Can we 'brand' real estate as if it were a car or a beer?

Can we 'brand' real estate as if it were a car or a beer?

by TOM SILVA, Principal, Silva Brand

Remember when people used to major in Advertising?

Today, that word seems quaint – like Mad Men era floral-print dresses and spread collars. In this day and age, the word that has swallowed advertising whole is Branding. But don’t think it’s a fad. Modern brand management has its roots in the 1930s at Proctor & Gamble, but it’s only in the last 20 years that I’ve seen it supplant marketing as the new science of selling.

So what’s the difference?

While marketing pushes a product to market (via the 4 P’s of Product, Price, Promotion & Place), branding is what creates its emotional appeal, its narrative. A brand is what makes you insist on an Apple iPad Air 2 as opposed to the well-reviewed Amazon Fire HDX 8.9; a brand makes you covet an Audi A6 over the highly rated Hyundai Genesis. A brand is a mist of memories, associations and aspirations that corporations spend millions of dollars trying to understand. For corporations, the implications of branding are enormous for this simple reason: A strong brand commands a premium in the marketplace. No wonder, then, that branding is entering the world of the biggest-ticket items.

So enter real estate...  

Still being built, the new Forbes Media Tower in the Philippines will be the first of many around the world.

In 2013, we learned that Forbes, the eponymous business magazine, will put its name on commercial real estate. It has chosen the Philippines as the site for the world’s first Forbes-branded, office high-rise in partnership with a local developer. The 646,000-sf Forbes Media Tower will be located in the suburb of Manila, and is expected to be part of a network of Forbes Media Towers around the world.

It’s a tantalizing concept. While premium Class A buildings are sometimes branded under their anchor tenant’s name (like the Time Warner Center in New York) or their vanity name (think of the Rookery in Chicago), the vast majority of the nation’s commercial real estate stock is not. It’s viewed as a commodity separable only by practical concerns like location, technology, lease rate, incentives and buildout. But we know that’s changing. In a bid to attract the Millennial – highly educated workers that successful companies seek – we are integrating lifestyle elements like rooftop gardens, hangout spaces, restaurants and brand-name cafes into office space. Traditional office configurations, which are by some accounts only occupied 48 percent of the time, now must give way to shared “cool spaces.” 

Branding sprawl?

It’s even happening in the most unbrandable of commercial spaces – suburban office campuses. The most interesting deal in Chicago to watch moving forward may be the fate of the former 1.1-msf Motorola Mobility campus in north suburban Libertyville. Remember when they departed the park for their ultra-cool new Gensler-designed home atop the Merchandise Mart in downtown Chicago?

Well now, Rockville MD-based BECO Management has purchased the campus for $9.5 million in July 2014. Engaging the same leasing team responsible for the lease-up of Kemper Lakes Business Center in Long Grove, BECO Management plans to re-brand the development as Innovation Park Midwest. The new brand will promise a seamless, transit-oriented urban/suburban environment. In some ways, the concept reminds me of places I’ve visited abroad like HITEC City in Hyderabad, India, where my enduring memory is of driving the campus at 3 a.m. on my way to the airport and seeing a sea of young millennial workers milling around resplendent, glass-curtained buildings and trendy cafes, appointed in designer colors. BECO’s move is a perfect example of developers branding master-planned developments as high-density urban/suburban environments. They completed a similar office park at the former IBM campus in Charlotte, N.C. 

The transformed Innovation Park on a 200-acre campus in Charlotte NC is just part of Beco's broad branding aims.

The next logical step would be to brand the work experience as something replicable across all buildings that carry that signature no matter where they are. Clearly, it is an idea worth exploring: The Forbes brand has equity—a 100-year-old company that is associated with hard news on “business, investing, technology, entrepreneurship, leadership and affluent lifestyles.”

According to Omniture, forbes.com reaches 47 million unique visitors monthly, while its magazines Forbes, Forbes Asia, and Forbes Europe attract a global audience of more than 5 million readers. It would appear to be the ideal brand to extend into the realm of premium office space. Plus, the concept of the branded tower has its precedents (albeit mostly in residential real estate)—most famously with the Trump organization, which has licensed its brand across a vast portfolio of real estate. One report has the value of the Trump brand alone at $3 billion.

Tricky business

But branding is tricky. It resides in the minds of consumers, so its value is hard to estimate objectively, or to predict. We need to remember that brands live within a constellation of affiliations, so it makes sense when Cigar Afficonado does a feature on the Jaguar XK or craft beers because they share the same target markets.

It will be interesting to see how this plays out in real estate. What type of tenant will work best within the Forbes-brand constellation? Financial services, legal and consulting firms would seem to be a given, but will startup tenants or fashion companies find the brand too institutional? A sub-brand strategy could potentially be the best solution (this is where companies market to a new audience under a brand extension like Marriott Courtyard or Pepsi One). If one were advising the Forbes account, an effective sub-brand strategy might be to roll out a series of more unusual spaces concurrently with the Media Towers (like a series of converted warehouses or printing plants) with a new moniker to attract incubator tenants; you could call it the “Forbes Hanger” or “Forbes Cooler” so it retains the institutional authority of Forbes, but adds its own patina of Millennial vigor.

In the end, the Forbes strategy is an interesting one and a natural extension of the branded environments to which we’ve become accustomed in the retail and hospitality industries. Whether it’s the marbleized, no-hassle restraint of Nordstrom or the design-conscious, eccentricity of Target, our behavior is subtly altered by environmental branding because they promote very deliberate community scripts. We feel and act different in these spaces by virtue of the brand and its purpose. Forbes is a pioneer in trying to do this within office space. It will be an interesting test case.

The author is founder of Silva Brand, a Chicago-based brand consultancy and marketing agency. A business strategist and creative director for two decades, his work has been recognized by the International Academy of Digital Arts and Sciences, the International Academy of the Visual Arts and the Web Marketing Association. He was previously Senior VP of Marketing & Strategy for The Alter Group, a leading commercial real estate developer, and Communications Director for PM Realty Group, an international property manager. E-mail: tom@silvabrand.com