When people talk about real estate investment they often discuss things like the basis, deal capitalization, and asset management. However, a major aspect of value creation is about conceptualizing a space that fits the evolving needs of the target end user and culture of an area. In office properties, that means creating a space that will allow a company to run and grow its business, in residential properties it means creating a space that tenants want to live in that enhances their lifestyle.
Over the past few years I’ve seen the emergence of a new asset type designed for communities of artists and entrepreneurs to work, learn, network, create, and thrive. These spaces cater to the creative communities and combine co-working space, pop-up retail, studios, and areas for learning and networking.
One such property that I’m really excited about is being developed in my hometown. The Transfer Station opened a few months ago on Main Street in Manayunk (Philadelphia). The project includes co-working space, co-retail (from a single shelf to your own gallery), classes, and collaborative event spaces.
I spoke with brothers Simon and Adam Rogers, the visionaries behind the project.
What was your inspiration for the Transfer Station?
Initially, the idea was born as Adam and I discussed a mutual desire to build a facility that our small businesses could share and allow us to leverage our respective resources to build something ultimately greater than the sum of its parts. That grew and modified as we met more small business owners (through our own businesses) who share our desire to work together and build a community that could help elevate our businesses through shared resources. As we became more involved in the Manayunk community, we found a great need to help “the little guys” (budding entrepreneurs and people with passion alike) get back down to Main Street and find new ways to connect with their clients and share their stories with the community.
You’ve looked toward the community for feedback – how has their input impacted the development?
Adam and I love the design and development process – so much that we’ve gone through about a dozen versions of the building. The community feedback has been critical in refining the designs to accommodate not just what WE want, but what the community would actually use. For example, we’ve learned there’s a stronger desire for smaller private offices than for larger shared workspaces, and a clear preference for black-box theater space over makerspaces.
You’ve decided to crowdfund a portion of the equity which seems like a perfect fundraising tool for this type of project. What benefits will investors receive beyond a piece of the cash flow?
This is a tough question to answer as there’s a lot of complexity in the legalities of crowdsourcing real estate projects (specifically mixing accredited and non-accredited investors). All I can say right now is that beyond the financial return, we’re working on a series of “thank you” options that investors can opt-into to give them what we call “emotional equity” in the development project. We want our investors to be able to walk into the finished facility and see and feel and know that they made it happen. More to come on that front.
What market dynamics are at play that make Manayunk the right location for this project?
Manayunk is an incredible district. It has so many unique elements (positioning between downtown Philadelphia and the suburbs, historic components, interesting architectural mix, the legendary canal, etc.) but the feature that has us drooling is the forthcoming Manayunk Bridge Project (think of it like our own version of NYC’s High Line) which will cross directly over our future facility. If we’re able to link our facility with the bridge, making The Transfer Station the primary entry/exit point from the park to Main Street, we’ll open Main Street up to an entirely new demographic!
If you won the power ball jackpot had had unlimited capital to work with, what would your next project be?
Adam and I would most likely give different answers, so I can only speak for myself here. My dream project is to build a high-end multimedia production facility that can use its unlimited capital donate uncompromising media resources (content) to non-profits, artists, and other inspiring businesses that are often unable to attain the quality they need to be competitive in the global media marketplace.
To me, the Transfer Station is far more than a real estate project or an operating business, it’s a community that inspires artists, entrepreneurs, innovators, and collaborators to bring their ideas to life. However, while the Transfer Station is sure to be a transformative project, it isn’t without challenges. One of the early models of this concept, 3rd Ward with locations in Brooklyn and Philadelphia, abruptly closed its doors after years of operations.
The success of the project hinges on its ability to attract and retain members, create a vibrant and collaborative community, and gain the attention of the neighborhood.
What do you think of this model?