New York City took center stage in an afternoon panel discussion on “Curating Places and Creating Value.” To kick things off, Rodolfe el-Khoury, dean of the UM School of Architecture, introduced Avra Jain, founder, The Vagabond Group in Miami, who moderated the session.
Panelist Paul Darrah, director of real estate Google, focused on the tech giant’s real estate strategy, design and development in New York as it grows its presence in Manhattan. “For us, New York is a key hub and we are building a community here,” said Darrah. Google now has four properties on Manhattan’s West Side, including the current redevelopment of Pier 57 on the Hudson River.
Michael Phillips, principal and president, Jamestown, L.P., is a driving force behind several nationally recognized adaptive reuse developments, including Chelsea Market in New York, Industry City in Brooklyn, and Ponce City Market in Atlanta.
Phillips has worked with Google for many years, creating appealing workplace environments for “Googlers” and surrounding neighborhoods.
“We were the investment group when Google first brought people here from San Francisco,” he said. “Since then, we’ve been involved in several major expansions.”
Darrah complimented Phillips for his placemaking ability. “We wanted Jamestown to curate the market, creating a vibrant place to work with different kinds of experiences,” he said.
Finding redevelopment opportunities
Referring to Jamestown’s successful redevelopment projects, Jain asked Phillips, “How do you find these places?”
Looking back over the company’s 37-year history, Phillips said sometimes the search involves careful analysis of micro and macro dynamics. But in other cases, it’s a matter of instinct, based on that long-term experience. “We weren’t the first real estate firm to see the potential in [Manhattan’s] Chelsea neighborhood,” he said. “But we had a vision about what the area could be.”
Digging a little deeper, Phillips said he and his partners try to get a sense of what the real estate feels like and what would appeal to a person who inhabits the building. “One of our partners is a runner who likes to go out in different cities,” he added. “He will come back and say check out this building. That’s how we often stumble across these opportunities.”
Jain then asked Phillips how he gets investment firms and funds interested in Jamestown’s projects. “Many of these don’t fit into a certain category, we wind up buying them ourselves,” he said. “We have a fairly clear mandate to invest, and having a company with just three partners makes the process of identifying, researching and acquiring a property more efficient. The most interesting thing for our team is finding a white elephant and turning it around.”
Focusing on community
Jain then turned the conversation to Darrah, and asked about his background in architecture. “I think an architectural education is a great foundation for real estate,” he said. “It promotes an understanding of the nature of an asset, the value of place and the financial component. About 80 percent of my day is spent on architectural-related issues.”
Next, Jain asked about how Google is building a community for its New York employees. “We started with about 20,000 square feet, and while we have grown dramatically, we are still in disparate occupancies,” he said. “We now have 7,000 people in New York and are planning to double our workforce in the next five years.” For Google, New York’s key advantages include a diverse talent pool, including technology and finance professionals, as well as a strong public transportation infrastructure that supports commuting.
Google now has four properties on Manhattan’s west side, including Pier 57, which is part of the Hudson River Trust. “We are taking the balance of this full-city block building, which will give us a massive presence here,” Darrah said. Along with offices and amenities, Google is creating 24,000 square feet of community engagement and education space, and 8,000 square feet of event space for its clients.
“Our goal is to anticipate what our community needs, not just be a tenant in a building,” said Darrah. That might mean supporting nearby restaurants and food delivery services for hard-working employees. Other amenities might include child care for both employees and the community.
Most importantly, Google is encouraging an active, collaborative workplace environment. “We value people being in the office, but know that you might not be at a desk when you have a moment of brilliance,” Darrah said. “So, we have a flex work policy, but not a work-at-home policy.”
Creating successful projects
Next, Jain asked Phillips how Jamestown turns a new acquisition into a successful adoptive reuse project.
“We have architects, food and beverage professionals and creative marketing people inside Jamestown,” he responded. “We also get out into the market and pay attention to current trends. That means eating at a lot of restaurants and talking with retail and office professionals about what they are seeing.”
Phillips added that Jamestown’s goal is to be the best possible partner for its tenants. That might mean helping an entrepreneur open a new vegan restaurant to expand the range of offerings in the community. “Our business is all about customer service,” he added.
But these types of large-scale projects can be extremely challenging, added Phillips, pointing to Ponce City Market in Atlanta. Jamestown purchased the historic 2 million-square-foot mixed-use property after another developer stepped away in 2008. “We planned to do a mix of retail, residential and office in our first phase,” he said. “But the office took off right away, so we adjusted our strategy along the way. We spent a lot of sleepless nights and long days trying to figure things out on a sketchpad.”
Ultimately, the redevelopment of Ponce City Market came in $100 million over budget, but now has a strong balance sheet and has been “immensely successful” in creating a sense of community, Phillips said.
What’s next?
When Jain asked what’s next for Jamestown, Phillips said the company likes to invest where there is a strong workforce and people want to spend time. “That speaks well of Miami, which has a nice culture,” he said.
Phillips added that Jamestown, like other investors, is playing careful attention to the evolution of retail space. “We have seen digital retailers coming out with big-store mandates,” he added. “I believe companies that migrate to an omnichannel retail experience [both online and brick-and-mortar stores] will thrive, while others will not. We also like retail as part of a true mixed-use environment.”
Finally, Jain asked the panelists for any advice they might have for today’s UM students. “I think having a dual degree in business and architecture is genius,” said Phillips. “Being able to connect architectural design with constructability is what our business is all about.”
Darrah encourage students to broaden their knowledge and see what ignites their passion. “Be brave and present your ideas,” he said. “The real estate world is changing and you can be right on the leading edge.”
