More than 50% of Rosewood Hotels and Resorts’ existing portfolio and development pipeline include a branded residence.

Brad Berry, vice president of global residential development at Hong Kong-based Rosewood Hotel Group, said the decision to develop residential components starting in 2008 felt like a natural progression for the company.

"We have a narrative and an aesthetic with Rosewood that's very residential, so it was just very natural," he said.

Once guests experienced Rosewood's guestroom designs, they wanted their homes to emulate that, he said.

It was evident there was space for the branded residential business to grow. And it did.

Rosewood Hotels & Resorts has 14 Rosewood Residences open and operating that are situated within or directly adjacent to a hotel or resort. Eleven residences are currently in the pipeline.

"I've been involved in this business for many years, both on the developer side and the brand side in a variety of capacities and ... it's real estate at the end of the day, and that's a business that's going to go forever. This little nugget of that [real estate] business is really pretty special from a hospitality and hotel standpoint," he said.

In the past year, the company announced its new stand-alone residences include the Rosewood Residences Kamala in Phuket, Thailand; Rosewood Residences Naples in Naples, Florida; Rosewood Residences Lido Key in Sarasota, Florida; Rosewood Residences Hillsboro Beach in Hillsboro Beach, Florida; and Rosewood Residences Beverly Hills in Beverly Hills, California.

"The one thing that we have done is focus in the past couple years on the stand-alone [residences] business, which is a branded residential building or group of homes without a hotel. We can continue to see that growing as well. But we like both of those, whether it's a mixed-use or a stand-alone," he said.

They key components that Rosewood looks for in a branded residential deal are alignment with the development partners, a robust real estate and hotel market that needs luxury accommodations, and interest in the market from current owners.

Though the real estate business can be cyclical, Berry said: "If you stick with it in the long term, then I think people will benefit, and developers will benefit. We're in it for the long term."

Developers look to brands such as Rosewood for a track record of mitigating risk, creating confidence and generating demand, he said.

Berry said Rosewood doesn't have a preference between developing a stand-alone residence or one with a hotel, but a stand-alone allows the brand to enter in more "real estate markets" that aren't necessarily a great fit for a hotel.

"Or you could infill in a market where you already have an existing hotel ... in some of the big U.S. cities and European cites," he added.

There currently isn't a large supply of branded residences in Europe, Berry said, and Rosewood sees plenty of opportunity there in urban centers.

The challenge, however, is dealing with a larger amount of older buildings that come with zoning hurdles.

"It's exciting; we kind of have become a steward of these older, iconic buildings," he added.

The average development timeline for an existing building is two years, while a greenfield development can take up to five.

Rosewood will continue to focus on expanding in Asia and North America, and there is untapped potential for the brand in South America. The company has a residential and hotel in São Paulo, Brazil, that is performing well, he said.

As consumers continue to evolve and desire different experiences, it's worth considering creating separate spaces between the hotel and branded residences if it's all in one compound, Berry said.

He also recognizes that homeowner association costs often are put in a negative light.

"The industry has a bit of a bad rap that it's always going to be more expensive. Where we set ourselves apart from that is being able to deliver something that people want. When they see that value of what they're paying for, they like that. Be honest, up front and communicate [the costs] right from the beginning," he said.

Berry said he expects Rosewood's growth to maintain its current pace for now.

"I want to make sure [with] our business that we continue to deliver ... on the value proposition and curating opportunities for our owners that they can't live without," he said. "I think we really do a good job. Our owners see that, [it] gives them confidence to make those purchases or to stay with us. We don't take that for granted."

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