BRONFMAN : We provided loans for small businesses until they could access PPP loans . These loans could also go to a restaurant that needed to redo its kitchen or create outdoor seating . We also set up a tenant portal , so they had a resource to find best practices — like how to apply for loans , how to improve your app , and how to increase to-go offerings , for example .
One of the things that good retail does today is it becomes part of the community . One of my go-to stories is about bookstores — we have bookstores at a few of our projects . These may not be the highestpaying tenants , but if you ’ re going to see your project as a Main and Main , I think you need to have a bookstore . It ’ s all wrapped up together . Whether it ’ s having local tenants or national ones , having a bookstore for the area , offering a tenant portal , setting up loans for tenants — it ’ s all about being part of the community and helping to foster that feeling .
CIRE : SPEAKING OF BEING A STRONG CORPORATE CITIZEN , WHEN IT COMES TO ESG , JAMESTOWN ANNOUNCED IT IS COMMITTING TO NET-ZERO CARBON EMMISSIONS AT LEVI ’ S PLAZA IN SAN FRANCISCO BY 2025 . WHAT DOES ESG MEAN TO YOU ? AND WHAT WAS THE STORY BEHIND MAKING THIS COMMITMENT NOW WITH THIS PARTICULAR PROPERTY ?
BRONFMAN : Sustainability has been a part of our business plan that our asset managers and developers focus on . In other words , it ’ s part of the acquisition plan . When we buy an asset , our team examines if they are making the right decision from a sustainability perspective . Number one , it ’ s simply the right thing to do . Beyond that , I will tell you that I think it ’ s the right thing to do economically and financially as well . It ’ s good for prospective tenants because we think they really embrace and support these initiatives .
We work with a lot of creative and tech companies , and they want to see a building that is focused on sustainability . It ’ s also important to our investors , to current investors in our funds — things like that . Finally , I think it ’ s important from a capital markets perspective . In other words , in 10 years from now , when you go and sell a building , the pool of people who are interested in actually buying from you is going to be broader . You will engage more potential buyers when you have an environmentally responsible story to tell .
CIRE : WHAT ARE SOME OTHER TRENDS ARE YOU SEEING EMERGING FROM THE PANDEMIC , ESPECIALLY SINCE JAMES- TOWN IS IN THE OFFICE AND RETAIL
SECTORS ? WHAT DOES THE FUTURE OF THESE ASSET CLASSES LOOK LIKE IN YOUR OPINION ?
BRONFMAN : That ’ s a great question — and one that everyone is focused on now . First , we still believe in the office environment . I believe that collaboration , mentorship , and spontaneous encounters in the lunchroom are all important things . Work from home worked , particularly at the beginning of the pandemic when , candidly , everyone was super scared and worried about the virus , worried about losing their job , worried about everything really . But as we ’ ve gotten further along , it ’ s become more and more apparent to more companies that getting people back in the office is necessary . The more you see people in the office — when you hit an inflection point , say 50 or 60 percent of people — those who are not in the office will be unintentionally marginalized . We see it at Jamestown . When we have a meeting on Zoom , those two or three people in the office will continue talking at lunch or back
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at their desks . Those not in the office end up marginalized and feel a need to come in the next day .
We think there will be a growing need for office space . I also think densities will decrease . We went from a period about 20 years ago where we were giving 250 square feet per person to 80 or 90 square feet per person before COVID-19 . But that doesn ’ t work when you ’ re worried about germs . It also doesn ’ t work because it was never effective to have eight people in a lunchroom and calling that an office . I think you ’ ll see a reverse in this trend coming out of the pandemic as people think about their future needs . The end result is , yes , there will be some office spaces that are obsolete , but demand will remain .
Whether you ’ re talking about office or retail , you have to create a space that ’ s dynamic and engaging enough to get somebody out of their pajamas . It ’ s easy in 2021 for someone to stay in their pajamas while they shop and , to some degree , work . We want to create engaging environments where people will want to linger longer . A good office or retail environment creates almost a second space for you outside of your home . It ’ s a place where you feel comfortable , where you ’ re around interesting people . You just have to build these spaces with health and safety in mind .
CIRE : WITH THE MIGRATION OF PEOPLE AMID COVID-19 , GIVEN THAT EMPLOYEES CAN WORK REMOTELY , ARE THERE ANY MSAS OF PARTICULAR INTEREST YOU ARE LOOKING AT ? WHAT ARE YOU LOOKING FOR ?
BRONFMAN : It all starts with demographics . I would never invest in markets without good demographics where I think young ,
Matt Bronfman
educated people are moving . Secondly , I ’ m looking for job growth in industries that are tech-focused and creative . Atlanta has a lot of that along with other cities in the Sun Belt .
I also look for supply-constrained markets where it ’ s not easy to put up a new office building or a retail project . I prefer locations that are more predictable , where the zoning is clear . Some markets in the country allow you to put up anything on any street corner and that makes it more difficult to drive rents . New York is a great example of a supply-constrained market . Zoning is very difficult . The neighborhoods are primarily built out , so there aren ’ t a lot of parking lots or empty spaces waiting for development . In the end , it really starts out with strong demographics and solid job growth .
Nicholas Leider
Senior content editor of Commercial Investment Real Estate Contact him at nleider @ ccim . com .
Editor ’ s note :
This article is an adapted excerpt from a fulllength Commercial Investment Real Estate podcast . To listen to the full episode , head to SoundCloud , iTunes , Spotify , or wherever you listen to your favorite podcasts . Don ’ t forget to subscribe , rate , and review .
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