Your Apartment’s Name Matters More Than You Think
The name Lakeside correlates to a high asset value but that doesn’t mean changing the name of an apartment building to Lakeside will create more value.
TEL AVIV, ISRAEL—Skyline AI is a startup based in Tel Aviv, Israel, that uses artificial intelligence to formulate strategies, source deals and underwrite assets on behalf of its commercial real estate partners, some of which are the largest real estate companies in the world.
One puzzle on which it has been working is the question of how — or whether — an apartment’s name can influence its value. To some extent this would seem to be an obvious exercise. An apartment named Paradise View, for example, is bound to be more attractive to tenants and investors than, say, Highway Courtyards. But as it turns out, it is a bit more complicated than that.
CTO Or Hiltch says the firm has built a model that has learned the correlation between name and value. The hitch? Correlation doesn’t equal causation. So, while the name Lakeside correlates to a high asset value, that doesn’t mean changing the name of an apartment building to Lakeside will create more value for the building. It could be just that more valuable assets are located near lakes, Hiltch tells GlobeSt.com. Also, “the correlation doesn’t have to have the same impact for all assets, he adds. “The change may be big or small depending on the assets.”
More digging could produce the answer as to why, for instance, Kalorama performs better than The Residences. Perhaps Skyline AI may do that on behalf of a client. For now, Hiltch’s best advice for investors looking to rebrand an asset is to avoid the ones that correlate with lower values.
