What do a luxury British carmaker, Italian fashion house and Michelin-starred French chef have in common in South Florida? They are among the more than a dozen luxury brands collaborating with developers to build luxury condominiums with features including personalized furniture, car elevators and private restaurants to lure more ultra-rich buyers to greater Miami.
While South Florida has for years been a hotspot of hospitality-branded and hotel-managed condominiums by virtue of its long-time status as a winter retreat for the wealthy, the new wave of residences bearing luxury consumer labels became increasingly common throughout 2024.
It’s an enticing proposition for companies looking to expand their marketing reach, to provide a new product for long-time customers or introduce their brand to potential buyers. As Miami and the wider South Florida area continue to draw in wealthy and high-profile company relocations, developers and brokers are betting demand exists for familiar brands offering a specific lifestyle, and the higher price tag associated with luxury products, services or experiences.
According to the most recent figures from the Miami Association of Realtors, condo sales over $1 million are up 3.5% year over year in Miami-Dade County, 31% in Broward County and 10% in Palm Beach County.
This year's expansion in property branding builds on nearly a century of hotel companies adding their names to private residences and condominiums around the world. New York City’s Sherry-Netherland Hotel is generally accepted as the first to do it as early as 1927, according to a report from global real estate marketing firm Graham Associates.
By mid-2023, Miami and the wider South Florida area were already home to 38 branded residential properties, most of them hotel-managed private residences, ranking second in the world behind Dubai, the report said. Globally, over 1,100 different branded projects were in the pipeline, with 80% of them coming from hotels.
“Now, in the last few years, because most of the hotel brands have done so well, other brands have started to move in on our territories,” said Adelina Wong Ettelson, the global head of marketing for residences for Mandarin Oriental Hotel Group, in an interview. “As this trend and industry evolved over the last two or three years and more and more people enter this market, it started to move down a little bit to a more experiential lifestyle play.”
That has led to a proliferation of new development in South Florida, with over a dozen different branded condo projects announced in 2024, including Mercedes-Benz Places, Pagani Residences, Jean-Georges Miami Tropic Residences, Dolce & Gabbana and several hotel-branded and managed properties. More are likely to be announced in 2025.
However, not all brands are created equal. Ettelson and other long-established hospitality players are skeptical whether their new competitors can provide the white-glove lifestyle service that wealthy buyers expect with their condo purchases.
“There’s so many other brands coming in that are maybe not really equipped or have the capacity to deliver the level of service that homeowners would really want from a residential building,” said Ettelson, a 17-year company veteran who is based in New York.
The company is working alongside owner and developer Swire Properties to demolish the aging Miami hotel and build the Residences at Mandarin Oriental on Brickell Key that will be serviced by the hospitality company.
Branding business
Brands getting involved in real estate development can secure hefty fees, typically a percentage of a project’s gross development value, to use their name on the project, presenting an opportunity to net a few more dollars.
“It’s a great business if you manage it properly,” said Edgardo DeFortuna, founder and CEO of Fortune International Group, a real estate development, investment and sales company.
DeFortuna is a well-known name in South Florida real estate development, and his company is synonymous with some of the region’s most luxurious condo projects. He is working alongside brands that include St. Regis, Faena, and Casa Tua, a Miami hotel and restaurant to build branded towers, each currently in different stages of development, and all collectively generating more than $3 billion in sales annually.
According to the report from Graham Associates, luxury hotel brands typically charge between 3.5% and 6% of a project’s development value, upper-upscale hotel brands demand between 2.5% and 5%, while non-hotel brands may ask between 1% and 4%.
“The only concern is how to control that the brand standards, whatever they are, are really implemented in the building and reflect what the brand stands for,” DeFortuna said.
Some brands get deeply involved in the development of a project while others just sign off on the naming rights, DeFortuna added.
Brands that bring their own interior designers, architects or unique vision to developments, typically hospitality companies, according to DeFortuna, are “great partners” that make branded properties a win-win for the brands and developers.
Bragging rights
But whereas hospitality-branded properties promise the same luxury and service as a faraway resort, consumer brands offer “a community of like-minded people that appreciate this brand, what it represents, what it creates, and what it does,” said Mikael Hamaoui, founder of Riviera Horizons and the developer of Pagani Residences, a proposed boutique condo project in South Florida that would be the first from the Italian supercar maker of the same name.
The boutique condo offers only 70 residences on the island community at North Bay Village, and the personal sign-off from Horacio Pagani on everything up to “the choice of kitchen stones and marble,” said Goritza Draskovich, a broker with Fortune Christie’s International Real Estate, the brokerage arm of Fortune International Group, and the director of sales for Pagani Residences. “That’s how much involvement from the brand we have now,” Draskovich said.
That means, in the case of branded condominiums from a car company, restaurants or fashion houses, buyers are getting a unique product that won't be accessible to the general public.
“You’re not incorporating hospitality in the sense of a hotel, but as an experience that is aligned with lifestyle,” said Jay Parker, CEO of Douglas Elliman Florida and president of the brokerage’s development sales division, in an interview.
Parker added that non-hospitality brands focus on the luxury and brand affinity component rather than emphasize the hospitality aspect, where hotels have historically been much stronger.
“You're playing off of a concept that resonates with luxury, but it's much less about the hospitality," Parker said. "It's much more about brand affinity, the affiliation and marketing strategy.”
While hotel brands may have an easier time providing those private residential services, the exclusivity that non-hotel brands bring to their projects through residential clubs provides their own draw, said Parker, who is helping to lead sales at Villa Miami, a 56-story tower that is the Major Food Group brand's first foray into luxury real estate.
Future residents of the copper-clad tower are expected to have access to unique perks from the New York restaurant group, including a private residential club, waterfront restaurant, grocery services and private cooking classes.
“Major Food Group has done such a good job at perpetuating a caliber of lifestyle, whether it's through their private club carbon, their dining experience, or all of their affiliated restaurant lifestyles. When you bring that into a club, into a residential experience, you're confirming to that buyer that their life at Villa will be aligned with the caliber of living,” Parker said.
Potential brand burnout
Though it seems that South Florida developers continue to propose and break ground on branded projects across the region, there’s a growing conversation about whether the buyers for these condominiums, particularly for untested non-hospitality brands, will remain as compelling as they have over the course of the past year.
In just Miami-Dade County, there are 13 branded properties under construction. As they open over the next two to three years, residents will have to decide whether the services they’re being provided are worth the price.
For example, at Porsche Design Tower in Miami Beach, monthly homeowner association fees range from between $4,277 and $12,069, according to CoStar Group's Homes.com. The tower with a private car elevator opened in 2017, marking the luxury car brand's first residential project.
Making things more complicated, the number of deep-pocketed buyers moving from high-cost states to South Florida has started to moderate. As of October, the number of relocations to South Florida from the Northeast and California was roughly 20% below the elevated levels seen in 2022, according to the Florida Department of Highway Safety and Motor Vehicles.
“I think there’ll be a correction in the market," said Ettelson with Mandarin Oriental. "You will see more and more of the strong players get stronger and bigger, and then I think you'll see some drop off and some of the peripheral players ... I don't know if they'll even ever come to fruition."
“As you know, in development, it doesn't always happen. They could say that it's coming. And then ... they couldn't quite make it work,” said Ettelson.