Let’s start with this scenario:

You’ve been pretty good at life and prudently frugal, stashing away a low eight figure retirement and investing in a few Hail Mary start-ups that look like they finally might pay off.

Then, one day, you’re thumbing through your portfolio, and it hits you like a market crash: instead of spending another winter up north earning dividends sitting idly on stocks, why not buy a second (or third) home in, say, Panamá, Mexico or the Bahamas and bank that money sitting on the beach?

Brilliant.

But there’s a problem. Real estate isn’t your wheelhouse. Nor are international tax law or settling foreign property rights disputes—not to mention managing the logistics of owning and renting a residence in another country that you’ll only actually live in for a few months a year.

So, what do you do? Give up and go back to your portfolio? Not a chance. Success didn’t find you sitting on the sidelines.

Instead, you do what you’ve always done with big ticket, trophy purchases—like your Aston Martin Vantage, your wife’s gold Bulgari ring, or the $9,000 Armani cashmere coat that you just brought back from Rome: you stick with the premium, luxury brands you know and with whom you’ve already entrusted the most important decisions, events, and possessions of your life.

Fast forward two years.

It’s sunset on Mexico’s Riviera Maya. You pivot your chaise away from your penthouse infinity pool to face the mangrove lagoons, feeling the last sunrays filter through your Cartier Aviators. You’ve only been “home” for a few hours, having just caught the last flight out from up north before the next blizzard blew in. But you’ve already got your inner Jimmy Buffet going on.

After that epiphany moment two winters ago, you spend the next three months on Zillow, talking to real estate brokers in a half dozen different countries, and doing virtual and VR property tours. Eventually, you sell a few thousand Tesla shares and put a chunk of that down on a 3-bedroom, 4-bathroom penthouse at Fairmont Residences Mayakoba, one of four award-winning resorts tucked between Cancun and Playa Del Carmen in the 600-acre, gated Mayakoba development, which also includes a Rosewood, an Andaz, and a Banyan Tree.

Now, instead of slipping on black ice, you spend your winters lunching at the Fairmont’s private beach club while your wife goes to the spa. Your personal butler and concierge take care of everything else—like stocking the fridge before you arrive, reserving your tee time at Mayakoba’s PGA and LIV Championship course, and lining up Marine Turtle Camp activities for your grandchildren who arrive next week. And while the markets swoon, the direct deposits you earn from Fairmont’s turnkey vacation rental program keep rolling in monthly.

Welcome to the white-glove world of luxury branded real estate.

In the simplest sense, branded real estate isn’t anything new. Humans have been naming temples, churches, and government buildings after saints, kings, and war heroes since we first started building them.

In 1983, future U.S. President Donald Trump took the branded real estate concept to new levels of self-admiration by naming his mixed-use, Manhattan high rise, “Trump Tower”—eventually becoming the first developer narcissistic enough to name an entire portfolio of buildings around the world after himself.

Prior to that, the true origin of “branded” real estate most credibly dates back to 1927. That was when the Sherry-Netherland apartment hotel opened its doors on New York’s Fifth Avenue, leveraging the reputation of a trendy, eponymously-named restaurant a few blocks away to pique the interest of a newly minted, post-WWI upper class before the Great Depression.

The building also broke new ground with its “celebrity” architecture, the features of which nodded to iconic European landmarks, and the fact that each of its 14 floors was its own apartment, a hugely popular trend in the most expensive branded residential high rises these days for the UHNW (ultra high net worth), “I-don’t-want-a-neighbor” crowd.

Not surprisingly, the Sherry-Netherland is reported to have sold out faster than any other building in Manhattan since The Dakota on the Upper West Side 40 years earlier.

Today, branded residences seem like they’re cropping up faster than Amazon warehouses—partly because they’re often the newest, most expensive, and most architecturally iconic buildings on the block. But mostly because they are, in fact, cropping up everywhere. According to global real estate brokerage, Knight Frank, branded residences now account for approximately 10% of the total global luxury real estate market, with the Middle East (+120%) and Central and Latin America (+89%) poised to experience the fastest growth through 2030.

Another 2023 Research Report on Branded Residences by London-based brokerage Savills puts the number of total completed branded residential projects at 690 in over 70 countries as of mid-last year, amounting to more than 100,000 individual residences. 600 more branded development schemes are in the pipeline and expected to deliver by the end of the decade, including 42 in Dubai alone.

“Branded residences have been one of the consistent bright spots in real estate despite several cycles in the market over the past few decades,” says James Burdess, Head of Caribbean and Latin American Sales at Savills. “That says a lot about the model. It works.”

The model also works globally, adds Burdess. According to Savills’ 2023 Report, North America today now accounts for just over one-third of branded residence supply worldwide; not long ago, it accounted for all of it. For developers and brands, that means that there’s a long runway for growth.

At the same time, brand typology has accelerated too. Whereas over the past two decades most branded residential developments were monikered with name of a luxury hotel, like Four Seasons, St. Regis, Ritz-Carlton, or Aman—which developed the first hybrid hotel and residences in 1988 with Amanpuri in Phuket, Thailand—now it seems like every luxury brand is getting into the game.

First came fashion house Armani in 2007, in the Burj Dubai. Then Bulgari (2012), Baccarat (2015), and Fendi (2016). Next, the car brands jumped in: Porsche in 2017, Aston Martin this year, and Bentley projected to deliver in 2026—all three located in Miami. The sector now appears limitless, with restaurant brands like Nobu and Casa Tua currently manifesting their own curated “residential experience”.

None of this surprises Luis Durán, CEO of RLH Properties, Mexico’s leading branded real estate developer, which envisioned Mayakoba as well as One&Only Mandarina north of Punta Mita. Opened in 2021, Mandarina was recently ranked the #8 Hotel in the World for 2023 by The World’s 50 Best Hotels.

“The global rise of branded residences is fueled by a shift towards turnkey and seamless living, especially prominent in the luxury and ultra-luxury real estate sector,” says Duran of the surging sector. “And the trend continues to be elevated as buyers, particularly in second-home international markets, look to renowned hotel brands for quality assurance, security, rental income opportunities, and luxury lifestyle services.”

That it took so long for branded real estate to earn its own identity in the real estate industry in one sense is absurd. Luxury FOMO (“fear of missing out”) and price premiums in consumer branding have been leveraged for centuries. Witness Brooks Brothers (1818), Hermes (1837), Patek Phillipe (1839), and Cartier (1847).

At the same time, branded residences also solve a lot of real estate’s fundamental drags and downsides. So, when you talk to anyone in the space—from developers and brands to buyers and banks—they all come back to the same answer when asked about the value of a co-mingling real estate with a luxury imprint.

“It’s a win-win-win,” says Budy Attie, whose company, Durex Properties, is currently developing the 69-story La Maison residential high rise in Panamá City’s upscale Santa Maria neighborhood in partnership with Fendi. Attie has also developed YOO branded projects with world-famous designers and style icons like Philippe Starck and Marcel Wanders.

“For us, a brand like Fendi assures us of a great design that they will be proud of and will assure us that we will have mind-blowing amenities that merge with timeless architecture and interiors. We can also command a premium when we include so much luxury and so many social areas. For our buyers, you live so well serviced that you feel like a king or a queen. And for Fendi, we are the only building in Panama that offers this to high net worth buyers so there’s an aspect of prestige in addition to the visibility and financial incentive. It works for everyone.”

Branded real estate’s benefit to a buyer isn’t just about quality of life, however, RLH’s Duran adds. When you’re an expat from the U.S. or Colombia putting your hard-earned currency on the line, brand credibility, quality, and legacy buys trust as well.

“Buying real estate in a foreign country can be a deterrent for some homeowners,” says Duran. “However, when the home is backed by a world-renowned hotel brand like Fairmont or Rosewood, owners feel much more comfortable. They know they’re getting a certain level of quality in everything. They know there’s responsibility and recourse. Plus, owners have the opportunity to place their homes in the hotel’s rental program when they are not using them, which provides a way to earn passive income knowing that their investment is protected and professionally managed.”

Then, there’s the trophy status conferred by living in a 5-star hotel. It’s one thing to say that you winter in Miami Beach or Cabo San Lucas, Mexico. You’re in another class altogether if you can say that you live a floor below Cindy Crawford at the Four Seasons Residences when you’re there.

“There’s a power in brand-led destinations for our residents that you can’t find anywhere else,” says Kappner Clark, RLH Properties’ Chief Marketing Officer. “Part of that is the status that comes with the name, of course. But our residential properties also are all luxury hotel branded offerings that are based on integrated resort living.”

That means if you live in a place like the Fairmont Residences Mayakoba, in addition to access to your own hotel’s amenities like room service, private pools, and fitness centers, you also have access to the community amenities like Mayakoba’s 3-mile long nature trail, the sports courts, dive and watersports center, Mexican town square El Pueblito, the LIV championship golf course, and more than 30 restaurants and four spas, all fronting over a mile of pristine, uninterrupted Caribbean beach.

For the developers of branded real estate projects, like RLH Properties, the benefits of the model are just as multi-faceted.

In general, success in real estate is all about reducing uncertainty: the more variables that you can control and the further you can reduce the risk of experimenting with anything new, the more likely you are to not lose your shirt. Branded residences offer developers as close to a sure thing as you can get.

For one—as with jewelry, clothes, and cars—luxury, high-visibility brands attract loyal followings. In high-end real estate, that centrifugal gravity speeds up pre-sales and increases the certainty of selling out, even in the most competitive markets, both of which banks and lenders love.

Partnering with the right brand also translates directly into higher profits, though the design and construction costs of branded residential developments are higher as well. According to a recent study from Morgan’s International Realty, branded residences on average sell for 37% more than non-branded product. In Bangkok, where premiums are highest, brand buyers can pay up to 60% more. In Dubai, units at the Bulgari Resort and Residences are currently fetching a mind-curling three times the local market average.

Because of this, branded residences also hold their re-sale value better for longer, especially during downtowns in the real estate market (see “COVID-19”) since there’s always going to be a limited supply of them and they’re built on top of some of the most valuable pieces of land in the world. For branded residence developers—who more often than not continue to own the building, amenities, and public, retail and restaurant spaces—this resiliency hedges against flight risk and the odds that they’ll be anything less than sold out at all times because they’re a good investment for owners even when they’re not there.

“Branded residences provide peace of mind and predictability for buyers, which in turn provides peace of mind and confidence to developers,” RLH’s CEO Duran says of the upside of building branded real estate.

“It’s true that branded residences come with a price premium, and that’s good for developers. But that premium is also what provides more stable and predictable appreciation and guarantees trustworthy property management and professional rental management for buyers. Branded real estate adds value for both homeowners and building owners. It really is a winning solution for all parties.”

When it comes to the brands themselves, it would be easy to think that they’re just along for the publicity ride, all while cashing big, fat licensing checks along the way.

Yet, it’s actually a much more sophisticated calculus than that. For one, if you’re Fairmont or Lambourghini, you’re not about to shake hands and build a skyscraper with a developer who’s only built movie theaters before. Location is also essential. A world-famous developer who’s the perfect fit for you design and buyer-wise might only be sitting on land in cities and neighborhoods that are inconsistent with your essential identity—no offense, but Fendi’s probably not building their next tower in Philadelphia.

Brands that partner on residential projects with a hotel component also have to be prepared to manage operations and be integral in the design process. The Fairmonts, Rosewoods, and Montages of the world are built for this since they manage complex real estate projects every day. It’s a harder proposition for the Nobus and other non-hotel brands of the world since they have to jump into the game thrashing, hoping everyone’s convinced that they can pull it off.

Notwithstanding the risks, however, if a celebrity project comes knocking that looks like it fits, it’s becoming harder and harder for brands to say “no”.

“Luxury hotel brands benefit greatly from the growing demand for branded residences,” says Robert Morrice, Vice President of Accor One Living, which owns Fairmont. “Branded residence owners are some of our best brand ambassadors. They have a very personal brand connection having made the ultimate act of loyalty—purchasing a home. These HNW and UHNW owners also then begin to travel extensively throughout their brand network, in our case Fairmont Hotels and Resorts, and they quickly become regular guests wherever they travel. That’s not only good for our hotels in general, but also for Fairmont Mayakoba since residents essentially become real-life spokespeople for what it’s like to live the Fairmont lifestyle at a Fairmont Residence.”

All of that win-win-win said, branded real estate projects aren’t always sure things. Nothing in real estate is. In some ways, they can even elevate risk by making projects far more complicated and expensive than they need to be.

For example, branded real estate projects that include both a hotel and residential component take on average at least 4-5 years to conceive, fund, design, and deliver. A lot can happen in the meantime. Imagine, for example, being the developer who partnered with the now bankrupt crypto exchange FTX to build the first “Blockchain Tower”? Or having three years of your venture fund’s capital sunk into the design for “Theranos Village”? (Just kidding).

As a result, for the really ambitious, super luxe projects like Mayakoka or Mandarina to succeed, finding that “right fit” can take a while. It’s less of an owner-tenant relationship, says RLH’s Duran, and more like dating before marriage.

“We view our relationships with our hotel brands as a true, long-term partnership, so we keep that in mind when we start any selection process. As you can imagine, we are incredibly selective in our decision-making process. We believe we have the best properties in Mexico, and therefore we look for the highest caliber luxury and ultra-luxury brands to operate them. We seek hotel brands with global recognition, renowned legacies, and a proven innovative approach to hospitality, and who prioritize staying ahead of industry trends and technology, all of which help to create unforgettable guest experiences that enhance the appeal and value of our branded residences.”

In addition to the “who” when it comes to brand selection, the most expensive and exclusive branded residential projects are also as much about the “where”—because no matter how many amenities a development has or how prestigious the brand, if you can’t walk to the ski slopes, the beach, or the symphony downtown, it’s likely not worth the price premium in the first place.

“At RLH, we always look for properties that are within a direct flight of the United States first, which is our main market,” says CMO Clark. “We also look for properties with unique natural environments such as the canals and mangroves of Mayakoba or the mountainous jungle alongside the Pacific Ocean at Mandarina. Mexico's unique appeal lies in its idyllic locations, picturesque settings, and cultural richness, and our residential properties are intentionally located in settings with sensorial natural beauty that inspires a residential experience that is not just luxurious but also distinctly immersive. Our partnerships with globally renowned hotel brands add an element of exclusivity, sophistication, 5-star service, and international prestige on top of all of this.”

Which is the main reason that RLH pounced on Mayakoba back in 2017 as soon as they saw what it could become.

In the branded residence world writ large, Mayakoba is almost peerless for several reasons. Developed adjacent to a mile of white sand beach and coral reefs on one side and pristine lagoons and jungles on the other, the community’s nearly 600, contiguous acres comprise one of the world’s largest standalone branded residential properties (Mandarina is 636 acres).

It’s also home to the first and only PGA and LIV Tour golf course in Latin America, El Camaleón, a Greg Norman-designed masterpiece that will welcome the second annual LIV Golf Mayakoba tournament, the only LIV Golf event in Latin America, this year on February 2–4. No matter what you think of LIV, that’s no small deal. And it’s all you need to know about the cache of the course itself.

Mayakoba is also unique as a multi-brand community. Most branded residential properties, whether they include a hotel component or not, tend to be stand developments with a single brand identity. For some brands that makes sense. Tiffany only sells its jewelry, for instance, at its own eponymous stores. In real estate, at least in theory, going solo precludes competition by proximity.

Yet, in Mayakoba (as with Mandarina), RLH has succeeded in bringing four award-winning hotels together in a single community in a way that complements and enhances instead of cannibalizing. The Andaz, Banyan Tree, Rosewood, and Fairmont all offer their own vibe, lifestyle, amenities, and location—as well as their own branded private residences. Yet, each guest and resident also has access to Mayakoba’s 30+ world-class restaurants and high-design spas in addition to the scuba diving school, water sports center, beach clubs, and yachts. This, says Duran, is the essence of creating a branded lifestyle community instead of just throwing up some steel and glass and putting a name on it.

“Our dedication to luxury real estate development is centered on providing diverse and unparalleled experiences for our residents,” Duran continues. “So, while many developments typically align with a single hotel brand, we believe in the strength of collaboration with multiple distinct and prestigious brands who each bring their own unique offerings and complement one another. One of the reasons Mayakoba attracted us was because of the fusion of diversity and unity amongst the Andaz Mayakoba, Banyan Tree, Fairmont Mayakoba, and Rosewood Mayakoba hotels. The choice to partner with four different brands arose from a strategic vision to shape a singular destination that caters to the widest possible spectrum of preferences and lifestyles.”

In order to do that, RLH is continuing to build out Mayakoba with the surgically-discerning, modern buyer in mind, starting with a massive, multimillion dollar renovation of the Fairmont beach club and hotel. Concurrent with that, RLH is also refreshing the interiors of the existing Fairmont Residences Mayakoba, which currently consists of eight 4-floor buildings built in 2006, and developing four brand new 3 and 4-floor residential buildings, each comprising of six and eight residences respectively. The first of these new full-ownership buildings is set to be completed by March of this year.

As part of RLH Properties’ vision to consistently innovate, these latest Fairmont Residences offer fresh, contemporary design by the renowned Spanish interior design firm Room 1804. And in keeping with the RLH’s respect for context, both the design and architecture of the new buildings incorporate indigenous elements, reflecting the company’s commitment to local culture, history, and the environment.

What doesn’t fundamentally change or get redesigned during all of this, however, is the Fairmont essence itself, along with the service, attention to detail, and lifestyle that go with it—which is yet one more reason why buyers are willing pay 30% more to live in a branded residence in the first place: consistency over time.

“Founded in 1907, Fairmont brings more than a century of unparalleled hospitality to Mayakoba,” says CMO Clark of the legacy of the Fairmont brand. “As the first Fairmont General Manager I met said to me, ‘Fairmont means family’. And family means everything to RLH in terms of the community, lifestyle, and experience we are trying to create.”

As for branded real estate’s future, you don’t have to be a housing economist to probably get this one right.

Super swanky hospitality brands that have been in the space for a while, like Fairmont, Ritz-Carlton, and Aman, have nothing but runway ahead of them. The hotel brands still on the early side of really leaning into it, like One&Only, Montage, and Pendry, are similarly well positioned to take advantage of the doubling of the branded residence sector over the next few years.

On the brand front in general, no one professes to know where and when the ceiling will hit. Ten years ago, I laughed at the idea of jewelry and fashion brands taking the dive into the real estate space. Buyers and the market proved me wrong. More recently, in fact, I’ve come around to believing that—well-designed, built, priced, marketed, and operated—almost any new, high-end building in a good location can carry a luxury brand.

One thing, though, is for sure: what began as a slog some forty years ago is now a sprint. The competition among developers for the next best piece of land for the next game-changing branded development is going to get fiercer not only in Mexico, Latin America, and the Caribbean, but also globally. That means developers like RLH and others have to keep upping their games, their designs, and the lifestyles they empower.

“The evolution of hotel-branded real estate projects is an exciting journey for us that continues to be shaped by both successes and challenges,” says RLH’s Duran of the future. “It might sound cliché, but we love our clients because they really do push us to be better every day. We don’t see the branded residences trend slowing down any time soon and foresee a heightened focus on creating innovative and immersive experiences within branded residence communities, with an increased emphasis on sustainability, technology, and community engagement.”

For Mexico, Latin America, and the Caribbean, where real estate developments provide essential jobs, tax revenue, and the long-term spark for urban revitalization and resort development, that’s great news.

Gulfstream Residences with personal hangars and a private runway anyone?

Prices for new three-bedroom residences and three-bedroom penthouses at Fairmont Residences Mayakoba start at $2.19 million. Completed buildings are sold out for full ownership.

Co-Ownership (1/12 shares) of 3-bedroom residences and 4-bedroom penthouses at Fairmont Heritage Place start at $219,000 per share. 45 co-ownership residences are available.