St. Regis project in Rye reflects value of branding during crises
Edelman, the world”™s largest public relations firm with about 6,000 employees and revenue estimated in 2019 at $900 million, has issued a new report, “Brands Amidst Crisis.” Edelman certainly knows brands, having counted among its clients Microsoft, Starbucks, Samsung, Heinz, Sara Lee, Brunswick Bowling and countless other household names.
Richard Edelman, son of the late company founder Dan Edelman, wrote, “This could be the most complex time ever for brands. We are enduring three interconnected crises: the global pandemic, economic downturn and systemic racism. The U.S. election has exposed the deep fault lines in society leading to populism and protest. The result of these simultaneous shocks is a rapid escalation of fears and a reordering of values that is driving people to the trusted and familiar.”
The company conducted a survey during the last week of October of 8,000 people in eight countries ”“ Brazil, Canada, China, France, Germany, India, United Kingdom and the U.S. It found that fear levels have risen and become more closely related to the pandemic and these include concerns about finance and status, including anxiety for their family”™s welfare and security.
It found that brands that alleviate fears are trusted four times as much as others and that 75% of consumers who highly trust a brand are loyal to that brand.
“It is time for brands to lead, answering fears with facts, trauma with truths, anxiety with action,” Richard Edelman wrote.
An example of a strong brand helping to influence buying decisions during the current multiple crises can be found in the St. Regis Residences, Rye, a development of 92 luxury condominiums under construction at 120 Old Post Road. Prices for the units begin at $1,065,000 and at least one resident in each unit must be at least 55 years old. The development has been designed to offer a lifestyle comparable to the luxury embodied in the St. Regis brand, built on the history and image of the hotels.
There are five interconnected buildings at the Rye project that feature one-, two-, three- and four-bedroom units along with amenities, services and even an underground heated parking garage.
According to Alan Weissman, president of developer Alfred Weissman Real Estate, more than 50% of the units have been sold and the on-site sales office has been moved to downtown Rye at 38 Purchase St. A formal opening date for the project has not yet been announced.
“We are very pleased with our sales activity over the past several months. At our current pace, we are succeeding our sales targets,” Weissman said.
The St. Regis brand is owned by Marriott International Inc., which has 30 brands, including Ritz-Carlton, Le Méridien and Sheraton. According to a filing with the Securities and Exchange Commission, at the end of the third quarter of 2020 it had 7,579 properties worldwide. At the end of 2019 it was operating in 134 countries.
The Bethesda, Maryland-based company has been active in the branded residences field, working with real estate developers such as Weissman to create projects in localities reflecting the quality of its brand names and then managing those properties.
“We have a very strong branded residential business at Marriott,” Dana Jacobsohn, senior vice president of mixed-use development at Marriott, told the Business Journal. She said that the brand loyalty its hotel customers have developed over the years transfers to the residences side of the business.
“It”™s really two different business models. One is your home and the other is a hotel room where you travel. People are nervous about travel not because of our brand, they”™re nervous about travel because of Covid-19,” Jacobsohn said.
“People are attracted to our brands knowing they can get the services, the lifestyle, the security, the safety and the benefits. The brands we offer are helping the sales of these residential projects.”
“My role is in development. I will source branded residential deals globally and help determine what brands are appropriate for those deals. We offer 15 different brands for our residential projects and then I will negotiate those contracts with the owner,” Jacobsohn said.
“At Marriott, it”™s a very important business line that has grown considerably over the last 18 years. We have over 100 branded residences operating globally and 80 more in the pipeline.”
Jacobsohn emphasized that Marriott doesn”™t develop or sell the real estate, but it does make sure that the project will reflect the branding both in what”™s actually built and by handling the management once a project opens.
“We enter into an agreement with the condominium association to manage the property. We will manage all aspects of the property day in and day out, including services, finance and accounting, facilitating the monthly board meeting. We”™re managing all aspects of the day-to-day operation,” Jacobsohn said. She explained that staff members brought to a property have undergone the same training as hotel employees for the particular brand and in some cases have had years of experience at the hotels.
“Vice versa, many of our residential associates eventually work at our hotels as well,” Jacobsohn said. “Everyone goes through a rigorous training process.”
She explained that the St. Regis Residences, Rye, is the first standalone St. Regis project for Marriott as differentiated from their collocated projects, where a hotel also has a residential component within the same site.
Jacobsohn noted that Marriott”™s loyalty and rewards program, Bonvoy, has about 140 million members worldwide and that has helped bring about brand recognition and global residential activity in such far-flung places as Vietnam, the Caribbean, Latin America, Dubai and Portugal.
“We don”™t want a developer to build a project where there is not demand. There”™s a lot of research that is done to make sure the site and the market are appropriate,” Jacobsohn said. “We do due diligence and there are all kinds of reports that we run. We want to make sure that the developer has experience and a good reputation in the market. Don”™t we all want to do business with people who we trust and who deliver what they promise and are a pleasure to work with?”