1) Luxury Branded Residences are Taking Over

We all know people love status and brand names and will pay a premium for them. Over the past few years, branded residences from some of your favorite luxury brands, like Porsche and Armani, have been popping up all over the world.

Even the new Miami resident and soccer legend Lionel Messi now owns a Porsche condo in Miami, complete with a private car elevator.

Here are some other examples of notable brands that have created branded residences:

• Fendi - Fendi Private Residences in Scottsdale, AZ

• Bulgari - Bulgari Resort and Residences in Dubai 

• Lamborghini - Tierra Viva in Spain

• Bentley - Bentley Residences in Miami

• Nobu - Nobu Residences Los Cabos

• Equinox - Equinox Residences in Miami Beach

These brands have spent millions (or even billions) of dollars building trust with consumers. It only makes sense that they leverage their brands into lifestyle and residences.

At the end of the day, it’s all about the bottom line. A Savills report showed that branded residences commanded a 31% price premium on average! The caveat is this is highly dependent on matching the right brand in the right market. Taco Bell did pull off a pop-up hotel, but I wouldn’t hold your breath for a Casa Taco Bell development.

Key Insight→

Consumers will pay a premium for names they know and trust. This is true across many markets and real estate is no different. For the right brand names, paired with experienced development teams in the right markets, developing real estate seems like a natural brand extension and opportunity for growth.

2) CBRE is Using AI to Manage 1B SF of Client Space

While Chat GPT and AI have been the big buzz words over the past year, real estate firms have been using their large data sets to test and implement AI solutions.

CBRE has recently stated that they are using their tool, Smart FM, to manage more than 1 billion SF of client facility space. They say their AI facility management tool has shown to “reduce both maintenance costs and energy consumption by as much as 20% and reduce technician dispatches by an average of 25%.”

Here are some examples of how other commercial real estate companies are using AI:

• JLL: JLL GPT, internal generative AI tool for JLL consultants to deliver research and insights to clients

• Colliers: CoGence, AI enabled real time remote monitoring and construction quality reporting

• Cushman & Wakefield: Pupil, AI building mapping to create digital measurements and floor plans

While these firms are all leveraging AI, the use cases are varied and span multiple segments. It’s easy to envision a world with AI not only augmenting work and eliminating manual tasks, but providing insights on everything from investment decisions to operational improvements.

Key Insight →

Proprietary real estate data is being leveraged to create AI tools and solutions across multiple business segments. While the power of AI can be seen in consumer tools like Chat GPT, companies with massive proprietary data sets can now leverage these insights for internal and client use, to make better investment and operational decisions.

3) How Prologis is Innovating in the Industrial Space

The rise of e-commerce fueled the growth of industrial warehouse space, and Prologis has capitalized in a massive way.

Prologis owns over 1B SF of industrial warehouse and they have purchased more than $3B of space in Q2 2022 when many investors are sitting on the sidelines.

While industrial growth is likely to slow, Prologis has plans to become more profitable in 2024 and beyond.

Here’s how Prologis is planning to continue their growth:

• Sign and renew leases at higher rates - average rents across the portfolio are substantially below market

• Continue to invest in on-site solar - Prologis not only reduces demand for traditional energy, but they can create additional revenue by selling electricity back to the grid

• Invest in EV charging infrastructure to become a hub for net zero EV trucking

• Invest in AI and mobile robots to improve site selection, logistics, and warehouse efficiency

Key Insight →

Innovation is essential during market slowdowns. Prologis rode the wave of industrial warehouse growth over the past 10 years. It’s easy to make money when market growth is on your side. Now that the market is slowing, leadership at Prologis has plans to invest to continue growing and increasing profitability for the company.