Topic: What is the marketing theory that would explain why every asset has a unique name and brand?

What is the marketing theory or background in multifamily that would explain why every asset has a unique name and brand? Is there a reason why this is just accepted as common practice?

I can’t think of many examples in other industries where every location takes on a totally new brand, so I’m trying to understand what drives this trend in our industry.

I ask because it sure feels like we put a lot of extra work on ourselves to build unique brands from scratch, when we could get further faster by building off the success of sister properties. Yet only a small handful of multifamily operators are working to build a recognizable portfolio brand like this.

Is it because the industry has traditionally been so fragmented? Is it ownership ego? Are there marketing studies from years ago that found residents all want to feel unique? Is it just the way it’s always been done?

Educate me.

I feel like current student housing operators are making tremendous strides in changing this practice nationally (The Standard, The Hub, The Retreat, University Village, Liv+, etc)... at least until the asset sells.

Craig Great point. The interesting thing about that is there typically isn’t the regional concentration – there’s one The Standard or University Village in a bunch of completely different markets. Thanks!

Mike Whaling give me a little time to research. I feel like I can find regional examples for you. But for the norm, you’re absolutely correct!

One reason is when builders build a property, lease it up and sell it - they are selling the property not only the brick and mortar, but with its own distinct brand. (Website, social media, monument sign, etc.) Working for a development company, there is lots of discussion surrounding this reasoning.

Tony I see that, for sure.

But I would also argue that, in an acquisition, there’s very little real value placed in the marketing assets. Most new owners bring in their own partners – “our preferred manager is a Yardi shop, so we’ll just replace this website with a RentCafe template.” Happens all the time.

I definitely see the thought process from the developer. I just think that there’s a missed opportunity to apply some pre-existing brand equity from previous successful projects. What if you could get rents that were 3% higher simply because of the name on the door? That happens every day in hotels, but it’s not really a thing in apartments.

Appreciate the insights!

I do feel that most assets do not remain with the same ownership group that bought and created them. That makes it hard for them to stay under the same brand if they are bought and sold around. I think by making them their own standalone brand, you make them buyer agnostic.

Ownership group are rarely the same so they might want those differences as well.

Bill Businesspeople buy restaurant franchises and hotel buildings all the time. I know I’m going to have an easier time getting my name out there if I’m running a Chick-Fil-A or Dunkin’ Donuts vs. trying to build a brand from scratch.
I see the “build to sell” mentality, but I think we put a lot of extra work (and extra costs) on ourselves in the meantime, just so some future buyer doesn’t haven’t to change the sign out front.

This is beginning to be a really awesome conversation. Are you suggesting that the name of all the apartment complexes from a single PM company be the same? I do think it creates problems when communities are bought and sold or the firm changes what property management company manages it. You're then going to have to rebrand completely to match the existing PM company. How often is a McDonald's turned into a Chick-fil-A?

That’s for the guy or gal who wants the McDonald’s to worry about.

Build a great brand. Do it so well more people want to be a part of it. Then build on that success by finding the next location where more customer can be a part of *the brand you already built.*

Even competing car dealers pool their money together – it’s way easy to say “Visit your local central Ohio Honda dealer” than the alternative. They know it’s a more cost-effective way to reach more people across the entire region.

Apartments, especially class A and B properties trade like bonds or baseball cards. Talked to a vendor fellow the other day, he said that the average lifetime expectancy for a client property in this group is only 3 years.....because of trading.

I love this aspect of the conversation! But I don't think it's realistic for a brand name to follow a property when it changes ownership/management. Say a company spends the appropriate budget (not insignificant) and resource branding a universal property name; the property sells, the previous owner or management company will not want that name to transfer with the property. After all, this isn't a franchise as in the McDonald's example, there are no rules governing how that asset is managed going forward; they won't want to take that risk with the brand. The closest I've seen to this is really the Camden brand, where each property is dubbed "Camden XXX." But I don't believe that name follows the property when sold.

There's a MF group in the Pittsburgh area that actually does this. They're name is Walnut Capital and they call all their properties Walnut Xxxx. Seems logical toe, but they buy-and-hold.

Because the first failed apartment developers opened a sign making shop to recover their losses. With each new property was a new design fee.

My two cents is that local developers and bankers in an effort to raise capital, it was easier to sell a local or unique project experience to local investors.

Sometimes we have vastly different properties under the same parent- so I might have A+ property and a C property with the same branding. I worked for a company back in the day when they did "Brand Name at ..." for every property in our city and everything was very uniform, and branded alike. People often came to the wrong property on accident, and when someone was murdered on one of the properties, there was a blow to all of them. When you think about "building off of the success" you also have to take any blows together, and with some properties having more trouble than others, you may want to segment those brands.

Donje 100% agree with this. But that’s also why Hilton has over a dozen brands. GM has 6 or 7. The audience for a Buick sedan is very different than the audience for a GMC truck; the person staying at the Waldorf is probably a different customer than the one staying at the Doubletree. What you’re describing is exactly the route I think multifamily would need to take.

We were going to do consistent brand a few years back...and found studies that showed that corporate advertising was least trusted of any media. So we decided to keep individual names and try our best to build community at each property because the residents (we also did focus groups) said that they felt tied to the neighborhood, the office and maintenance teams, not to our company. They didn't care about our company, with a caveat....they had a loyalty to the people who worked for us in the office and to our maintenance teams.

Steve Good stuff ... I love hearing how in-depth your team gets with the customer research and feedback!

Great thought provoker, Mike. Your hotel analogy is spot on, but the business structural dynamics are significantly different, as are our interactions with the consumer.

Steve's research is interesting, and there's possibly another factor. Consumers regularly use hotel properties in multiple markets, so it makes sense to build a consistent brand. Renter's switch properties much less frequently, and if they're staying in the same market, they might be moving to get away from their prior brand experience.

Build-to-sell developers often need to get through lease up before selling, so they need to create all the marketing elements for the property. If developers want to market their brand along with the properties, they need to develop a franchise model similar to hotel so they control the consumer (renter) brand experience in exchange for a licensing fee. I on't think there is an established brand that an institutional buyer would want to pay to maintain (we can do it better ourselves).

There is value to property management companies in building a brand, but I think they'll have a hard time selling that to owners, especially at a premium. And given the frequency that many properties change management companies, properties would always be re-branding.

Where I think multifamily branding would be easiest to accomplish is in companies with a long-term hold strategy with internal management, with properties in multiple markets. Here a company could build and control the brand experience over time, and take advantage of situations where renters are moving and looking to continue their positive experience from their previous "home".

Terry I think it’s interesting that most owners and investors want to avoid uncertainty, yet somehow in the case of branding, it’s more of a “sure thing” to start fresh. I would think it would be a way safer investment to buy into an established brand that consumers already know and like.

You have a great point Mike, especially re: the cost of branding, but even hotels have to differentiate themselves: Holiday Inn University Executive Park vs Holiday Inn Airport. Years ago when I was marketing director for First Property (and before internet marketing, YES, there was such a time!) we talked about this and Sam Z didn't want to broadcast the name of our company for fear that people would learn how big we were, with deep pockets and be more likely to sue us.

If the asset sells, very typical in student housing, and you have multiple assets with the same name-you have diluted your brand. We tried it once with SH with locations in several states. Never did it again after those sold off.

I definitely think it’s harder to build that value and brand equity across multiple states, especially in student housing. Thanks, Bethany!

It is still essentially a local business, and the brand value typically would come into play if someone was changing markets and rented from the same company. Archstone had some success with this, as does Camden and Village Green and Holtzman's succession company City Club brand. At Oxford in the1980's we had 5 different brands (Reflections, Hunters Chase, Runaway Bay, Hunt Club and one other), and we tried a national brand campaign "Expect the Best" with limited success.

I can say I have worked for both - one that branded as a whole. It was a nightmare. If you have one bad seed, it can ruin the whole brand.

Leah I’d love to better understand what you’ve seen, because our experience has been the exact opposite.

Unbranded SEO is significantly stronger when you can approach content and present multiple options at a broader regional level, rather than trying to get each individual property website ranking individually.

Mike, I actually sat and dwelled on this a little after I said it. I’m now 50/50 on it. While I can see great SEO from a national standpoint and having a single website BUT no one really ever looks through those corporate websites. They want immediate satisfaction from seeing the area they are looking for. Also, you have to pinpoint your targeting on your wasting a lot of PPC dollars for regions you aren’t in. So, I can see it both ways. I have great SEO for our corporate website but no one goes there to find an apartment - they go there to hire us.

Leah We should talk. Your corporate site is the most underrated SEO tool in your toolbox ... but to your point, it has to be built to deliver the shopping experience people have come to expect.

Most people search by location first, but they don’t know the exact building they want to end up in when they start looking. That’s where a good corporate site will beat individual property sites all day long.

I'm with Dennis Smillie on Local. But taking that a step further, few companies have the geographic bandwidth to be the "Kleenex" of multifamily. Post Properties was the first I remember doing it successfully, but at best it was regional. As Donje Putnam pointed out, most of us manage portfolios in which the products, locations, ages, etc., are very diverse. But even properties built by the same developer are a "different product" when located on a different street corner and in a different town. It's a lot more marketing "brain damage," but I think it's important to brand each multifamily asset as its own brand. And "not because we always have!"

Mike, why do you always ask such hard questions?

Obviously lots of factors at play here, but two major factors that I see, neither of which are easy to quantify:

1) the desire to build a brand that is a reflection of the city, its people, or even the history of that exact site. Just picture townhall meetings where local residents are fighting against development -- I can imagine it's easier to get them on board if you aren't trying to bring your own brand into town, but are trying to help preserve a piece of history that they care about. One example that comes to mind is Glasshouse in Pittsburgh, built on the site of an old glass factory. The glass industry is woven into the city's history, thus it's woven into the stories of many families in that area. The property feels very "Pittsburgh," something that would likely have to take a backseat if the brand was primarily concerned with maintaining a national brand. www.glasshouseapts.com/our-story/

2) consider a coffee analogy (most things in my life are coffee analogies): some people go to Starbuck's wherever they are because they know what it will smell like when they walk in, they know the menu, etc. It's all about convenience and brand loyalty. Others will want to experience something more local, e.g. Yelpers looking for the best hole-in-the-wall coffee shop that epitomizes that city's vibe. They're chasing that feeling of being "a local". Renters can take similar approaches: they can prioritize convenience and brand loyalty; or they can prioritize finding something unique that will make them feel like someone who has lived there for years.

Definitely justification for both sides, and also plenty of renters who are looking for both experiences.

The marketing theory of naming all properties the same is to create a similar brand experience with customers. This seems like a great idea and it is if you are talking about fast food, or retail etc. But this approach has to mesh with your customers' "buying" habits and this is where the reason to do this in multifamily comes into question.

So the real question is, "How many residents that move from one Company A's branded community to another town/location and will be so influenced by the brand experience that they want to rent in a similarly branded community by the same Company A?"

I've never seen any hard numbers but few management companies have this much coverage to be able to benefit from this scenario. The numbers go up if you think in terms of resident referrals to a friend in other markets instead of capturing the same resident, but that's also not supported by any deep studies.
The real answer as to why a multifamily company should brand similarly across their portfolio is banks and investors might like it. Owners like it.

Do the residents like it/ prefer it / respond to it? Not in and of itself, because again, it doesn't mesh with the consumer experience for the previously listed reasons. However, if you happen to have a really good branded approach that is truly resonating well with your target audience and it also has some flexibility to adapt to local differentiating circumstances, then that can work. Few pull that off.
The thing I always think about when it comes to branding an apartment community is that they are always in a unique market/competitive mix/ situation and if you want to get the most out of your marketing, I would suggest making that branding customized to compete where the apartment community is positioned. (And this is mostly for A level communities of size.)

I mean, if you have an apartment community that's worth 25-50 million dollars on paper, you owe it to the investment itself to do things the right way and not the easy way.

For my portfolio we manage for investors. Everything is for sale always lol. We buy and sell multiple times so the cost of rebranding for each purchase would be extensive. We also have different classes of properties. While everything is under our corporate umbrella each property has a different name

The largest player in the space represents less than 2% of TAM. Add to that a goal of selling new development combined with so many properties under fee management. This is not the hotel industry which makes branding difficult if not impossible.

Identity. A community is specifically unique to the needs/wants/desires of its demographic. It loses its special value if they are all cookie cutter and the called same name. We are people, not items to be stored in a U-Haul storage facility. We want to feel defined.

I was part of the team responsible for building key sub-brands off of our parent brand at Avalon Bay. I was in charge of Consumer and Resident research at the time when we determined there was significant value for building a group of brands based on the segments of consumers we were serving or were targeting to serve. Originally Avalon pushed itself as a luxury brand, but we understood that that market was finite for that space and many younger renters, as well as commodity-focused renters, either felt that luxury was not affordable, or identifiable to them. Ava and Eaves were born from this approach - Sub-brands that have shown great success in the markets they serve. We fell on a signatory brand approach (an Avalon property).

There was a lot of discussion about individual property identity, and I have that discussion with many of my clients today. The research was not there to support the individual property identity brand approach... The primary reason that many choose to stick with the individual brand is that prospects and residents refer to the name of the community they live in or are seeking out to rent (for prospects). That's fine if you have a single property, but depresses the overall value of the portfolio if you want to extend resident Lifetime value beyond a single rental event.

Our research consistently shows that if residents have a good or bad experience, and they are looking to rent at a different location, they rely on the brand to guide their decision. Look at your prospect data and you will find, especially in urban environments, that most of your prospects come from within 3 to 5-miles of your current property. The majority of renters (especially those who have a good experience) tell us that they look for the brand first as part of their search. Why? Great brands provide consistency of experience and take some of the guesswork out of making a choice. Why wouldn't I want to live in a community where my experience was excellent?

The other educational opportunity I have with clients is about what a brand means. Most think of large brands, Apple, Nordstroms, etc. when they think of brands and say they do not have the budget to build a brand. That is an excuse. Building a Big-B brand to scale is costly, but building a Little-B brand in the local markets you serve is not. We forget that there are renters who will be in the market for a while, and you need to be competitive in the markets you serve - Branding is the advantage if you are committed to providing the type of experience your targets markets want.