Does A Condo Building's Brand Affect Its Value?

Branding is a huge part of marketing, even for real estate.

I recently bought a new car. Correction, I recently had to buy a new car. My trusty 2010 Mazda3 finally died on me and after much dismay, I realized that being a very busy real estate agent in Toronto without a car is next to impossible, as much as I tried to convince myself it was possible. I loved that car. It did the job, looked decent, was fun to drive, and was super reliable. That's all I really cared about. So when it came time for a new car, I didn't look anywhere else. I went with the brand and model that I trusted and bought myself another Mazda3. I really appreciated that I knew what I was getting, loved the product, and the price was right. And I must admit, I think it looks pretty good! Even my 3-year old nephew thinks so ("Wow, that's a cool car!" His exact words the first time he saw me drive up in it :)

This got me to thinking about branding in real estate. Yes, every developer has a reputation in the industry for delivering good, bad, or great products. But what really got me thinking was the individual branding that each specific building went through during the initial preconstruction marketing phase, regardless of the developer, and how those brands have grown into some sort of perception or reaction when you say "I live at such-and-such building". As a long-time downtown condo dweller, I can tell you that most people refer to the building where they live by name, not address. Why? Because the brand means more than the address.

I'm going to throw a few building names out there and if you've ever been active in the downtown condo market, a lot of these will probably give you an immediate impression on location, value, style, quality, appeal, or something else that might have you saying to yourself "yeah, I love that building". Then ask yourself, why?

- The Berczy

- Aqualuna

- Spire

- The Well

- The Prince Arthur

- Waterworks

- Thornwood

- London on The Esplanade

- Theatre Park

With only just a name, you often still get an immediate reaction. Fantastic building. Great location. Luxurious. Fancy. Perhaps expensive? Note - I purposely avoided the usual "branded residences", like the Four Seasons and Shangri-la, because those are built off global recognition. That's a little unfair in my opinion in the context of Toronto-specific condos.

Why do we get a reaction to a name? Because every building in the city, not just the ones above, have developed both a brand name and a reputation over the years. Why do people absolutely love The Berczy? Boutique, mid-rise, luxury. I hear it all the time, even from folks who have never set foot inside. And the market has assigned a value premium to the building accordingly. The Prince Arthur? You probably won't find better service or dedicated staff in another condo building downtown. And the market values that accordingly. The list goes on. Another side note: I obviously won't call out buildings that have a bad reputation, for one reason or another, but if you were curious about the ones that do, shoot me an email and we'll chat :)

Perhaps the title of this post could have been "how does a building's reputation affect its value?". Afterall, brand is nothing more than the combination of perceived value and reputation (wifey would be proud of me for understanding that!) But at the end of the day, the most important thing about branding comes down to whether or not hearing a name elicits a reaction. Good or bad.

So how does the brand of a building affect its value? You've all heard that "location, location, location" is the most important factor in real estate. But when it comes to Toronto condos, that's not quite true. I've said this to almost every buyer client I've worked with - "You can stand on a corner of most streets downtown, and two buildings literally across the street from each other will sell at dramatically different prices". Location matters, but the building's brand and how the value is perceived in the market matters more when determining the price. Much more.

I've sold my fair share of luxury condos over the years. It feels like every developer likes to call their project "luxury", but let's be real - a building with 600 units where the largest is 900 sq ft is hardly a luxury project. But I digress. When I'm listing units in truly luxurious, special buildings, my pitch to the sellers is always the same - "80% of the buyers out there won't understand why this building is so expensive. And that's ok. We're going after the 20% who really get it".

And that's not a knock on people who don't understand why a building is selling at $1100+/sq ft when every other building down the street is selling for $850/sq ft. When I bought my Mazda, I never once considered a BMW. Or a Mercedes. Or even a Lexus. Why? Because truthfully, I don't understand the value proposition. They're beautiful cars, and I can see the appeal, but to me, they're not worth the money. So I'm just not their target buyer. Nothing wrong with that at all. The same goes for real estate. I'll never argue with a buyer about why my latest listing at The Berczy was priced at $1100/sq ft when they ask why it's so expensive. I know how they feel. The same way I feel when I look at the price of a BMW or Mercedes. I'm not the buyer for those cars. And this buyer isn't the buyer for a building like this. Because I'm sure at least part of what you are paying for is the brand, and not everyone is ok with that.

The same goes for real estate. Yes, the finishes in highly regarded buildings are beautiful. Yes, the layouts are great. Yes, they are impeccably maintained and well managed. But I know, deep down, there is "brand equity" that has been built up over the years that has kept the value of certain buildings higher than others. And as much as I will probably never stray from my loyalty to the Mazda3 brand purely because of the value it offers, when it comes to condos and real estate, I would absolutely be willing to pay more for brand name buildings. Every time. Brand has value, for the right buyer.

Have you checked out my previous blog posts?

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Your Toronto condo lover,

Adil Dharssi

Sales Representative

Skybound Realty, Brokerage

Direct: 647-223-1679 (call/text)

Email: Adil@AdilKnowsCondos.com

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