion designer, who can bring an idiosyncratic look to the building. And, of course, some architects have celebrity enough to act as a brand for a property.
The developer must follow through on the projects quality; a bad building must be worthy of its brand. Finishes and amenities have to be first rate and the services provided extensive. The brand partners wouldn't want to associate with a downscale production.
More common, less cachet
And, if every property is branded, the advantage of having a brand will vanish. Jonathan Miller says that has already started to happen in New York.
"One of the things that has happened is that virtually every building now has a brand associated with it," he says. "I don't think that differentiates it anymore."
He makes an exception to that generalization for buildings like 20 Pine, where the execution was particularly sharp and the branding "put the property on the map."
And in other cities, according to Miller, where branding is not as ubiquitous, it still can provide some sort of premium, one, he believes is very difficult to put in dollars and sense, however.
If branding is becoming overdone, it will be interesting to see what the next step developers take to set their properties apart.
"That may be a more practical luxury," says Miller, "more substance than style."