After 16 years of hauling suitcases to the Four Seasons Resort Nevis, Ivan and Ann Highley-Gergel of Philadelphia no longer need to pack for vacations at the Caribbean island resort.
About a year ago, the Highley-Gergels paid around $3.5 million for a furnished, four-bedroom villa that comes with a pool and a cottage and is operated by Four Seasons, allowing them to keep the bathing suits, flip-flops and tennis rackets at their otherwise turnkey vacation home.
“It is wonderful not to have to put bags in the hold” of an airplane when they head south, said Dr. Highley-Gergel, 58, a psychiatrist, in a telephone interview from the island residence where he and his wife are spending a month this winter.
The Highley-Gergels had sworn they would never buy a vacation home because of “the hassle,” but the convenience of buying at a branded development convinced them otherwise. From their private house, they have access to all the resort’s facilities, plus 24-hour security, room service, home maintenance and weekly cleanings.
“We originally came here because we loved the Four Seasons,” Dr. Highley-Gergel said, adding that the couple “was looking for somewhere with a kids’ club,” for their two younger sons, then 5 and 7.
The Highley-Gergels are among a growing number of Americans buying residences in brand-name resort properties, mostly in the Caribbean and Latin America. Elsewhere around the world, international buyers are snapping up easy-to-lock-up-and-leave, high-rise residences under hotel banners like Mandarin Oriental, Marriott, Ritz-Carlton and W, in cities from London to Barcelona to Bangkok.
According to a Knight Frank “Global Branded Residences — 2019” report, branded residences are “growing exponentially and can now be found in almost every major city and major holiday destinations,” with more than 400 mostly hotel-branded residences in 60 countries.
The Four Seasons, which opened its first homes in 1985, in Boston, manages about 4,000 residential units at 41 properties in 19 countries. In the next five years, its portfolio is expected to grow to more than 7,000 homes, said Paul White, president of residential at Four Seasons Hotels and Resorts. More than 80 percent of all projects in its pipeline include a residential component, and eight of the nine new resorts scheduled to open this year will include residences for buyers who want to call Four Seasons their home.
“It allows people to go from dating us to marrying us,” Mr. White said.
In London, for instance, buyers looking to tie the knot with Four Seasons can do so at Twenty Grosvenor Square, A Four Seasons Residence, the hotelier’s new stand-alone project with 37 private residences, a wine cellar, spa, pool, game room and business center, amid private landscaped gardens in the high-end Mayfair neighborhood. About a mile away, the Residences at Mandarin Oriental Mayfair, with 80 luxury apartments, housekeeping and a rooftop bar, are slated to open in 2021.
Liam Bailey, a partner and global head of research for Knight Frank, said that when someone decides to buy overseas, “you are stepping outside your comfort zone. People find that quite a big step to take.”
By buying a home with, say, St. Regis or Ritz-Carlton, “you buy into a global brand,” Mr. Bailey said, one able to offer guidance on purchasing real estate in an unfamiliar country with unfamiliar tax laws and regulations. For those buying something that is still under construction, it instills confidence that the developer will deliver a completed product.
It also makes leaving easier. “You are buying management, ultimately,” Mr. Bailey said. “When you lock up and leave and go back to your main residence, you know the property is maintained and looked after. You know they are looking after who is coming in and going out.”
Mr. White noted that buying an overseas home under the marquee of a familiar brand also assuages buyers who may be nervous about immersing themselves in a foreign culture.
“Americans aren’t the most adventurous travelers in the world,” he said. “Safety and security are becoming more important.”
The model has become so popular, in fact, that brands beyond hotels are also attaching their luxury images to residential developments. The Italian jeweler Bulgari now offers residences in London and Dubai. French crystal maker Baccarat operates 60 homes in its Manhattan hotel. Fashion house Fendi is developing 41 Fendi Private Residences in Scottsdale, Ariz. At the Porsche Design Tower in Sunny Isles Beach, Fla., residents can park their cars next to their apartments — even on the 50th floor. And just a few blocks away, 260 luxury residences are nearing completion in the 60-story Armani Casa tower.
All that comes at a price.
“If you have two developments sitting side by side and one has a recognizable global brand, it sells a bit faster, and at a premium,” said Rod Taylor, director of international residential developments for Savills London. “People are buying a brand they recognize. If they don’t know a town or a city very well, but they see a Four Seasons or a Mandarin, it gives them that warm, comfy feeling that they can actually go ahead and buy.”
Simon Jacobs, an investor from Manhattan, long considered buying a vacation home in the Caribbean, but he didn’t know where. He was after something with a beachfront, and that was reachable via nonstop flight. “I didn’t want to have to deal with any of the issues,” he said.
After checking out possibilities in Anguilla, St. Barts, Barbados, and Turks and Caicos, Mr. Jacobs, 58, his wife Eliana and their two daughters found their dream island home during a Christmas 2015 stay at Sugar Beach, A Viceroy Resort, which is built on an old sugar plantation on St. Lucia and offers privately owned, one- to four-bedroom residences.
“These new residences they were building were right on the beach and there weren’t dozens of them,” Mr. Jacobs said. They were set between the Piton mountains and the Caribbean Sea, and he had “never seen anything that was that beautiful.” They could also be rented out through the Viceroy hotel system when the family wasn’t there.
That May, he paid about $8.25 million for one of the hotel’s five new contemporary beachfront residences, personalizing the 4,200-square-foot house with a double-height living and dining room, a media room and a closet to store snorkeling gear. Since the house was completed a year ago, the Jacobses, who also have a weekend home in Connecticut and summer in Europe, have only been there a few times.
“You use it when you want it, and when you don’t want it, it is available,” Mr. Jacobs said, noting that the rent he collects offsets his homeowner fees. “You get income. You have no ownership cost.”
The Jacobses plan to return at the end of February and again in late March. “It is rented through the summer,” Mr. Jacobs said. “It’s part investment and part nice to have a house to come to that’s your own.”
Penny Strawson, the property director of Sugar Beach Residences, said many owners — typically those looking forward to retirement — rent out the houses “a great deal to start with and then use them more as they reach retirement. They made their return.”
But as sales volume rises at branded communities, the average age is falling. Mr. White, of the Four Seasons, said buyers were “younger than expected,” spanning several generations. At resort properties, multigenerational clients are important. “We will see a family buy a residence and bring the grandparents and kids along and use it as a vehicle to build a great legacy and memories,” he said.
Sagar Desai, the global head of acquisitions and development for Viceroy Resorts, said condo hotels and resort residences started as a way “to help developers financially engineer their deals,” then “morphed into a very unique way to satisfy the needs of guests” who wanted to own homes. Viceroy is currently building residences at new resorts in Panama, Portugal and Mexico.
The communities “make it effortless for you to buy something,” Mr. Desai said. “You don’t have to worry about calling the landscaper.”
Often, buyers are looking for more than swimming pools and spas. The Four Seasons Palazzo Tornabuoni, popular with Americans and Canadians, houses 37 apartments in a restored 16th-century palace in Florence, Italy, and offers a calendar of lectures and events (wild boar hunting, anyone?) “which you generally wouldn’t find in a residential complex in that location,” Mr. Bailey said. Homeowners also are offered tours to other cities and towns, to help them engage with local culture.
Tim Grisius, the global real estate officer of Marriott, which owns Ritz-Carlton, St. Regis, Starwood, W and 10 other luxury and premium brands, said their residential business started about 20 years ago with a Ritz-Carlton residence conceived mostly as a way to grow the company’s hotel portfolio. Now, Mr. Grisius said, “The residential business has become substantial enough that it has become a nice business on its own.”
Marriott currently has 11 stand-alone residential projects in the works — from a Ritz-Carlton in Singapore to a St. Regis in Dubai and a Marriott in Cairo — as well as eight others in the pipeline. While the residential business used to be largely in the United States, 40 percent is now international, with 80 percent of the pipeline outside the U.S.
“Globally, we are seeing a significant portion of luxury hotels including a residential component because they work really well together,” Mr. Grisius said.
When the Trump Organization launched its Trump International Realty brokerage in 2012, its first project in South America was a luxury residential tower in Punta del Este, a resort area in Uruguay. The building, slated to open in 2020, is not owned by Trump but will bear his brand. About 84 percent of about 160 units have been sold, and the first condos are expected to close by the end of 2019, said Juan Jose Cugliandolo, chief executive of YY, the developer. The Trump Organization currently has 10 properties completed or in development, according to a 2018 report on branded residences by Savills, which lists the organization as the 11th-largest individual residence brand worldwide.
As a wider range of brands enters the market, offerings are also being expanded to include people who are not phenomenally wealthy. In 2017, Andrew Ashcroft, a developer, approached Marriott about making Alaia, a 155-unit complex on the barrier reef of Belize’s Ambergris Caye, part of the chain’s Autograph Collection.
“I still want my sense of style, but the power of the Marriott brand,” he said. “Everyone wants to own a piece of paradise,” he said, “but it is a big decision to buy real estate offshore.”
Slated to open next year, the complex will include studios at $199,000, one-bedrooms at $419,000, two-bedrooms for $649,000, three-bedrooms for $799,000 and eight beachfront villas priced at $1.3 million. Twenty-five percent of inventory is sold, Mr. Ashcroft said, and 85 percent of the buyers are American.
“If you go to more expensive markets, like Turks and Caicos, $1.3 million will get you a one-bedroom in a tower,” he said. In Belize, “$1.3 million will get you a three-bedroom villa walking out onto the beach.”
Four Seasons also has its eyes on Belize, developing 85 residences as part of a new complex on Caye Chapel, a 280-acre private barrier island, slated to open in 2021.
Even as international locales explode in popularity, though, the Savills report notes that the U.S. remains by far the largest market for branded residences, with 32 percent of the globe’s supply. Four years ago, Mark and Tori Smith of Denver purchased a 3,500-square-foot, three-bedroom condo for $3.5 million at the Dorado Beach Ritz-Carlton Reserve, in Dorado, Puerto Rico. When Hurricane Maria hurtled toward the island two years later, the Smiths left before it landed, worried they might lose their investment.
“I have never lived in an area where I had to worry about hurricanes,” said Mr. Smith, 64, the owner of a wealth management firm. “When this hurricane was coming, my wife said this place is built to be bombproof. We lost two ceiling fans on the outside and some water in the windows, but they didn’t break.”
They got lucky. The resort suffered extensive damage and the hotel was closed for about a year, but the residents were allowed back when utilities were restored. Last October, Dorado Beach reopened with more than 300,000 new plantings and expanded facilities.
Although the Smiths return to Denver every month, they spend a total of five months and a day at the Dorado — the minimum required to call Puerto Rico their permanent residence.
Mr. Smith said he would have been happy had they selected “a high-end condo with first class services,” but the Ritz-Carlton “has always carried a brand name in terms of quality and service and ambience. That had an appeal to us.”
Published at Fri, 22 Feb 2019 20:16:13 +0000